CVOCA Gyaan Ganga 41 – Foreign Asset of Small Taxpayer – Disclosure Scheme 2026 (FAST-DS 2026)
This Gyaan Ganga explains the scheme for disclosure of assets or investments held in foreign countries by NRIs, OCIs, Individuals, etc.
Your Window for Fixing Genuine Foreign Income/Asset Omissions
Introduction
Today, with global transparency frameworks making overseas financial data easily accessible, hiding foreign income/holdings is practically impossible. Recognizing that many taxpayers such as returning NRIs / OCIs, Individuals holding foreign investment from a taxed income but not reported in Schedule FA, persons retaining foreign dormant or low-balance accounts etc. face strict penalties under Black Money Act for unintentional and minor omissions, the Government has introduced FAST-DS 2026.
Filing Window
| Start Date | 16th August 2026 |
| Last Date | 31st December 2026 |
Eligibility – Who can avail FAST-DS 2026??
- Note: The second limb applies to individuals who are NR/RNOR presently. So the relevant question here is – What was the residential status when foreign Income arose or Foreign Asset was acquired????
- Examples:
| Qn. Ms. Shah acquired foreign asset from tax paid salary savings while being resident in India and later moved overseas and became non-resident. While she correctly reported salary to tax but missed to disclose foreign asset in Schedule FA. Ans: She is eligible under the Scheme provided she meets the prescribed conditions and is not disqualified. | Qn. Mr. Jain worked in the United States from 2018 to 2024 being a non-resident. During this period, he acquired US equity shares and bank savings from his earnings. He returned to India in 2025 and became resident. On becoming a resident, he failed to disclose all foreign assets held by him and foreign sourced income earned after being a resident. Ans: He is eligible under the Scheme provided he meets the prescribed conditions and is not disqualified. |
- What is Resident/ Resident but not ordinary resident/ Non-resident/ Undisclosed foreign Income/ Undisclosed asset located outside India??
| Term | Meaning |
| Resident and Ordinary Resident (ROR) | Stay in India ≥182 days in FY OR ≥60 days in financial year + ≥365 days in preceding 4 years. |
| Resident but not ordinary resident (RNOR) | NR in ≥9/10 preceding years OR India stay ≤729 days in preceding 7 years. |
| Non-resident | Not a resident or resident but not ordinary resident. |
| Undisclosed asset located outside India | Foreign asset/financial interest held or beneficially owned, with unexplained or unsatisfactory source of investment. (Here the beneficial-ownership limb matters-an asset held even through a nominee, a trust, or an entity is not outside this ambit merely because the taxpayer’s name is not on it) |
| Undisclosed foreign income | Income from a foreign source taxable in India but not offered to tax under the Income-tax Act |
Amount Payable by Declarant
1. Note: The ₹ 1cr ceiling under Table 1 is an aggregate of what is actually being declared (asset value + income taken together, not each tested separately.)
2. Examples of Table 1 – Never Disclosed and Never Taxed Foreign Income and Assets
| Sr No | Nature of Undisclosed Item(s) | Aggregate Declared Value | Eligibility Status | Tax @ 30% | Additional Amount (100% of Tax) | Total Amount Payable |
| 1 | • Foreign Bank Account inherited in FY 17-18: ₹ 55 Lakh (value as on 31.03.2026) • Foreign Income of FY 20-21: ₹ 25 Lakh (Asset+Income) | ₹ 80 Lakh | Eligible (does not exceed ₹1cr) | • Tax on Value of Asset: ₹16.50 Lakh • Tax on Income: ₹7.50 Lakh Total Tax = ₹24 Lakh | ₹ 24 Lakh | ₹ 48 Lakh |
| 2 | Foreign Income earned in • FY 16-17: ₹ 70 Lakh • FY 19-20: ₹ 80 Lakh (Income+Income) | ₹ 1.5 cr | Not eligible (exceeds ₹ 1cr) | – | – | Scheme benefit not available |
3. Examples of Table 2 – Foreign Asset acquired from Taxed Income but not disclosed in FA Schedule
| Sr. No | Nature of Item(s) | Aggregate Value | Eligibility | Fees payable under Scheme |
| 1 | • Foreign mutual fund acquired in FY 20-21: ₹ 2Cr (value on 31.03.2026) • Foreign shares acquired in FY 22-23: ₹ 2.5Cr (value on 31.03.2026) | ₹ 4.5cr | Eligible (does not it exceed ₹5cr) | Flat fees: ₹ 1 Lakh |
| 2 | • Foreign immovable property acquired in FY 18-19: ₹ 3Cr (value on 31.03.2026) • Foreign securities acquired in FY 21-22: ₹ 3.5Cr (value on 31.03.2026) | ₹ 6.5 cr | Not eligible (exceeds ₹ 5 cr) | Scheme benefit not available |
Valuation of Different Types of Assets (Rule 3)
Value of the asset means the fair market value (FMV) of the asset as on 31.03.2026, determined in the manner prescribed.
The general rule is FMV is the higher of (i) cost of acquisition or (ii) market value as on 31.03.2026. Wherever a formal market valuation is not available, indexed cost of acquisition automatically becomes the deemed FMV.
1. Note:
a. For certain assets like Bullion, jewellery, precious stones, Artistic work, Quoted Shares and Securities, Unquoted Shares and Securities, Immovable Property, Bank Accounts, Interest in firm / AOP / LLP valuation method is separately mentioned in FAST-DS Rule.
b. Treatment where an asset was transferred before 31.03.2026 and whether or not the sale proceeds were reinvested is also mentioned in FAST-DS Rule.
2. Example:
Example: A Dubai apartment bought for ₹ 1.2 cr in 2015; local valuer’s report as on 31.03.2026 certifies market price at ₹ 1.8cr → FMV = Rs 1.8cr.
Procedural Roadmap
Example:
| Particulars | Amount | ||
| Undisclosed Asset and Income Valuation | • Undisclosed Foreign Bank Account (as on 31.03.2026) • Undisclosed Foreign Income (earlier previous years) | ₹60,00,000 ₹20,00,000 | Aggregate Value: ₹80,00,000 (Within Table 1 limit of ₹1 Crore) |
| Tax Computation | • Tax @ 30% on Value of Undisclosed Foreign Asset (₹60 Lakh * 30%) • Tax @ 30% on Undisclosed Foreign Income (₹20 Lakh * 30%) | ₹18,00,000 ₹6,00,000 | Total Tax: ₹24,00,000 |
| Total Scheme liability = Tax computed above + Additional Amount (100% of Tax) | ₹24,00,000 + 100% on ₹24,00,000 | ₹24,00,000 + ₹24,00,000 | Total Scheme Liability: ₹48,00,000 |
| Order Details | Order passed in Form 2 | – | Date of Order: 22.09.2026 |
| Payment Scenario A (No Interest) Payment made on 25.11.2026 | Payment made on or before 30.11.2026 (within 2 months from end of order month 30.09.2026) | ₹48,00,000 | Reported in Form 3 with ₹0 Interest |
| Payment Scenario B (With Interest) Payment made on 17.12.2026 | Delay = 1 month (or part thereof) beyond 30.11.2026. Interest = 1% of ₹48 lakh = ₹48,000. | • Base: ₹48,00,000 • Interest (1%): ₹48,000 | Reported in Form 3 with Interest. Total amount payable = ₹48,48,000 |
| Payment Scenario C Payment made on 05.02.2027 | Maximum additional period allowed is 4 months from 30.09.2026 to 31.01.2027 | – | Since payment is beyond the permitted period, benefit of the Scheme is not available. |
Where the Scheme Does NOT Apply
- Income/assets involving proceeds of crime with proceedings initiated/pending under the Prevention of Money-laundering Act, 2002. or
- Income/assets relating to an AY for which assessment under the Black Money Act is completed.
Grounds on which Declaration can be Made
A declaration may be filed, for any previous year, if any one of the three grounds below is met:
| a. failed to furnish income tax return | b. failed to disclose such asset or income in a return of income furnished | c. such asset or income has escaped assessment u/s 147 under the Income-tax Act |
Validity, Pending Proceedings and Exclusions
1. Declaration shall be deemed invalid if:
(a) any material particular furnished is found to be false at any stage or
(b) the declarant violates any of the conditions of this Scheme.
2. The Assessing Officer shall consider the declaration while finalising the assessment where income/assets are declared under the Scheme and assessment proceedings under Income-tax Act or Black Money Act is pending.
3. A declarant who makes a valid declaration and pays the amount prescribed in timely manner (including extended period) is granted immunity from tax, penalty and prosecution under the Black Money Act in respect of the undisclosed foreign income or asset covered in declaration and shall not be assessed again by including the same in total income of the declarant for any assessment years under the Income Tax Act, subject to the statutory conditions.
4. The declarant cannot claim rectification or revision of what is declared and cannot claim any set-off or relief in any appeal, reference or other proceeding.
5. No amount paid under the Scheme is refundable.
Conclusion
FAST-DS 2026 marks a welcome shift in tax administration, distinguishing deliberate evasion from genuine minor errors. This limited window, from 16.08.2026 to 31.12.2026, offers taxpayers an opportunity to rectify past oversights and achieve peace of mind.
*****
This publication is intended to create awareness. Please consult your CA or financial advisor before taking any decision.Team CVOCA