Having a foreign bank account, overseas investment or property is not, by itself, a tax violation.
However, foreign assets and foreign income may have specific disclosure requirements under Indian tax laws. A taxpayer who failed to disclose a foreign asset or income in the relevant Income Tax Return may face significant compliance and tax consequences.
To provide an opportunity to eligible taxpayers to address certain such cases, the Government has introduced the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026, popularly referred to as FAST-DS 2026.
FAST-DS 2026 is a one-time voluntary disclosure scheme under Chapter IV of the Finance Act, 2026. It enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income or foreign assets that were not declared in the relevant Schedule of the Income Tax Return, subject to specified conditions and payment of tax or fee.
The scheme comes into force on:
16 August 2026
The last date for filing a declaration is:
31 December 2026
No declaration can be filed after 31 December 2026.
The valuation date for determining the value of foreign assets under the scheme is:
31 March 2026
The fair market value of the assets proposed to be declared has to be determined as on this date.
The scheme is available to specified taxpayers based on their residential status in the relevant year.
A person who was resident in India in the relevant previous year may be eligible.
Interestingly, a person who is presently a non-resident may also be eligible in certain circumstances, where the person was resident in India in the year to which the undisclosed foreign income relates or in the year in which the foreign asset was acquired.
The scheme also specifically recognises certain cases involving Resident but Not Ordinarily Resident (RNOR) taxpayers.
Therefore, a taxpayer's current residential status alone may not determine eligibility.
The relevant year and the circumstances in which the foreign income was earned or the foreign asset was acquired need to be examined.
A declaration may be made in specified circumstances, including where the taxpayer:
The scheme can cover income or assets relating to different previous years, subject to the monetary limits and other conditions prescribed under the scheme.
One of the most important aspects of FAST-DS 2026 is that it distinguishes between two different situations.
This category covers:
An undisclosed foreign asset includes an asset or financial interest located outside India where the taxpayer does not have a satisfactory explanation regarding the source of investment, as specified in the FAQ.
The aggregate value of the undisclosed foreign asset as on 31 March 2026 and the undisclosed foreign income must not exceed:
₹1 crore
This category is particularly important for taxpayers who may have a foreign asset but whose underlying income was already offered to tax, or who acquired the asset while they were non-resident, but the asset was not declared in the relevant Schedule of the Income Tax Return.
The aggregate value of the foreign assets covered under this category must not exceed:
₹5 crore
This distinction is important because an omitted foreign asset does not necessarily mean that the underlying income was undisclosed.
The amount payable depends on the category under which the declaration is made.
For undisclosed foreign assets or undisclosed foreign income, the taxpayer is required to pay:
30% tax + an additional amount equal to 100% of the tax
Effectively, the total payment works out to 60% of the relevant value or income.
For example, the FAQ provides a case where:
Foreign bank account value = ₹60 lakh
Undisclosed foreign income = ₹20 lakh
Tax at 30% = ₹24 lakh
Additional 100% of tax = ₹24 lakh
Total amount payable = ₹48 lakh
For foreign assets falling under the second category, where the aggregate value does not exceed ₹5 crore, the prescribed amount is:
₹1 lakh flat fee
If the aggregate value exceeds ₹5 crore, the taxpayer is not eligible to avail the scheme under this category.
The valuation date is 31 March 2026.
As a general rule, the fair market value is the higher of:
The FAQ also refers to valuation supported by a report from a valuer recognised by the government or its agency in the country where the asset is located.
Where such market valuation is not carried out, the indexed cost of acquisition is treated as the fair market value.
Specific valuation rules are provided for different types of assets, including quoted and unquoted shares, jewellery, artwork, foreign bank accounts and interests in foreign firms, AOPs and LLPs.
This makes proper valuation an important part of the declaration process.
The entire process under FAST-DS 2026 is to be completed online.
The declaration is required to be filed in the prescribed form through the Income Tax Department's online system.
Taxpayers should therefore keep the relevant supporting documents ready, including documents relating to the acquisition of the foreign asset or earning of the foreign income and, wherever applicable, valuation-related documents.
The most important point is that a foreign asset can fall into very different tax-compliance situations.
For example:
A taxpayer may have received income that was never offered to tax and used it to acquire an overseas asset.
Another taxpayer may have earned income in India, paid tax on it, and subsequently invested the money in a foreign asset—but failed to report that asset in the relevant Schedule of the ITR.
These two situations should not automatically be treated as identical.
FAST-DS 2026 itself distinguishes between these categories.
Therefore, taxpayers should examine:
The final date for filing a declaration is 31 December 2026.
However, determining eligibility and preparing a declaration may require historical records, bank statements, investment documents, property records and valuation information.
In some cases, establishing the source of funds or the correct valuation may take considerable time.
Therefore, taxpayers who believe that FAST-DS 2026 may apply to them should review their position well before the deadline.
FAST-DS 2026 should not be viewed as a general amnesty for every foreign asset.
It is a specific statutory scheme with:
Therefore, a taxpayer should first determine whether the particular foreign asset or income falls within the scope of the scheme before making any declaration.
Foreign asset disclosure is an area where a small compliance omission can sometimes create a much larger problem later.
FAST-DS 2026 provides eligible taxpayers with a one-time opportunity to review and regularise certain past non-disclosures.
The scheme starts on 16 August 2026 and the last date for filing a declaration is 31 December 2026.
If you have a foreign bank account, overseas investment, foreign property or another foreign asset that may not have been correctly disclosed in your Income Tax Return, this is the right time to review the position.
The important question is not simply:
“Do I have a foreign asset?”
The important questions are:
Was it required to be disclosed?
Was the underlying income already taxed?
What was my residential status when the asset was acquired?
What is the applicable value as on 31 March 2026?
Does FAST-DS 2026 apply to my case?
A careful review before making a declaration can make all the difference.
Every situation differs. Talk to us before you act on anything above.
This article is general information, not professional advice. Tax law changes frequently — please confirm your position with us before acting.