The Indian government has opened a dedicated online compliance window for individuals to voluntarily declare their undisclosed foreign assets and overseas income.
Officially titled the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026), the facility came into effect on August 16. Furthermore, it will remain active until December 31.
The scheme aims to provide relief to small taxpayers, returning non-resident Indians, tech professionals holding foreign stock options, and former international students. Specifically, this is for those who omitted foreign accounts or assets in their past income tax filings.
Two Paths for Regularization
The compliance framework is structured into two distinct categories. The division is based on asset valuation and tax status as of March 31, 2026.
For unreported foreign income or assets valued up to Rs 1 crore, taxpayers can regularize their status by paying a 30 percent tax. In addition, they must pay a 30 percent penalty. Therefore, this results in a total financial outgo of 60 percent.
For foreign assets worth up to Rs 5 crore where the underlying funds were already taxed or acquired while residing abroad as a non-resident, declarants are only required to pay a flat fee of Rs 1 lakh. Moreover, they do not need to pay additional taxes.
Scope, Payment Timeline, and Exclusions
The Central Board of Direct Taxes has specified that all declarations must be submitted electronically through Form 1 on the official Income Tax portal. These submissions should be made before the year-end deadline.
Once a declaration is filed, the tax authority will issue an order within one month stating the precise amount payable. Taxpayers then have two months to make the payment.
A further two-month extension is permitted with interest charged at one percent per month. However, no extensions will be granted beyond that window.
The scheme applies strictly to individual taxpayers. It excludes companies, firms, non-individual entities, and cases involving proceeds of crime under the Prevention of Money Laundering Act.
Protection from Penalties and Prosecution
Taxpayers who complete their online declarations and clear the designated tax or fee payments within the stipulated timelines will receive full statutory immunity.
This immunity protects declarants from the severe penal provisions of the Black Money Act of 2015. Otherwise, this act imposes a 120 percent outgo on undisclosed assets alongside potential criminal prosecution.
It also waives the mandatory penalty of Rs 10 lakh per year. This penalty is typically levied for failing to disclose foreign assets in Schedule FA of the income tax return.
Tax experts caution that while the scheme grants immunity from tax laws, declarants must independently ensure their past transactions comply with the Foreign Exchange Management Act.
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