The Indian government has introduced a new voluntary disclosure scheme aimed at small taxpayers, allowing them to declare previously undisclosed foreign assets and income. Announced as part of the 2026-27 Budget,the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) will take effect on August 16, 2026,and will remain open for online declarations until December 31, 2026.
Under this scheme, taxpayers will face a hefty tax burden of 60% on the value of their declared assets or income. This includes a 30% tax on declared amount, along with an additional charge equal to that tax. The Central Board of Direct Taxes (CBDT) has stated that the fair market value of the assets will be assessed as of March 31, 2026.
FAST-DS is particularly designed for groups such as students,young professionals, technology workers, and relocated non-resident Indians who may not have reported their foreign holdings. The scheme aims to bring these overseas assets into the tax framework while shielding eligible taxpayers from potential penalties or prosecution .
There are two distinct categories for declarations under the FAST-DS. The first category allows taxpayers to declare foreign assets or income not previously reported, with a cap of ₹1 crore. The second category pertains to foreign assets that have already been taxed or were acquired while the taxpayer was a non-resident but were not included in the relevant tax-return schedule. For this category, threshold is set at ₹5 crore,and fee of ₹1 lakh is required.
For instance,if taxpayer discloses an undisclosed foreign bank account valued at ₹60 lakh and foreign income of ₹20 lakh,the total tax payable would amount to ₹48 lakh. This example illustrates financial implications of the scheme, as outlined in the CBDT's frequently asked questions.
Taxpayers who make valid declarations will gain immunity from any further tax liabilities,penalties, or prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Additionally,the income or investment amount disclosed will not be counted as part of taxpayer's total income under the Income-tax Act, 1961 or the Black Money Act.
The introduction of FAST-DS reflects the government's ongoing efforts to enhance tax compliance and transparency regarding foreign assets. By providing a structured pathway for voluntary disclosure,the initiative seeks to encourage taxpayers to come forward without fear of severe repercussions.
