Short answer: it depends on the year and on what was missed. For AY 2026-27, a revised return under section 139(5) fixes both the income and the Schedule FA omission. It can be filed fee-free until 31 December 2026 and with a section 234-I fee until 31 March 2027. For earlier years, the revised-return window has closed. An updated return under section 139(8A) can bring omitted income to tax at 25% to 70% extra, but it does not cure the Schedule FA omission under the Black Money Act. FAST-DS does: ₹1,00,000 flat where the asset was funded from taxed or non-resident-period income, or 60% of value where the source is unexplained. It is open until 31 December 2026 and closed to anyone above ₹5 crore. Doing nothing leaves a ₹10 lakh a year penalty exposure on data the department already holds.
If the department's September email about "overseas financial interests" is what brought you here, start with what that email means. This page is the comparison it points to.
Two different laws are involved, and each route answers to only one or both of them:
- The Income-tax Act, 1961 taxes the foreign income: interest, dividends and gains. For tax year 2026-27 onwards the equivalent provisions sit in the Income-tax Act, 2025, with returns in section 263 and tax on updated returns in section 267. Every year discussed here falls under the 1961 Act.
- The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 penalises the reporting failure. Section 43 allows a penalty of ₹10 lakh where a resident, other than a not-ordinarily-resident, leaves a foreign asset or foreign income out of a return furnished under section 139(1), (4) or (5) of the 1961 Act. Since 1 October 2024 it does not apply where the aggregate value of foreign assets, other than immovable property, does not exceed ₹20 lakh.
The timing matters because of what the department now holds. The Foreign Assets Information in the AIS currently covers calendar years 2022, 2023 and 2024. Those map to the Schedule FA of AY 2023-24, 2024-25 and 2025-26, and the revised-return window has closed for all three. The data arriving is for exactly the years where the cheapest cure is no longer available. How to read that report is in Foreign Assets Information in your AIS.
When: only while the window is open. For AY 2026-27, the Finance Act 2026 substituted section 139(5) from 1 March 2026 so that a revised return can be filed until the end of the assessment year, 31 March 2027, or until assessment is completed if that is earlier. It also inserted section 234-I, a fee of ₹1,000 where total income does not exceed ₹5 lakh and ₹5,000 otherwise, for revising late in that window. Practitioners read the fee as applying to revisions after 31 December 2026. The section's wording is not free from doubt, so do not plan on a free revision in the last three months. The 2025 Act equivalent of section 234-I should be checked before it is cited for later years.
What it cures: both halves. A revised return replaces the original, and it is one of the returns section 43 names. The asset goes into Schedule FA, any omitted income goes into the income schedules with interest, and foreign tax credit is claimed through Form 67 alongside it.
What it costs: the tax and interest on any income added, plus the section 234-I fee if you revise late. There is no additional tax of the kind an updated return carries.
If no return was filed at all for AY 2026-27, the equivalent is a belated return under section 139(4), due by 31 December 2026, with the late-filing fee under section 234F (section 428 of the 2025 Act). It is also a return section 43 names. The mechanics of revising are in missed Schedule FA: the revised return window.
When: within 48 months from the end of the relevant assessment year, extended from 24 months by the Finance Act 2025. The additional tax under section 140B (section 267 of the 2025 Act) rises with time, measured from the end of the assessment year:
| Year | Assessment year ended | Additional tax if filed by 31 March 2027 | Last date |
|---|
| AY 2025-26 | 31 March 2026 | 25% of tax and interest | 31 March 2030 |
| AY 2024-25 | 31 March 2025 | 50% | 31 March 2029 |
| AY 2023-24 | 31 March 2024 | 60% | 31 March 2028 |
The rate steps up again on each 1 April. It reaches 70% in the final year. For AY 2022-23, check whether the extension to 48 months reaches a window that had already closed on 31 March 2025 before relying on it. The Finance Act 2026 also reportedly allows an updated return after a reassessment notice, within the time the notice allows, at a further 10%. Confirm the provision for the year concerned before relying on it.
What it cures: the income-tax default. Omitted interest, dividends or gains are taxed, and foreign tax credit can be claimed with it.
What it does not cure: the Schedule FA omission. Section 139(8A) is not among the returns section 43 names, so the original return's failure stands. This is not theoretical. In Shobha Harish Thawani v. JCIT (ITAT Mumbai, 2023), the assessee had offered the interest from a foreign fund investment to tax but left the investment out of Schedule FA for AY 2016-17 to 2018-19. The Tribunal upheld the section 43 penalty. The disclosure requirement covers every foreign asset held, not only undisclosed ones.
Three limits that often decide it:
- An updated return must increase tax. It cannot be a return of loss, lower the liability or create a refund. Where the income was fully taxed and only the asset was missed, there is usually nothing for it to carry.
- It is barred where information for that year, received under an agreement referred to in section 90 or 90A, has been communicated to you before you file. CRS and FATCA data arrive under such agreements. Whether seeing the data in the AIS, or receiving the department's email, counts as that communication has not been tested. It is a reason to act before a specific query arrives, not after.
- The tax, interest and additional tax must be paid before filing, or the return is not valid.
The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 sits at sections 130 to 144 of the Finance Act, 2026. Declarations are made in Form 1 on the e-filing portal until 31 December 2026.
What it cures: the Black Money Act exposure. Section 139 of the Finance Act 2026 grants immunity from further tax, penalty and prosecution under the Black Money Act for what is validly declared and paid, for the previous year ending 31 March 2026 or any earlier year. Section 136 keeps the declared amount out of total income under both Acts. It is the only route that answers section 43 for a year whose revised-return window has closed.
What it costs:
| Entry 1 | Entry 2 |
|---|
| Covers | Undisclosed foreign asset (source unexplained) and/or undisclosed foreign income | Asset funded from income already taxed in India, or earned while non-resident, left out of Schedule FA |
| Amount | 30% of asset value at 31 March 2026, plus 30% of the income, plus 100% of that tax. That is 60% where only an asset is declared | ₹1,00,000 flat |
| Ceiling | Aggregate ≤ ₹1 crore | Asset value ≤ ₹5 crore |
Both ceilings are cliffs, not bands. Above them the Scheme is simply unavailable. RSUs taxed as salary on vesting are not "undisclosed assets", because their source is explained, so the omission of the shares themselves is an Entry 2 matter. The detail, including why a bank account is valued at the sum of every deposit, is in FAST-DS 2026, explained, which also covers who falls outside the ₹5 crore line.
What you give up: the amount paid is not refundable (section 138). You cannot seek rectification or revision of the related assessments (section 137). A declaration with a false material particular is invalid "at any stage" (section 134(3)).
One gateway point for AY 2026-27. Section 132(b) reaches assets left out of a return furnished before the Scheme commenced on 16 August 2026. For AY 2026-27, a revised return is cheaper anyway.
This is a real option only in one situation. Where your aggregate foreign assets other than immovable property have stayed within ₹20 lakh, section 43 does not apply, and there may be nothing to regularise. Whether that threshold reaches defaults before 1 October 2024 is arguable. It is set out in the ₹20 lakh threshold.
Above that line, doing nothing leaves:
- For an explained asset, the section 43 penalty of ₹10 lakh a year. In October 2025 a Special Bench of the Mumbai Tribunal, in Vinil Venugopal, held that the word "may" makes the penalty discretionary rather than automatic. A bona fide omission of a tax-paid investment can be argued as a technical breach. The onus to show good faith is on the taxpayer, and it is a defence to run after a notice, not a plan.
- For an unexplained asset, tax under the Black Money Act at 30% of its value and a penalty of three times that tax: 120% in all, against FAST-DS's 60%. Under the proviso to section 3(1), the asset is taxed in the year it comes to the Assessing Officer's notice, so the exposure does not lapse with time.
- For omitted income, reassessment under section 147 of the 1961 Act, which is section 279 of the 2025 Act.
| Situation | Route | What it cures | Cost | Deadline |
|---|
| Omission only in AY 2026-27 (asset, income or both) | Revised return, s.139(5); belated return, s.139(4), if none was filed | Income and the Schedule FA omission | Tax and interest on added income; s.234-I fee if late | 31 Dec 2026 fee-free; 31 Mar 2027 with fee |
| Asset omitted, income fully taxed, AY 2025-26 or earlier | FAST-DS Entry 2 (nothing if under ₹20 lakh, non-immovable) | Black Money Act exposure on the asset | ₹1,00,000 flat | Declaration by 31 Dec 2026 |
| Asset and income omitted, AY 2025-26 or earlier, source of the asset explained (RSUs, ESPP) | Updated return for the income and Entry 2 for the asset; or Entry 1 on the income and Entry 2 together (on the text, untested) | Income tax via ITR-U; Black Money Act via FAST-DS | Tax, interest and 25% to 70% extra, plus ₹1,00,000; or 60% of the income plus ₹1,00,000 | ITR-U within 48 months; FAST-DS by 31 Dec 2026 |
| Asset and income omitted, source of the asset unexplained, aggregate ≤ ₹1 crore | FAST-DS Entry 1 | Tax, penalty and prosecution under the Black Money Act | 60% of asset value plus 60% of the income | 31 Dec 2026 |
| Assets above ₹5 crore | Revised return for AY 2026-27; updated return for income in earlier years; correct disclosure from now on | Income tax only, for earlier years | As for each route | As for each route |
| Any of the above, doing nothing | — | Nothing | ₹10 lakh a year (s.43) or 120% (unexplained assets), plus reassessment | Exposure continues |
Two combinations are common. Revise AY 2026-27 and declare the earlier years under FAST-DS: a revised return cannot reach back, and FAST-DS is not needed for a year you can still revise. Or file an updated return for omitted dividends and an Entry 2 declaration for the shares: one fixes the income tax with foreign tax credit, and the other fixes the Black Money Act default.
- List each year from AY 2022-23 onwards, with what was missed in each: the asset, the income, or both.
- Reconcile against the AIS report for calendar years 2022 to 2024, and 2025 once it loads. Then add every account the report does not show.
- Check residence for each year. Section 43 applies only to residents other than not-ordinarily-resident. FAST-DS Entry 2 turns partly on income earned while non-resident.
- Establish the source of each asset. Salary-taxed RSUs and remittances from taxed income are explained. Unexplained money changes the entry and the cost.
- Value against the cliffs: ₹20 lakh for section 43, ₹1 crore for Entry 1 and ₹5 crore for the Scheme. Remember that a bank account under FAST-DS is valued at total deposits, not the balance.
- Do the AY 2026-27 revision first. It is the cheapest cure, and it is the only one with a fee-free cut-off inside the FAST-DS window.
For how RSUs, ESPP shares and foreign accounts are taxed and disclosed year by year, see foreign income, RSU and ESOP filing.
This note compares routes under the Income-tax Act, 1961 as amended by the Finance Acts 2025 and 2026, the Black Money Act, 2015 and sections 130 to 144 of the Finance Act, 2026 with the FAST-DS Rules. Every year discussed falls under the 1961 Act. The section 234-I cut-off, the reach of the 48-month updated-return window to AY 2022-23, the post-notice updated return and whether AIS display counts as communicated treaty information are flagged above as points to confirm. The Tribunal decisions cited turn on their facts. Which route fits depends on residence, the source of funds and values year by year, and should be settled before any return or declaration is filed.