The Union Budget 2026 has introduced the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS 2026), offering a one-time opportunity for eligible taxpayers to voluntarily disclose their undisclosed foreign income or assets. This scheme aims to facilitate voluntary compliance and simplify the disclosure process for those holding assets or earning income abroad. By declaring these assets and paying the required tax and fee, taxpayers can gain immunity from penalties and prosecution under the Black Money Act, 2015.

Who Should Consider FAST-DS 2026?

FAST-DS 2026 is particularly relevant for small taxpayers who may have inadvertently failed to report foreign income or assets. This includes:

• Employees of multinational corporations (MNCs) receiving Restricted Stock Units (RSUs), Employee Stock Options (ESOPs), or Employee Stock Purchase Plans (ESPPs) from their employers.
• Former students who studied abroad and still have unused or low-balance foreign bank accounts.
• Returning non-residents (NRIs) with undisclosed foreign savings or insurance policies.
• Government or mission staff working overseas who may have foreign financial assets.
• Individuals who held foreign bank accounts, ESOPs, shares, or property.
• Former NRIs who forgot to report assets after returning to India.
• Taxpayers who paid tax on foreign income but missed reporting the asset in their Income Tax Return (ITR).
• Those with old, inactive, or low-value overseas accounts.

What Income and Assets Can Be Declared?

The scheme covers:

• Undisclosed foreign income, such as foreign dividends.
• Undisclosed assets located outside India, such as RSUs or bank accounts.

Key Features of FAST-DS 2026

• One-Time Opportunity: FAST-DS 2026 is a one-time statutory disclosure scheme under the Income-tax Act, 2025, providing a limited window for declaration.
• Immunity from Prosecution: Valid disclosure and payment of the prescribed tax or charges grants immunity from penalty and prosecution, including proceedings under the Black Money (Undisclosed Foreign Income and Assets) Act.
• Electronic Verification: Declarations will be electronically verified.
• Payment Timelines: Defined payment timelines will be in place.
• Non-Refundable Payments: Amounts paid under the scheme are non-refundable.
• Limited Relief: Relief does not extend to cases involving proceeds of crime or ongoing prosecution.

How to Avail the Scheme

To avail of FAST-DS 2026, disclosure must be made in Schedule FA and income in Schedule FSI of ITR-2 or ITR-3. Taxpayers must voluntarily disclose their foreign assets and pay the prescribed tax or fee to be protected from action under the Black Money Act.

Tax and Fees

Under the scheme, a simplified tax structure is in place. A new scheme will allow small taxpayers to declare undeclared foreign assets. This one-time offer covers income or assets up to ₹1 crore. Those eligible will pay 30% of the fair market value or undisclosed income. This payment includes tax and penalty, and participants will gain immunity from prosecution. The declarant is required to pay tax at the rate of 30% of the value of the undisclosed foreign asset as on March 31, 2026, or of the undisclosed foreign income, as the case may be, together with an additional amount equal to 100% of such tax. The total amount payable will be 60% of the value of the asset or foreign income.

Important Considerations

The scheme will come into force from a date to be notified by the Central Government. For foreign assets acquired from disclosed income or during a period of non-residence, the value of the asset must not exceed ₹ 5 Crore as of March 31st, 2026.