The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026, a one‑time voluntary programme under Chapter IV of the Finance Act, 2026, is set to come into force tomorrow, August 16. The new provision allows eligible residents and certain former residents to declare undisclosed foreign assets and income in exchange for a fixed tax and fee.
The entire process, abbreviated as FAST‑DS, will be handled online by the Principal Director General of Income‑tax (Systems), as per the recent communications from the Centre.
According to the Income Tax Department, “[The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026] is a one‑time voluntary disclosure scheme…[that] enables eligible taxpayers to declare certain undisclosed foreign assets [and] undisclosed foreign income, on payment of a specified tax or fee.”
The rules were notified in an Extraordinary Gazette on August 14, which also stated that declarations can be filed only up to December 31, 2026.
Who does FAST‑DS apply to?
The Gazette covers two broad categories of cases.
First, undisclosed foreign assets or income that were never offered to tax, subject to a ceiling of ₹1 crore in aggregate value as of March 31, 2026. Here, the taxpayer must pay 30 per cent tax on the value of such assets or income and an additional amount equal to that tax, effectively a 60 per cent levy.
Second, foreign assets worth up to ₹5 crore that were acquired out of taxed income or when the person was non‑resident, but not reported in the relevant schedules of past returns. In that case, a flat fee of ₹1 lakh applies.
If these are done, the valid declarants receive immunity from further tax, penalty, and prosecution under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, for the assets or income disclosed.
The IT department stressed that such declared amounts will not be added back to total income and that the scheme cannot be used to revise earlier assessments or seek set‑offs in appeals.
In short, FAST‑DS is a one‑time opportunity for smaller taxpayers to regularise foreign holdings with a strict cut‑off date before IT enforcement kicks in.
