FAST-DS SCHEME 2026
FAST-DS 2026: A Comprehensive Guide to Disclosure of Undisclosed Foreign Assets and Income
What is FAST-DS 2026?
The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026) is a one-time compliance opportunity introduced by the Government of India to enable eligible taxpayers to disclose certain undisclosed foreign assets and foreign-source income by paying a specified tax or fee and, subject to the prescribed conditions, obtain limited immunity from penalty and prosecution under the Black Money Act.
The scheme is particularly relevant for individuals who may have failed to report foreign assets due to inadvertent or technical non-compliance, such as foreign bank accounts, shares/ESOPs, insurance policies or assets acquired while working or studying abroad.
Why was FAST-DS introduced?
The Government recognized that foreign-asset non-compliance does not always arise from deliberate tax evasion.
There can be genuine situations such as:
An employee receiving foreign ESOPs/RSUs from a multinational employer.
A student who opened a foreign bank account while studying overseas and subsequently returned to India.
A returning NRI having old foreign savings or insurance policies.
A person who worked overseas and acquired assets during the period of non-residence.
A taxpayer who had already offered the underlying income to tax in India but failed to report the foreign asset in the relevant return schedule.
Legacy foreign assets that were unintentionally omitted from ITR disclosures.
The Government's Budget memorandum specifically recognized these types of inadvertent or legacy non-disclosures and the increasing availability of foreign-account information through international information exchange mechanisms.
Who can use FAST-DS 2026?
The scheme is not restricted only to persons who are currently Indian residents.
An eligible person may include someone who:
is currently a resident in India;
was a resident in India during the relevant period;
is currently a Non-Resident (NR) but was resident when the relevant foreign income arose or the foreign asset was acquired; or
is currently an RNOR, where the conditions prescribed by the scheme are satisfied.
The Income Tax Department FAQ expressly recognises that a person who is currently non-resident or not ordinarily resident may also qualify if the relevant income or acquisition occurred during a period when the person was resident in India.
Example
Suppose Mr. A worked in the UK from 2018 to 2022 and accumulated £20,000 in a UK bank account. He subsequently returned to India and became resident.
If the account or relevant foreign asset was required to be disclosed but was not reported, FAST-DS may provide a route to regularise the position, subject to the scheme's eligibility conditions.
Monetary limits under FAST-DS 2026
The scheme broadly contains two important categories.
Category | Eligibility / Situation | Amount payable |
Category 1 | Aggregate value of undisclosed foreign assets + undisclosed foreign income does not exceed ₹1 crore | 30% Tax, plus 30% Additional Income Tax |
Category 2 | Foreign asset value does not exceed ₹5 crore and falls within specified conditions relating to non-resident income or income already taxed in India | one-time fee of ₹1 lakh |
These limits and payment mechanisms are specifically set out in the Budget framework and subsequent scheme material.
What is ₹20 lakh threshold Limit?
Under the Black Money Act, an exemption from the ₹10 lakh penalty for failure to disclose certain foreign assets is available where the aggregate value of all such qualifying foreign assets does not exceed ₹20 lakh, subject to the applicable conditions.
Importantly, the ₹20 lakh limit is an aggregate threshold.
This means that taxpayers cannot consider ₹20 lakh as a separate exemption limit for every individual foreign asset. Instead, the value of all relevant foreign assets covered by the provision must be considered together.
What is the deadline?
FAST-DS 2026 is a time-bound scheme.
The disclosure window is available from 16 August 2026 to 31 December 2026.
The deadline is particularly important because a taxpayer should not wait until the last few days.
Foreign assets often require additional work such as:
obtaining foreign bank statements;
determining historical acquisition cost;
converting foreign currency into INR;
establishing source of funds;
obtaining property valuation;
identifying beneficial ownership;
checking previous ITRs; and
determining residential status for the relevant years
FAST-DS 2026 Forms and filing process
The scheme has a structured multi-form mechanism.
Step 1 – Form 1
The taxpayer makes the declaration electronically through Form 1.
Form 1 contains information relating to:
assessee;
foreign assets/income;
valuation;
applicable amount payable.
The Income Tax Department has made Form 1 available for electronic declaration.
Step 2 – Form 2
After submission of Form 1, the prescribed authority determines the amount payable and issues Form 2.
This provides the taxpayer with the amount required to be paid under the scheme.
Step 3 – Payment
The taxpayer must make the prescribed payment within the time specified under the scheme.
Step 4 – Form 3
After making payment, the taxpayer furnishes the prescribed payment details through Form 3.
Step 5 – Form 4
Upon verification/completion of the process, Form 4 is issued as the final certificate/order confirming the validity of the declaration and payment.
Therefore, taxpayers should retain the complete FAST-DS documentation rather than treating Form 1 filing alone as completion of the scheme.
Who Is Eligible Under FAST-DS 2026?
The following categories are highlighted as eligible, subject to fulfillment of the prescribed conditions:
1. Resident Taxpayers
Resident taxpayers who satisfy the prescribed conditions and have eligible foreign income or foreign assets requiring disclosure may be covered under the scheme.
2. Non-Residents (NR) or RNORs with Earlier Indian Residency
A person who is currently a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR) may also be eligible where:
The person was resident in India when the undisclosed foreign income accrued; or
The foreign asset was acquired during the relevant period when the person was resident in India.
Thus, merely being a non-resident at the time of making the declaration does not necessarily exclude a person from the scheme.
3. Taxpayers With Aggregate Foreign Assets/Income Up to ₹1 Crore
Taxpayers having undisclosed foreign income or foreign assets may qualify where the aggregate value does not exceed ₹1 crore as on 31 March 2026, subject to the applicable conditions.
It is important to understand that this is an aggregate threshold, rather than a separate ₹1 crore limit for every foreign asset.
4. Foreign Assets Acquired From Income Already Taxed in India
The scheme may also cover taxpayers who acquired foreign assets from income that had already been offered to tax in India, but the taxpayer subsequently failed to report the foreign asset in the relevant ITR schedule.
For example, a taxpayer may have used legitimately disclosed and taxed Indian income to acquire foreign shares but failed to report those shares in the foreign-asset schedule of the income-tax return.
5. Foreign Assets Acquired During Non-Resident Status
Taxpayers holding foreign assets acquired during their Non-Resident status may also be covered, subject to the prescribed conditions and the ₹5 crore threshold mentioned in the scheme material.
6. Common Examples of Potentially Covered Taxpayers
Examples mentioned in the material include:
Employees having unreported ESOPs/RSUs
Former students having foreign bank accounts
Returning NRIs having foreign savings or insurance
Persons who were on overseas deputation
These situations should be evaluated carefully to determine whether the taxpayer satisfies all the conditions of FAST-DS 2026.
Who Is Not Eligible or Not covered?
The scheme also specifies situations where a taxpayer or particular case may fall outside its coverage.
1. Persons Not Satisfying Residency and Other Conditions
Persons who do not satisfy the prescribed residency, asset, income or other conditions of FAST-DS 2026 cannot claim the benefits of the scheme.
2. Proceeds of Crime
Cases involving proceeds of crime under the Prevention of Money Laundering Act, 2002 (PMLA) are not covered under the scheme.
This is an important exclusion because the voluntary disclosure mechanism cannot be used to regularise assets that fall within the specified proceeds-of-crime provisions.
3. Aggregate Value Exceeding ₹1 Crore
Where the relevant undisclosed foreign income/assets exceed the prescribed ₹1 crore eligibility threshold, the taxpayer would not qualify under the corresponding category of the scheme.
The aggregate nature of the threshold should be carefully considered while determining eligibility.
4. Certain Foreign Assets Exceeding ₹5 Crore
Foreign assets acquired from disclosed income or during Non-Resident status may be subject to a separate ₹5 crore threshold, as specified in the scheme conditions.
Where the applicable threshold is exceeded, the relevant category may not qualify for FAST-DS 2026.
5. Assessment Proceedings Already Completed
Cases where assessment proceedings under the Black Money Act have already been completed in respect of the relevant income or asset may not be eligible for declaration under the scheme.
6. False or Misleading Declarations
A declaration containing:
False information,
Material misrepresentation, or
Suppression of material facts
can become void, and the normal provisions of applicable law may then apply.
Therefore, taxpayers should ensure that all information furnished in the declaration is complete, accurate and supported by appropriate documentation.
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