- Finance Minister Nirmala Sitharaman announced a one-time, six-month foreign asset window for small taxpayers in February.
- The government has notified the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS) under Chapter IV of the Finance Act, 2026.
- The scheme allows declaration of undisclosed foreign assets/income up to ₹1 crore (Category 1) and assets up to ₹5 crore (Category 2) with specified tax/fee payments.
- Taxpayers making valid declarations will receive immunity from further tax, penalty, and prosecution under the Black Money Act, 2015.
- The valuation date for the assets is March 31, 2026; declarations must be made electronically in Form 1.
India's new FAST-DS scheme allows small taxpayers to voluntarily disclose foreign assets and income, providing immunity from penalties under the Black Money Act.6
The scheme categorizes assets into two groups: Category 1 allows declarations of undisclosed foreign assets or income up to ₹1 crore, while Category 2 covers assets up to ₹5 crore that were previously taxed but not reported.45
Taxpayers must pay 30% of the fair market value of undisclosed assets or income as tax, plus an additional 30% as a penalty substitute for immunity. For Category 2, a fee of ₹1 lakh grants immunity from penalties and prosecution.
The scheme excludes assets linked to criminal proceedings or those already assessed under the Black Money Act.
The valuation date for assets is set for March 31, 2026, with fair market value determined by the higher of acquisition cost or market price.78
This initiative aims to encourage compliance among small taxpayers and reduce the shadow economy.
“Taxpayers can disclose their foreign bank accounts, immovable property, jewellery, artistic work, shares, securities or any other asset or income,” a government official stated.
The scheme also allows reporting of unreported restricted stock units (RSUs) or Employee Stock Option Plans (ESOPs), particularly for tech sector employees.
The government hopes this scheme will enhance transparency and compliance in foreign asset declarations.
“The scheme covers two categories: undisclosed foreign assets up to ₹1 crore and assets up to ₹5 crore already taxed or acquired as non-resident, with a fee of ₹1 lakh for the second. Taxpayers must pay 30% tax plus 30% additional tax in lieu of penalty for the first category, and declarations are due by March 31, 2026.”
Vajiram & Ravi
The Indian Express
