India’s Foreign Asset Disclosure Window Open Till 2026

The Indian government has opened a one-time disclosure window for small taxpayers to declare undisclosed foreign assets and income, effective from August 16, 2026, until December 31, 2026.

This initiative, named the Foreign Assets of Small Taxpayers–Disclosure Scheme, 2026 (FAST-DS 2026), was first introduced in the Union Budget 2026-27. The Central Board of Direct Taxes (CBDT) has now operationalized it under Chapter IV of the Finance Act, 2026.

Understanding the Disclosure Categories

The scheme is structured into two distinct categories, each with specific eligibility and financial obligations.

Category 1 is designed for taxpayers disclosing foreign assets or income up to ₹1 crore.

Declarations under this category incur a total outgo of 60%.

This 60% comprises a 30% tax and an additional levy equivalent to the tax, applied to both the asset’s value and its accrued income.

For example, an undisclosed foreign bank account valued at ₹60 lakh with ₹20 lakh in undisclosed foreign income would result in a total payment of ₹48 lakh.

Category 2 targets foreign assets worth up to ₹5 crore that were acquired from already taxed income or when the taxpayer was a non-resident, but remained undisclosed in previous tax returns.

Declarations in this category require a flat fee of ₹1 lakh.

Assets exceeding ₹5 crore are explicitly not eligible for this particular category.

Scope of Disclosable Assets

The FAST-DS 2026 scheme comprehensively covers any undisclosed asset located outside India.

This includes financial interests in foreign entities or undisclosed foreign income that was taxable in India but not declared.

The valuation date for these assets is fixed as March 31, 2026.

Generally, the fair market value is determined as the higher of the acquisition cost or the open market price on the valuation date.

Specific valuation methods are detailed for various asset types such as foreign bank accounts, jewellery, property, and securities.

The Filing and Payment Process

Taxpayers must submit their declarations electronically using Form 1.

The entire process is managed online by the Principal Director General or Director General of Income-tax (Systems).

The scheme is open to residents, certain non-residents, and ‘resident but not ordinarily resident’ (RNOR) taxpayers.

Eligibility requires meeting conditions, such as being a resident in India during the year the undisclosed income relates to or when the asset was acquired.

Declarations can address various situations including unfiled returns, undisclosed foreign assets or income in previously filed returns, or income/assets that have escaped assessment.

Upon electronic verification of Form 1, the income-tax department will issue an order in Form 2.

This order, specifying the payable amount, will be issued within one month from the end of the month of declaration.

Payment must be completed within two months of receiving the order.

A further extension of up to two months is permissible, subject to a simple interest charge of 1% per month or part thereof for the delay.

Failure to make the required payment within the extended period will result in the forfeiture of all scheme benefits.

A valid declaration followed by timely payment grants immunity from further tax, penalty, and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.