FAST-DS 2026: A One-Time Window to Set Foreign Asset Disclosures Right
Introductory Overview
FAST-DS, 2026 provides a one-time window to regularise certain foreign assets and foreign income that were not disclosed in Indian tax returns, including cases where the underlying funds were legitimate and tax-paid. The declaration window runs from 16 August 2026 to 31 December 2026, with 31 March 2026 as the valuation date. Subject to the prescribed conditions, the scheme provides a defined settlement mechanism and immunity from further tax, penalty and prosecution under the Black Money Act.
Why the Scheme Exists - the Black Money Act Backdrop
The Black Money Act can apply where a taxpayer was Resident and Ordinarily Resident in the relevant year, even if the person is non-resident today and there was a failure to disclose a relevant foreign asset or income can result in significant tax, penalty and prosecution exposure. This has become more relevant as information on overseas accounts and investments is increasingly available to the Indian tax authorities through the Common Reporting Standard, FATCA and information reflected in AIS/TIS.
In practice, many mismatches arise from genuine omissions rather than deliberate concealment - for example, ESOP/RSU brokerage accounts, dormant foreign bank accounts, balances left after an overseas assignment, joint or signatory accounts and other overseas investments.
Two Categories of Declaration, and the Cost
Category 1: Covers foreign assets or income that were not offered to tax subject to an aggregate cap of INR 1 crore. Tax payable is 30% tax plus an equal additional amount, effectively 60% of value, .
Category 2: Covers foreign assets acquired from income already offered to tax in India, or from income earned while the taxpayer was a non-resident, but not disclosed in the tax return form. The amount payable is a flat fee of INR 1 lakh, subject to an aggregate cap of INR 5 crore.
| Example: How was the foreign asset funded? | |
| Was the underlying income already taxed in India or earned while the taxpayer was non-resident? | |
| YES - Category 2 | NO / source not satisfactorily explained - Category 1 |
| Flat fee: INR 1 lakh Aggregate cap: INR 5 crore | 30% tax + equal additional amount Aggregate cap: INR 1 crore |
Eligibility & Exclusions
- A person who is currently non-resident or RNOR may still be eligible if the required residential link existed when the income arose or the asset was acquired.
- The scheme may apply where no return was filed, where a return was filed but the foreign asset or income was omitted, or where the relevant income escaped assessment, subject to the prescribed conditions and monetary limits.
- A case where threshold prescribed under para 2 above are not met
- A matter pending under the Prevention of Money Laundering Act (PMLA)
- A pending notice or proceeding does not by itself prevent use of the scheme. However, a year for which a Black Money Act assessment has already been completed falls outside its scope.
Scope of Income & Assets
Undisclosed foreign assets include bank accounts, immovable property shares, funds, partnership or LLP interests, trusts and other financial interests, including assets with beneficial ownership held directly or indirectly.
Undisclosed foreign income includes income from a source outside India that was chargeable to tax in India but was not offered to tax. Income earned while the taxpayer was non-resident and not chargeable to tax in India needs to be distinguished carefully.
Valuation Rules
Valuation is generally based on the prescribed fair market value as on Mar 31, 2026, subject to asset-specific rules. Foreign bank accounts require particular attention because the prescribed value is not simply the closing balance and may be materially higher. This can affect whether the applicable monetary cap is met.
Procedure
Process is electronic and single Form 1 to be filled on or before Dec 31, 2026. Once the payment procedure is done final certificate granting the applicable immunity is issued .
Key Checks & Action Points
- Complete a structured review of their foreign assets, historic disclosures and supporting records.
- Prepare a complete list of foreign accounts, investments & other financial interests, active or dormant and held solely or jointly.
- Reconcile data available on the income tax website with the foreign asset disclosures made in the ITRs.
- Establish source of each asset and the taxpayer's residential status for the relevant year.
- Value the assets as on Marc 31, 2026 and test the aggregate against the applicable monetary cap.
- Assemble supporting documents, including bank statements, ESOP/RSU records, payroll records, remittance evidence and valuation support where required.
- Plan the payment requirement alongside the filing.
Given the Dec 31, 2026 as a deadline and the time needed to identify assets, trace sources, complete valuations and assemble documentation, taxpayers who may be affected should begin the review at the earliest.
Speakers:
Pankaj Aneja, ASA
Ashwath S Pai, ASA
Harshit Mehta, ASA
Watch the webinar recording here: