T
here is a particular kind of dread that comes with realising you forgot to declare something to the tax department. Not evaded, forgot. A brokerage account opened during a stint abroad. Employee stock options from a foreign employer that never made it into Schedule FA. A savings account left dormant in another country after moving back to India.
That specific anxiety is what the Central Board of Direct Taxes says it built its newest scheme around. The Foreign Assets of Small Taxpayers Disclosure Scheme, or FAST-DS 2026, went live on August 16 and stays open for online declarations until December 31, 2026. It was first flagged by Finance Minister Nirmala Sitharaman in the 2026-27 Budget speech, and the CBDT has now notified the rules that make it operational.
FAST-DS splits taxpayers into two tracks, and which one applies changes the bill dramatically.
Category A covers people who never paid tax on the foreign asset or income at all. If the combined value of these undisclosed holdings, valued as of March 31, 2026, comes to Rs 1 crore or less, the taxpayer pays 30 percent tax plus an additional amount equal to that tax. Total outgo: 60 percent of the value.
Category B is for a much more forgivable slip. Here the income was already taxed in India, or the asset was acquired while the person was a non-resident, but it simply never got reported in the return's foreign assets schedule. For these cases, if the asset value is under Rs 5 crore, the fix costs a flat Rs 1 lakh. No percentage, no slab. Just a fee, filed electronically through Form 1.
Anyone with Category B assets above Rs 5 crore does not qualify at all.
To understand why anyone would opt into paying the government money voluntarily, it helps to look at what happens without the scheme.
Under the Black Money Act, 2015, unreported foreign assets attract 30 percent tax plus a penalty that can run up to three times that tax, pushing total exposure to around 120 percent of the asset's value. Separately, Sections 42 and 43 impose a flat Rs 10 lakh penalty per asset, per year of non-disclosure, and this applies even when the lapse was accidental. Layered on top of that sits the possibility of criminal prosecution, with jail terms that some legal commentary puts as high as ten years.
There is one recent softening, though it sits outside FAST-DS itself. The Finance Act 2026 has also introduced a standing exemption from prosecution where total undisclosed movable foreign assets, excluding property, stay under Rs 20 lakh, and this relief has been made retrospective to October 1, 2024.
Once a FAST-DS declaration is paid and processed, the CBDT says the immunity from both the Black Money Act and the Income-tax Act, 1961 is automatic. Not something an officer decides case by case. It kicks in by operation of law.
CBDT officials have been fairly specific about the intended audience: students who studied abroad and left a bank account open, young professionals with vested RSUs from a foreign employer, IT staff holding foreign stock through ESOPs, and Indians who returned home after years overseas and simply didn't realise old holdings needed reporting each year.
It is worth noting this isn't the government's first attempt to nudge this exact group. A compliance campaign run through late 2024 and into 2025, built on data India receives from over a hundred countries under the Common Reporting Standard and FATCA, already pushed voluntary disclosures from roughly 60,000 in Assessment Year 2021-22 to more than 2.3 lakh by AY 2024-25, surfacing upwards of Rs 29,000 crore in previously unreported foreign assets along the way.
Declarations go through Form 1, filed online. The tax authority electronically verifies the claim and is expected to issue an order confirming the payable amount within a month, after which the taxpayer has two months to pay, with a further two-month extension available for 1 percent monthly interest.
Tax professionals tracking the scheme are already framing December 31 less as a deadline and more as a closing door. FATCA and CRS data sharing only gets more granular each year, and a one-time amnesty, by definition, does not tend to repeat.
FAST-DS 2026, notified by the CBDT and effective from August 16, gives resident taxpayers and certain returning NRIs until December 31, 2026 to voluntarily declare foreign assets or income that slipped through their tax filings. Fully undisclosed holdings up to Rs 1 crore attract a 60 percent combined tax and penalty, while assets already taxed but missing from Schedule FA, up to Rs 5 crore, can be regularised with a flat Rs 1 lakh fee. Skipping the window leaves taxpayers exposed to the Black Money Act's steeper 120 percent liability, a Rs 10 lakh per-asset annual penalty, and possible prosecution, though a new retrospective exemption now shields aggregate movable foreign holdings under Rs 20 lakh from criminal proceedings. The scheme is aimed chiefly at students, young professionals, and returning NRIs whose lapses were more oversight than intent.
