Small Taxpayers Get Disclosure Relief
Key Highlights:
- FAST-DS takes effect from August 16, 2026.
- Online declarations will remain open until December 31, 2026.
- Eligible taxpayers will pay an effective 60% tax on certain undisclosed assets or income.
- The scheme primarily targets small taxpayers with limited overseas holdings.
- Eligible declarations can provide immunity from further tax, penalties and prosecution.
- Foreign assets will generally be valued as of March 31, 2026.
New Delhi, August 15: The Income Tax Department has notified a new voluntary disclosure scheme allowing eligible small taxpayers to declare certain undisclosed foreign assets and income by paying an effective tax of 60 per cent.
The Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS), announced in the Union Budget 2026-27, will come into effect from August 16, with taxpayers allowed to submit declarations online until December 31, 2026.
The scheme is aimed at taxpayers such as students, young professionals, technology employees and relocated non-resident Indians who may have failed to disclose eligible foreign assets or income in their tax returns.
Under FAST-DS, taxpayers will pay tax at 30 per cent on the value of the declared undisclosed foreign asset or income. An additional amount equivalent to the tax will also be payable, taking the effective levy to 60 per cent.
The fair market value of the assets will be determined as of March 31, 2026, according to the Central Board of Direct Taxes (CBDT).
The scheme provides for two categories of declarations. In the first category, an undisclosed foreign asset or foreign income that was not previously offered to tax can be declared if its aggregate value does not exceed Rs 1 crore.
The second category covers foreign assets that were already offered to tax or acquired when the taxpayer was a non-resident but were not reported in the relevant tax-return schedule. The threshold for such declarations is Rs 5 crore, subject to a Rs 1 lakh fee.
The CBDT said FAST-DS is designed to allow eligible taxpayers to disclose certain undisclosed foreign assets, undisclosed foreign income or undeclared foreign assets by paying the specified tax or fee.
For instance, if an undisclosed foreign bank account is valued at Rs 60 lakh and undisclosed foreign income amounts to Rs 20 lakh, the total tax payable under the scheme would be Rs 48 lakh.
Taxpayers making valid declarations will receive immunity from further tax or penalties and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in relation to the assets or income disclosed under the scheme.
The government has positioned FAST-DS as a mechanism to bring certain overseas assets and income into the tax system while providing eligible taxpayers an opportunity to regularise their position without facing additional penalties or prosecution.
