FAST-DS 2026: A Time-Bound Window to Regularise Foreign Asset and Income Disclosures

CBDT notifies the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 and issues 50 FAQs explaining the scope, eligibility, valuation, payment mechanism and relief available under the Scheme.

Background

The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026) is a one-time voluntary disclosure scheme contained in Chapter IV, sections 130 to 144 of the Finance Act, 2026.

The Scheme enables eligible taxpayers to declare specified undisclosed foreign assets, undisclosed foreign income or undeclared foreign assets, subject to the prescribed conditions and payment of the applicable tax or fee.

The Central Government has now notified the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 vide Notification No. 114/2026 dated 14 August 2026. The Rules came into force on 16 August 2026.

CBDT has also issued 50 Frequently Asked Questions (FAQs) explaining various aspects of the Scheme. The last date for filing a declaration is 31 December 2026, while 31 March 2026 has been prescribed as the valuation date for determining the fair market value of assets proposed to be declared.

What Does FAST-DS 2026 Seek to Address?

Foreign asset reporting defaults need not always arise from undisclosed income.

A taxpayer may have a foreign bank account, overseas securities or another foreign asset acquired from legitimate and already-taxed sources, but may have failed to report the asset in the relevant Schedule of the income-tax return.

The Scheme recognises this distinction.

Broadly, it provides separate treatment for:

• undisclosed foreign assets or foreign income which had not been offered to tax; and
• foreign assets whose underlying income had already been offered to tax, or which were acquired while the assessee was non-resident, but which were not reported in the relevant Schedule of the return.

This distinction is central to understanding the Scheme.

Two Categories of Disclosure

The Scheme contemplates two broad categories:

CBDT explains these two categories in FAQs 12 to 20.

The distinction is significant because a reporting omission involving an otherwise explained foreign asset is not treated in the same manner as undisclosed foreign income or an unexplained foreign asset.

Category 1 – Undisclosed Foreign Asset or Income

The first category covers:

• an undisclosed asset located outside India; or
• undisclosed foreign income which had not been offered to tax.

The FAQs explain an undisclosed foreign asset as an overseas asset, including a financial interest in an entity, held by the assessee in his own name or beneficially owned, where the source of investment is unexplained or the explanation is considered unsatisfactory.

Undisclosed foreign income refers to income from a source outside India which was chargeable to tax in India but was not offered to tax.

The aggregate value of the undisclosed foreign asset as on 31 March 2026 together with undisclosed foreign income must not exceed ₹1 crore.

Amount payable

The amount payable comprises:

30% tax on the value of the undisclosed foreign asset / undisclosed foreign income

plus

an additional amount equal to 100% of such tax.

Effectively, therefore, the aggregate payment works out to 60% of the amount declared, subject to the manner in which the Scheme applies to the particular declaration.

Category 2 – Foreign Asset Not Reported, Though Source Is Explained

The second category deserves particular attention.

It covers an asset located outside India which:

• had already been offered to tax; or
• was acquired when the assessee was a non-resident,

but was not declared in the relevant Schedule of the income-tax return.

Where the aggregate value of such foreign assets does not exceed ₹5 crore, the amount payable under the Scheme is a flat fee of ₹1 lakh.

If the aggregate value exceeds ₹5 crore, the FAQs clarify that the assessee is not eligible to avail the Scheme under this category.

This provides a distinct regularisation mechanism for specified foreign asset reporting defaults, as opposed to cases involving untaxed foreign income or unexplained foreign assets.

Who Can Make a Declaration?

The FAQs clarify that eligibility is not determined merely by the taxpayer's residential status on the date of declaration.

An assessee eligible under the Scheme includes a person who was resident in India in the relevant previous year.

The Scheme also contemplates specified circumstances involving a person who is presently non-resident or resident but not ordinarily resident (RNOR), provided that person was resident in India:

• in the previous year to which the relevant undisclosed foreign income relates; or
• in the previous year in which the undisclosed foreign asset was acquired.

CBDT specifically clarifies that a person who is presently non-resident can therefore potentially make a declaration where the prescribed historical residential-status condition is satisfied.

When Can a Declaration Be Made?

According to CBDT's FAQs, a declaration may be made where the assessee:

• failed to furnish a return under section 139 of the Income-tax Act, 1961;
• failed to disclose the asset or income in a return furnished before commencement of the Scheme; or
• the asset or income escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.

The FAQs further clarify that a declaration may relate to any previous year, subject to the monetary thresholds and other conditions of the Scheme.

The declaration window runs from:

16 August 2026 to 31 December 2026

No declaration can be filed after the prescribed last date.

Valuation – An Important Part of Eligibility

The ₹1 crore and ₹5 crore thresholds make valuation a substantive eligibility issue rather than merely a procedural exercise.

The Rules prescribe 31 March 2026 as the valuation date.

Different valuation methodologies apply depending upon the nature of the foreign asset.

Shares and securities

For quoted shares and securities, FMV is generally the higher of:

• cost of acquisition; and
• the prescribed market price based on quotations on an established securities market on the valuation date.

Where there is no trading on that date, the prescribed price on the immediately preceding trading date is considered.

Unquoted equity shares are subject to a prescribed formula-based valuation. Other unquoted shares and securities broadly involve comparison with open-market value, with the Rules also prescribing the treatment where such valuation is not carried out.

Immovable property

Foreign immovable property is generally valued at the higher of:

• cost of acquisition; and
• the price it would ordinarily fetch in the open market on the valuation date, supported by the prescribed valuation report.

Where such market valuation is not undertaken, the Rules prescribe indexed cost of acquisition as the deemed FMV.

Similar principles are prescribed for bullion, jewellery, precious stones, artistic works and certain other assets.

Foreign Bank Accounts – A Different Valuation Approach

The valuation of a foreign bank account deserves particular attention.

The Rules do not simply adopt the balance standing in the account on 31 March 2026.

Broadly, the value is determined with reference to the sum of deposits made into the account from the date of opening until the valuation date, subject to specified exclusions.

Where a deposit represents proceeds of a withdrawal from the same account, it is excluded to avoid double counting. Separate rules apply where the account had previously been declared under Chapter VI of the Black Money Act, 2015.

The Rules themselves contain illustrations explaining this mechanism, and CBDT has further explained the treatment in FAQs 29 to 31.

This means that the closing balance in the foreign account may not represent its value for purposes of FAST-DS 2026.

Avoiding Double Counting

The FAQs also address situations where the proceeds of one asset, or a withdrawal from a bank account, are subsequently used to acquire another foreign asset.

To avoid counting the same economic value twice, the FMV of the original asset or bank account is reduced by the amount reinvested in the new asset, while the new asset is separately valued under the applicable rule.

This can become particularly relevant where taxpayers have moved funds between foreign bank accounts, securities and immovable property over several years.

Conversion of Foreign Currency

All values under the Scheme are required to be reported in Indian Rupees.

CBDT's FAQs explain the conversion methodology depending upon whether the foreign currency is one designated under the applicable RBI regulations.

Where it is not a designated currency, conversion is first made into US Dollars using the prescribed foreign-country rate and thereafter into Indian Rupees using the RBI reference rate on the valuation date.

Valuation Difference – 20% Tolerance in Specified Cases

The FAQs contain an important clarification regarding valuation differences.

For assets other than a bank account, a variance not exceeding 20% of the fair market value declared will not, by itself, render the declaration invalid or void on the ground of misrepresentation, suppression of facts or furnishing false particulars.

CBDT attributes this clarification to Rule 5(2).

This does not dispense with the requirement to undertake the prescribed valuation exercise; rather, it addresses the consequence of a specified degree of valuation difference.

How Is the Declaration Made?

The Scheme envisages an electronic process administered by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), as the case may be.

The Rules prescribe four forms:

CBDT clarifies that multiple assets and income items can be included in a single Form 1 by repeating the relevant entries.

Supporting documents and valuation reports, where applicable, are also required to accompany the declaration.

Payment Timeline

After examination of the declaration, the income-tax authority issues Form 2, determining the amount payable.

The payment is ordinarily required within two months from the end of the month in which Form 2 is received.

The Rules permit an additional period of up to two months, subject to payment of simple interest at 1% for every month or part thereof on the outstanding amount for the period beyond the initial payment period.

Payments under the Scheme may also be made in parts.

Following payment, the declarant furnishes Form 3, and the authority thereafter issues Form 4 certifying the validity of the declaration and payment, subject to compliance with the Scheme.

What Does a Valid Declaration Achieve?

CBDT clarifies that upon a valid declaration and payment, immunity is available from:

• further tax under the Black Money Act, 2015;
• penalty under that Act; and
• prosecution under that Act,

in respect of the income or asset declared.

Further, the income or amount invested in the asset declared under the Scheme is not included in the taxpayer's total income under the Income-tax Act, 1961 or the Black Money Act, 2015.

However, the declarant cannot subsequently seek rectification or revision of an assessment already made, or claim set-off or relief in appeal or other proceedings, in respect of the income, asset or amount covered by the declaration, as explained in FAQ 47.

What About Pending Proceedings?

An important clarification appears in FAQ 49.

The mere pendency of assessment proceedings under the Income-tax Act, 1961 or the Black Money Act, 2015 in respect of the declared income or asset is addressed separately: the Assessing Officer is required to take the declaration into account while finalising the assessment.

This should, however, be distinguished from situations specifically excluded from the Scheme.

Where Is the Scheme Not Available?

According to FAQ 50, the Scheme does not apply in respect of:

• income or an asset which directly or indirectly represents proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; or
• income or an asset relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act, 2015.

Eligibility should therefore be examined before proceeding merely on the basis that the monetary threshold is satisfied.

SSB Perspective

FAST-DS 2026 is more than a disclosure mechanism for unexplained offshore wealth.

Its architecture recognises that foreign asset compliance failures can arise in different circumstances. In particular, the Scheme separately addresses cases where the source of the foreign asset is explained but the asset was not reported in the relevant Schedule of the income-tax return.

1. The first question is not “What is the value of the asset?”

The starting point should be:

Why was the foreign asset or income not reported?

The answer determines whether the case potentially falls within Category 1 or Category 2, which in turn fundamentally changes the monetary consequence.

2. Residential history may matter more than present residential status

Present NRI or RNOR status should not automatically lead to the conclusion that FAST-DS is irrelevant.

The taxpayer's residential status during the year in which the foreign income arose or foreign asset was acquired may need to be reconstructed.

3. Valuation should be undertaken before assuming eligibility

A taxpayer may believe that the foreign assets are below ₹1 crore or ₹5 crore based on current balances or original investment.

That conclusion may be incorrect because the Scheme contains its own valuation rules—particularly for foreign bank accounts.

4. Past returns should be reviewed before filing a declaration

A declaration should not be approached in isolation.

The taxpayer's historical residential status, foreign asset schedules, foreign-source income, acquisition documents, bank statements and earlier tax positions should first be reconciled.

5. The declaration window is finite

The Scheme commenced on 16 August 2026 and closes on 31 December 2026.

Given that valuation reports, historical bank records and supporting documentation may need to be obtained from overseas jurisdictions, taxpayers who may potentially fall within the Scheme would be better served by reviewing their position sufficiently in advance of the closing date.

Practical Review Checklist

A taxpayer may consider reviewing past income-tax returns where he or she has at any time held:

Foreign bank accounts
Overseas shares or securities
Foreign immovable property
Financial interests in overseas entities
Foreign partnership / LLP interests
Bullion, jewellery, artwork or other overseas assets

The review should broadly determine:

Was the underlying income taxable in India?
Was it offered to tax?
Was the asset acquired while the taxpayer was non-resident?
Was the asset disclosed in the relevant foreign asset Schedule?
What is its value under the FAST-DS valuation rules?
Are any proceedings pending or already completed?
Does the taxpayer satisfy the applicable ₹1 crore or ₹5 crore threshold?

Only after these questions are answered should eligibility under the Scheme be evaluated.

Conclusion

FAST-DS 2026 provides a time-bound opportunity for eligible taxpayers to revisit specified past foreign income and foreign asset disclosure defaults.

The Scheme importantly distinguishes between untaxed/unexplained foreign income or assets and foreign assets whose source is otherwise explained but whose reporting was omitted. The monetary consequences under the two categories are materially different.

At the same time, eligibility cannot be determined merely from the present value or closing balance of a foreign asset. Residential status, source of investment, historical reporting, prescribed valuation and the status of any proceedings all require examination.

The Scheme therefore presents both an opportunity and a need for careful review before a declaration is made.

Foreign asset compliance is not only about where an asset is held. It is equally about its source, the taxpayer's residential status, its valuation and whether it was correctly reported.

Further Reference

CBDT has issued 50 Frequently Asked Questions (FAQs) on FAST-DS 2026 covering eligibility, scope of declarations, monetary thresholds, amount payable, valuation, filing procedure, payment, benefits and immunities, and circumstances where the Scheme does not apply.

Readers seeking the detailed statutory and procedural position may refer to the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 and the accompanying CBDT FAQs.

Publication Details

Publication: SSB Tax Insights
Reference: SSB-TI-2026-002
Published by: SSB & Associates, Chartered Accountants
Author: SSB Editorial Team
Reviewed by: CA C S Sreenivas, Partner
Publication Date: 17^th August 2026

Disclaimer

This publication is intended solely for general information and knowledge sharing and should not be construed as professional advice or opinion. The analysis is based on the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026, the Rules notified thereunder and the FAQs referred to above. Eligibility and consequences under the Scheme depend upon the facts and circumstances of each case and the applicable statutory provisions. Readers should refer to the relevant legislation, Rules and official clarifications and seek appropriate professional advice before making a declaration or acting on the basis of this publication.

SSB & Associates
Chartered Accountants