FAST-DS 2026: CBDT Notifies Foreign Assets Disclosure Scheme

The Central Board of Direct Taxes (CBDT) has operationalised the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), providing eligible taxpayers a one-time opportunity to regularise specified undisclosed foreign assets and foreign income. The scheme is effective from 16 August 2026, with declarations to be filed electronically by 31 December 2026.

CBDT Notifies FAST-DS Rules, 2026

The CBDT issued Notification No. 114/2026-Income Tax dated 14 August 2026, notifying the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 under Section 143 of the Finance Act, 2026. The Rules came into force on 16 August 2026.

The scheme was introduced through Chapter IV of the Finance Act, 2026 and is intended to address certain inadvertent or legacy non-disclosures of foreign assets and income by small taxpayers. The CBDT's official FAQs describe it as a one-time opportunity offering specified tax or fee-based settlement along with immunity from further tax, penalty and prosecution for matters covered by a valid declaration.

Who Can Benefit?

The scheme broadly covers eligible persons who are or were residents of India during the relevant period and have specified foreign assets or income that were not appropriately disclosed.

It covers, among other categories:

• Undisclosed foreign income.
• Undisclosed assets located outside India.
• Certain foreign assets acquired while the taxpayer was non-resident but not disclosed after becoming resident.
• Certain foreign assets acquired from income already offered to tax in India but omitted from the relevant foreign-asset disclosure.

The CBDT specifically identifies situations such as undisclosed foreign ESOPs or RSUs, dormant or low-balance overseas bank accounts and certain foreign savings or insurance policies as examples relevant to the scheme.

How Much Is Payable?

The scheme has two principal categories.

1. Undisclosed Foreign Income or Assets up to Rs. 1 Crore

Where the aggregate value of the eligible undisclosed foreign asset and undisclosed foreign income does not exceed Rs. 1 crore, the amount payable effectively works out to 60% of the applicable amount:

• 30% tax; and
• An additional amount equal to 100% of that tax.

The underlying valuation and calculation must follow the prescribed provisions and rules.

2. Specified Foreign Assets up to Rs. 5 Crore

A separate category covers specified foreign assets up to an aggregate value of Rs. 5 crore where the asset was acquired from qualifying income, including certain income earned while the taxpayer was non-resident or income already offered to tax in India.

A fixed fee of Rs. 1 lakh is payable for this category.

Valuation Date and Filing

The prescribed valuation date is 31 March 2026. The Rules provide specific valuation methods for different types of foreign assets, including financial assets, immovable property and other specified assets.

Eligible taxpayers must:

• Prepare the required details and supporting documents.
• Determine the applicable category and amount payable.
• File the declaration electronically in Form 1.
• Follow the subsequent electronic payment and certification process prescribed under the Rules.
• Complete the declaration by 31 December 2026.

Immunity from Further Tax, Penalty and Prosecution

A major feature of FAST-DS is the limited statutory protection available for a valid declaration. Section 139 of the Finance Act, 2026 provides immunity from further tax or penalty and prosecution under the Black Money Act in respect of income or assets covered by a valid declaration, subject to the conditions of the scheme.

The scheme should therefore be evaluated carefully by taxpayers who have received foreign financial information through international exchange mechanisms or who discover historical non-disclosures.

What Should Taxpayers Do Now?

Taxpayers with foreign assets should consider:

• Reviewing historical foreign bank, investment and property records.
• Checking previous income-tax returns and foreign-asset disclosures.
• Reconciling information received through CRS/FATCA or other international exchange mechanisms.
• Determining whether the Rs. 1 crore or Rs. 5 crore threshold and other eligibility conditions are satisfied.
• Calculating the applicable tax or fee before deciding whether to make a declaration.
• Maintaining evidence supporting the source and valuation of the foreign asset.

FAST-DS is a time-bound compliance opportunity, and the eligibility and valuation provisions require careful review before filing.

Conclusion

FAST-DS 2026 gives eligible small taxpayers a structured opportunity to address specified historical foreign-asset and foreign-income disclosure issues. With the scheme now effective from 16 August 2026 and the filing deadline set at 31 December 2026, taxpayers should assess their position well before the deadline.

For expert guidance on this topic, contact your tax professional today.