If you moved back to India after a few years abroad, held RSUs from a US employer, or still have a bank account open in a country you no longer live in, there’s a decent chance something never made it into your Indian tax return. Not because you were hiding anything, just because foreign asset reporting rules are easy to miss when you’re filing your own ITR.
The government has now given such taxpayers a way to fix this. The Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS), 2026, under Chapter IV (sections 130 to 144) of the Finance Act, 2026. It’s a one-time window to declare foreign assets or income you didn’t report earlier, pay a specified amount, and get immunity from further tax, penalty, and prosecution under the Black Money Act, 2015.
Here’s how the scheme works, who it applies to, and what filing under it actually involves.
Quick Summary
- Declaration window: 16th August 2026 to 31st December 2026, filed online
- Valuation date for all assets: 31st March 2026
- Two disclosure categories: undisclosed assets/income up to ₹1 crore (60% total cost), or under-reported assets up to ₹5 crore (flat ₹1 lakh fee)
- Assets above ₹5 crore, or linked to pending PMLA or Black Money Act proceedings, can’t use the scheme
- Filing is a 4-step process: Form 1 (declare) → Form 2 (payment order) → Form 3 (payment proof) → Form 4 (immunity certificate)
What exactly is FAST-DS 2026?
FAST-DS is a voluntary disclosure scheme, not an amnesty for everyone. It lets an eligible taxpayer declare an undisclosed asset located outside India or undisclosed foreign income, on payment of tax or a fee, in exchange for protection from the harsher consequences of the Black Money Act, 2015.
The scheme is fully electronic. Declarations are processed by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), and every step from filing to the final immunity order happens online.
Three dates matter here, and they’re not the same:
| Date | What it means |
|---|---|
| 16 August 2026 | Scheme comes into force, declarations open |
| 31 December 2026 | Last date to file a declaration, no exceptions |
| 31 March 2026 | Valuation date, fair market value of every asset is computed as on this date |
Who can file a declaration
You qualify as an “assessee” under the scheme if either of these applies:
- You were a resident of India (under section 6 of the Income-tax Act, 1961) in the relevant previous year, or
- You’re currently a non-resident or RNOR (resident but not ordinarily resident), but you were resident in India either in the year the undisclosed income relates to, or in the year the foreign asset was acquired.
This second condition matters more than people realise. If you’ve since moved abroad and become an NRI, you’re not locked out of the scheme just because you’re a non-resident today. What matters is your residential status in the year the asset was bought or the income was earned, and you’ll need to state this in Form 1.
Beyond residency, you need a valid reason for declaring. The scheme applies where you:
- never filed a return under section 139 at all, or
- filed a return but left out the asset or income, or
- the asset or income has escaped assessment under section 147
What can be declared: two categories, two very different costs
FAST-DS recognises two distinct situations, and mixing them up is the most common source of confusion.
| Category 1: Undisclosed | Category 2: Under-reported | |
|---|---|---|
| What it covers | Foreign asset or income you have no satisfactory explanation for, or none at all | Foreign asset already taxed in India, or acquired while you were a non-resident, but left out of the foreign asset schedule |
| Value limit | Up to ₹1 crore (asset + income combined) | Up to ₹5 crore |
| What you pay | 30% tax + 30% fee = 60% of value | Flat ₹1 lakh, regardless of asset value |
| Section 133 Table reference | Sl. No. 1 | Sl. No. 2 |
The logic behind the gap in cost is straightforward. Category 2 assets were bought with money that was either already taxed in India or earned while you weren’t an Indian tax resident, so there’s no fresh tax liability, just a compliance gap to fix. Category 1 assets or income have no such clean source, which is why the cost is steep.
If your Category 2 assets add up to more than ₹5 crore, you’re not eligible for the scheme at all, even for the portion within the limit.
Working out what you owe: a Category 1 example
Say you have an undisclosed foreign bank account worth ₹60 lakh and undisclosed foreign income of ₹20 lakh. Here’s how the payment breaks down:
| Item | Value | Tax (30%) | Additional fee (30%) | Total payable |
|---|---|---|---|---|
| Foreign bank account | ₹60 lakh | ₹18 lakh | ₹18 lakh | ₹36 lakh |
| Foreign income | ₹20 lakh | ₹6 lakh | ₹6 lakh | ₹12 lakh |
| Total | ₹80 lakh | ₹24 lakh | ₹24 lakh | ₹48 lakh |
For Category 2, there’s no such calculation to do. Whether your under-reported foreign property is worth ₹50 lakh or ₹4.5 crore, the fee is a flat ₹1 lakh, as long as the total stays under ₹5 crore.
How fair market value is worked out (valuation date: 31 March 2026)
Every asset under FAST-DS is valued as on 31st March 2026, and the general rule is the higher of the cost of acquisition and the open-market price on that date, ideally backed by a valuer’s report from an agency recognised by the government of the country where the asset sits. If no such valuation is done, the indexed cost of acquisition is treated as the fair market value.
A few assets have their own rules worth knowing:
- Foreign bank accounts: value is the sum of all deposits made from the date the account was opened up to 31 March 2026. Deposits that are just re-deposits of an earlier withdrawal from the same account aren’t counted twice, and if the account was already declared once under the Black Money Act’s Chapter VI window, only deposits made after that earlier declaration count.
- Quoted shares: higher of cost of acquisition and the average of the lowest and highest traded price on the valuation date (or the nearest earlier trading date, if there was no trading on 31 March 2026).
- Unquoted shares: higher of cost of acquisition and a value worked out from the company’s book value, adjusted for specified assets and liabilities.
- Immovable property abroad: higher of cost of acquisition and open-market price, backed by a local recognised valuer’s report where available.
One safeguard worth knowing: for assets other than a bank account, if the value you declare turns out to be within 20% of what the Assessing Officer later determines, that gap alone won’t make your declaration invalid.
Filing process: Form 1 to Form 4
Filing under FAST-DS runs through four forms, each triggering the next step in sequence.
| Step | Form | What happens | Timeline |
|---|---|---|---|
| 1 | Form 1 | You file the declaration online with supporting documents and valuation reports | Anytime in the window (16 Aug – 31 Dec 2026) |
| 2 | Form 2 | The income-tax authority issues an order stating the exact amount payable | Within 1 month from end of the month you filed Form 1 |
| 3 | Form 3 | You pay and report proof of payment electronically | Within 2 months from end of the month Form 2 is received |
| 4 | Form 4 | Authority certifies the payment, giving you immunity from prosecution | Within 1 month from end of the month Form 3 is received |
Missed the two-month payment deadline in step 3? You’re not immediately out of the scheme. A further two months is allowed, but with simple interest at 1% per month (or part of a month) of delay. Beyond that four-month outer limit from the date of the Form 2 order, though, the benefit of the scheme is lost for that declaration, no extensions past this point.
You can also declare more than one asset, or a mix of asset types, in a single Form 1. The form and its annexures are built to repeat entries as many times as you need.
What you get once the declaration is valid
Once Form 4 is issued, you get immunity from any further tax, penalty, or prosecution under the Black Money Act, 2015, for the specific income or asset declared. The declared amount also stays out of your total income under both the Income-tax Act, 1961 and the Black Money Act, 2015.
There’s a trade-off though: once declared, you can’t go back and seek rectification, revision, or any relief in appeal proceedings relating to that same income or asset. And if assessment proceedings for that year are already pending when you file, the Assessing Officer has to factor your declaration into the final order, rather than ignoring it.
Where FAST-DS doesn’t apply
Two situations are carved out entirely:
- Income or assets that are proceeds of crime under a pending or initiated Prevention of Money-Laundering Act, 2002 proceeding
- Income or assets for an assessment year where Black Money Act, 2015 proceedings are already completed
If either applies to your situation, this scheme isn’t the route out, and you’d need to look at your options under the existing assessment or appeal process instead.
What this means for you
- If you’ve got a foreign account, RSUs, or property you didn’t report, check whether it falls under ₹1 crore (undisclosed) or ₹5 crore (under-reported already-taxed money), the cost difference between the two is massive
- Get your valuation as on 31 March 2026 sorted early, since Form 1 needs supporting documents and valuer reports upfront
- The window closes 31st December 2026, and there’s no provision to extend it, so this isn’t something to leave for December
Questions on how your specific foreign asset would be categorised? Drop them below.