FAST-DS 2026: the foreign assets disclosure scheme, explained

Short answer: the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 sits at sections 130 to 144 of the Finance Act, 2026. It settles an undisclosed foreign asset at 60% of value against the 120% the Black Money Act charges, or a flat ₹1,00,000 on narrower facts. Non-residents who were resident in the relevant earlier year are eligible. The window opened on 16 August 2026 and closes on 31 December 2026.

Everything below is taken from the Act text and the Rules notified under it.

The fifteen sections

⚠️ A drafting quirk worth knowing before you read the Act. The Scheme was clauses 114 to 128 of the Finance Bill, 2026 and became sections 130 to 144 on enactment — an offset of exactly 16. The internal cross-references were not renumbered. So section 131(1)(e) defines "declarant" as a person filing under "section 116", and section 135(1) refers to "sub-section (2) of section 118". Read those as 132 and 134(2). Looking up section 116 of the Finance Act, 2026 will take you somewhere unrelated.

Who can declare

This is settled by section 131(1)(a), which defines "assessee" for the Scheme in two limbs:

1. A person resident in India within the meaning of section 6 of the Income-tax Act, 1961 in the previous year; or
2. A person who is non-resident or not ordinarily resident in the previous year, who was resident in India either —
   • (A) in the previous year to which the foreign income relates, or
   • (B) in the previous year in which the undisclosed foreign asset was acquired.

Being non-resident today is not a bar. The second limb exists precisely for the person who accumulated a foreign asset while resident, and has since moved abroad. What matters is residence in the earlier year that the income or the acquisition belongs to.

Note that the Scheme is built on the Income-tax Act, 1961 throughout — residence under section 6 of that Act, returns under its section 139, escapement under its section 147, and "previous year" rather than the 2025 Act's "tax year".

What can be declared

Under section 132, a declaration may be made for any previous year where one of three gateways is met:

• (a) you failed to furnish a return under section 139 of the Income-tax Act, 1961; or
• (b) you failed to disclose the asset or income in a return furnished before the Scheme commenced; or
• (c) the asset or income has escaped assessment within the meaning of section 147 of that Act.

Two definitions in section 131 control what qualifies:

"Undisclosed asset located outside India" — an asset, including a financial interest in any entity, held in your name or of which you are the beneficial owner, where you have no explanation about the source of investment, or the explanation is in the Assessing Officer's opinion unsatisfactory.

"Undisclosed foreign income" — income from a source outside India that was chargeable to tax in India but has not been offered to tax.

The beneficial-ownership limb matters. An asset held through a nominee, a trust or an entity is not outside this because your name is not on it.

What it costs — the section 133 Table

Four points the headline "60%" hides:

The ₹1 crore ceiling is an aggregate — of what is actually being declared under Entry 1. Where both an undisclosed asset and undisclosed income are declared, it is the asset value and the income taken together, not each separately: an undisclosed asset of ₹80 lakh carrying ₹30 lakh of unreported income is ₹1.1 crore, and outside Entry 1.

But the aggregation only reaches an asset that is an "undisclosed asset located outside India" as section 131 defines it. Where the source of investment is explained, the asset is not within that definition at all — so it does not enter the base and it is not counted towards the ceiling. Only the income is, and only the income is tested against ₹1 crore.

Where there is both an undisclosed asset and undisclosed income, both enter the base. 30% on each, then 100% on the total tax. Only where an undisclosed asset alone is declared does that reduce to 60% of its value.

⚠️ The case that catches most people reading this page. An employee holding RSUs taxed as a perquisite on vesting has an asset whose source of investment is fully explained — by Form 16. Those shares are not an "undisclosed asset" within section 131, even where they were left out of Schedule FA. The same is true of ESPP stock bought out of taxed salary.

So if ₹5 lakh of dividend on those shares was never offered to tax, the base and the ceiling are that ₹5 lakh — not ₹5 lakh plus the market value of the shares. Adding the share value in is the error that leads a reader to conclude they are outside Entry 1 when they are comfortably inside it. The Schedule FA omission is a separate default, and it is Entry 2 that addresses it.

⚠️ The ₹5 crore figure is a cliff, not a band. CBDT's FAQ puts it beyond argument: where the value of the assets exceeds ₹5 crore, the assessee is not eligible to avail the Scheme — there is no graded charge above the line and no partial declaration of the excess. An aggregate of ₹5.01 crore does not cost more; it leaves you outside Entry 2 entirely. The same logic applies to the ₹1 crore ceiling on Entry 1.

Entry 2 is not a cheaper option you can elect. It is defined by how the asset was funded — from income earned while genuinely non-resident, or from income already taxed in India — and by a failure to report it in the relevant Schedule of the return. That is a matter of evidence: bank trails, residential status for the years concerned, and returns already filed.

Two things the Act left open on Entry 2

Both get asked. The Rules and CBDT's FAQs now largely answer the first.

Is the ₹1,00,000 per year, or once? The Table says "a fee of one lakh rupees" with no per-year multiplier, and the architecture pointed to one-time: the asset is valued at a single fixed date, 31 March 2026, and section 132 permits a declaration covering more than one previous year. Contrast section 43 of the Black Money Act, which is expressly framed per assessment year.

The FAQs strengthen that reading considerably, and on the per-asset question too. The fee is stated as flat, conditional on the aggregate value of the assets not exceeding ₹5 crore — so it attaches to a declaration tested on aggregate value, not to each asset within it. And one Form 1 can carry many assets: the FAQs confirm the relevant parts of the form and its annexure repeat as many times as required for multiple assets or income items. A per-asset fee would sit oddly with both. Read it as one fee, one declaration, across years and across assets — still an inference rather than an express statement, but a much better supported one than before the Rules.

Can Entry 1 and Entry 2 be used together for the same year? Nothing in the text forbids declaring the unreported dividend under Entry 1 and the Schedule FA omission on the shares under Entry 2 — they address different defaults. It is untested, and the rules are not made, so treat it as available on the text but unconfirmed rather than assuming you must pick one.

⚠️ Valuation — where a bank account stops behaving like a bank account

The Rules (Rule 3) and CBDT's FAQs settle how value is computed, and one answer reverses what almost everyone assumes.

The general rule is the higher of the cost of acquisition and the price the asset would ordinarily fetch on the open market at 31 March 2026, ideally supported by a report from a valuer recognised by the government of the country where the asset is located. Where no such valuation is carried out, the indexed cost of acquisition is deemed to be the fair market value — which is a fallback, not a shortcut, and can land either way.

That applies to bullion and jewellery, artistic works, immovable property, and unquoted shares other than equity. Quoted shares take the higher of cost and the average of the lowest and highest quoted price on the valuation date — or on the nearest preceding trading date if there was no trading that day.

A foreign bank account is valued at the sum of every deposit ever made

Not the balance. Not the peak. The total of all deposits into the account from the date it was opened to the valuation date.

This is the single most consequential thing in the FAQs, because it decides who is under the ₹1 crore ceiling at all. An account holding a modest balance today can carry a very large declared value if money has cycled through it for fifteen years.

Two exclusions cut it back:

• Where the account was earlier declared under Chapter VI of the Black Money Act, 2015 and tax and penalty were charged on the value then computed, only deposits made since that declaration are aggregated.
• Redeposits of money withdrawn from the same account are excluded, so the same funds going round twice are not counted twice.

CBDT's own worked example makes the mechanics clear — an account opened in 2010:

Had the same account been declared under Chapter VI earlier, only deposits from 2019 onwards would count — $3,100 instead of $4,900. The $4,900 is then converted to rupees at the valuation date.

The practical consequence: anyone with an old foreign account needs the full statement history, not a current balance certificate. That is the long pole in this exercise, and for accounts opened abroad a decade ago it can take weeks to obtain.

Reinvestment is not counted twice

Where the proceeds of one asset funded another — a property sold, the money parked in an account, part of it later used to buy a second property — the FMV of the first asset is reduced by the amount reinvested, and the new asset is valued separately on its own basis.

Currency

Everything is reported in rupees. A currency designated by the RBI converts at the RBI reference rate on the valuation date. Anything else converts first into US dollars at the rate set by the central bank of the country where the asset sits, then into rupees at the RBI reference rate.

The 20% tolerance — and the one asset it does not cover

Rule 5(2): for assets other than a bank account, a variance of up to 20% between the value you declare and the value the Assessing Officer later determines will not, by itself, make the declaration invalid on grounds of misrepresentation or false particulars.

That is a real safe harbour on genuinely estimated values — property, jewellery, unquoted shares.

It expressly does not extend to bank accounts. And the reason is visible in the rule itself: an account is valued by arithmetic on a statement, not by judgment, so there is nothing to be approximately right about. Bank account figures have to be exact.

What you get

Section 139 — a declarant who makes a valid declaration and pays is granted immunity from any further tax or penalty, and from prosecution, under the Black Money Act, in respect of what is declared, for the previous year ending 31 March 2026 or any earlier previous year. It operates notwithstanding that Act.

Section 136 — the declared income, or the investment in the declared asset, is not included in your total income for any assessment year under either the 1961 Act or the Black Money Act, provided payment is made within the extended period.

The ₹20 lakh threshold — wider than prosecution

Worth knowing alongside the Scheme, because for a good number of readers it removes the problem rather than reducing it.

The Finance (No. 2) Act 2024, with effect from 1 October 2024, raised the exclusion in the provisos to sections 42 and 43 of the Black Money Act to foreign assets other than immovable property with an aggregate value not exceeding ₹20 lakh, replacing an earlier and much narrower carve-out pitched at ₹5 lakh of foreign bank balances.

Those are the penalty provisions — section 42 for failing to furnish a return, section 43 for failing to disclose a foreign asset in one. So below that threshold it is not only prosecution that falls away: the ₹10 lakh per-year penalty for non-disclosure does not apply either. Someone whose entire foreign exposure is a brokerage account of a few lakh may have nothing to regularise.

Two caveats. The threshold excludes immovable property, so a foreign flat sits outside it whatever its value. And whether the raised threshold reaches back to defaults in years before 1 October 2024 is arguable rather than settled — the amendment is prospective on its face, while the contrary argument runs on the penalty being imposed after that date. Worth taking a considered view for the specific year rather than assuming it either way.

What you give up

Less discussed, and it should be weighed before filing.

Section 137 — you cannot claim rectification or revision of any assessment under the 1961 Act or the Black Money Act in respect of what is declared, and cannot claim any set off or relief in any appeal, reference or other proceeding relating to such an assessment.

Section 138 — no amount paid is refundable.

Section 134(3) — the declaration is deemed invalid if any material particular is found false at any stage, or if you violate any condition of the Scheme. There is no time limit on "at any stage".

A declaration is therefore a final step. It closes the position rather than opening a negotiation.

Where the Scheme does not apply

Section 140 excludes two things outright:

• (a) income or assets representing, directly or indirectly, proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002;
• (b) income or assets relating to an assessment year for which assessment proceedings under the Black Money Act have been completed.

A pending proceeding is a different matter. Under section 141, where a declaration is made and assessment proceedings under the 1961 Act or the Black Money Act are pending on the same income or assets, the Assessing Officer shall take the declaration into account while finalising the assessment.

So the line is clean: completed Black Money Act assessment bars you; a pending proceeding does not.

The payment clock — section 135

The timetable is tight, it starts from the declaration rather than from the deadline, and it is worth planning around:

⚠️ There is an outer limit, and missing it forfeits the declaration. CBDT's FAQ states it plainly: the maximum additional period is four months from the end of the month in which the Form 2 order was passed. Payment not made within that outer limit means the benefit of the Scheme ceases to be available for that declaration. The extension is not open-ended, and the consequence of running past it is not interest — it is losing the declaration.

Read against the 31 December deadline, that matters more than it first appears. A declaration filed in late December has its order, its payment window and its certification falling in 2027. The deadline governs when you may declare, not when the money is due — so the two should not be planned as though they were the same date.

✅ Notified and open — the Rules, 16 August 2026

The gap that made this Scheme unusable has closed. CBDT Notification No. 114/2026, dated 14 August 2026, notified the FAST-DS Rules, 2026 under the section 143 rule-making power, and with them the two dates the Act had left blank:

No declaration can be filed after 31 December 2026. That is the whole window, and it does not obviously invite an extension.

The four forms

The Rules also supplied the machinery the Act had deferred — the form of declaration, the manner of verification, and the methods for valuing the asset and computing the amount payable. The process runs through four forms, not one:

Only Form 4 closes the matter. A declaration filed and paid but not carried through to that order is not a finished piece of work.

Valuation

31 March 2026 is the valuation date. Fair market value is computed on prescribed methods that differ by asset class — bank accounts, immovable property, jewellery, shares and securities, artistic works, and a residual category each have their own basis.

The practical consequence: the valuation has to exist before you file, because reports are uploaded with the declaration. That is the slow part of the exercise and the reason a late-December filing is a worse plan than it looks.

The work to do now

None of this is preparation any more — the window is open, and this is the part that takes the time:

1. List every foreign asset and its acquisition year — accounts, brokerage holdings, RSU and ESOP grants, pension accounts, property, financial interests in entities, including anything held beneficially rather than in your own name.
2. Establish your residential status for each relevant previous year. It decides eligibility under section 131(1)(a) and, for entry 2, whether the funding income arose while you were non-resident.
3. Work out whether the source of investment can be explained. The definition turns on having no explanation, or an unsatisfactory one.
4. Get fair market values as at 31 March 2026, and check the aggregate against ₹1 crore — or ₹5 crore for Entry 2, remembering both are cliffs.
5. Pull the full statement history for every foreign bank account, back to the date it was opened. The account is valued on total deposits, not the balance, so a current statement is not enough — and obtaining fifteen years of history from an overseas bank is the slowest step in the whole exercise. Start it first.
6. Check the cheaper alternative first. Where the default is recent, a revised return may be quieter and less expensive — see Missed Schedule FA? The revised return window explained. This Scheme is for what falls outside that window.

⚠️ An updated return does not cure a Schedule FA omission — and this is the point on which the Scheme earns its place.

Section 43 of the Black Money Act attaches to a return furnished under section 139(1), (4) or (5). Section 139(8A) — the updated return — is not in that list. An ITR-U fixes the income-tax default and secures foreign tax credit, but it does not undo the failure to report the asset in an earlier return, because it is not one of the returns section 43 speaks to. A revised return under section 139(5) does, which is exactly why the revised-return window matters so much and why letting it lapse is expensive.

The consequence is not theoretical: the Tribunal has upheld the full ₹10 lakh penalty where the income had been declared and only the asset was left out of Schedule FA. Section 43 penalises the reporting failure itself, independently of whether the money was accounted for and taxed.

That is the gap the Scheme fills for this group. Where the revised-return window has closed and only an updated return remains available, Entry 2 is the route that actually addresses the Schedule FA default — at ₹1,00,000 rather than ₹10 lakh a year.

If your only problem is foreign tax paid and never claimed, that is a different issue — Form 67 and foreign tax credit covers it. For the field-by-field disclosure itself, see Schedule FA from your broker statement.

For how this interacts with RSUs and ESOPs, see foreign income, RSU and ESOP filing. For residential status, DTAA relief and repatriation, see NRI taxation services.

On sources. This page is written from the text of sections 130 to 144 of the Finance Act, 2026 as enacted, not from secondary commentary — which on this Scheme has been unreliable, particularly on non-resident eligibility and on the effect of an existing Black Money Act proceeding.

What remains genuinely unknown is what the rules will say: the form of declaration, the manner of verification, and the prescribed manner of valuing an asset and calculating the amount payable are all left to rules under section 143 that have not been made. This page will be revised when the notification and those rules appear. For anything you are filing or relying on, read the sections themselves.