The government has launched a one-time disclosure window for small taxpayers who have failed to report certain foreign assets or overseas income. Called the Foreign Assets of Small Taxpayers–Disclosure Scheme, 2026 (FAST-DS), the initiative came into effect on August 16 and will remain open until December 31, 2026. The scheme is designed to provide eligible taxpayers with an opportunity to regularise past reporting lapses and obtain immunity from penalties and prosecution under specified tax laws.
The scheme is particularly aimed at individuals such as students, young professionals, technology employees, relocated NRIs and others who may have unintentionally failed to disclose overseas assets or income in their Indian tax returns. The government had announced the initiative in the Union Budget 2026 as a six-month compliance window for taxpayers holding foreign assets or income below specified limits.
FAST-DS broadly covers two categories of taxpayers. The first category applies to individuals who did not disclose their foreign income or assets and where the aggregate value is up to Rs 1 crore. Under this category, the taxpayer has to pay 30% of the fair market value of the foreign asset or 30% of the undisclosed foreign income as tax, along with an additional 30% amount. This can result in a combined outgo of 60% of the declared value.
For example, if an eligible taxpayer declares an undisclosed foreign asset valued at Rs 1 crore under the first category, the combined tax and additional amount could amount to Rs 60 lakh. In return, the taxpayer can receive immunity from prosecution under the applicable provisions, subject to meeting the scheme's conditions.
The second category is aimed at taxpayers who had already disclosed their foreign income or paid the applicable tax but failed to report the corresponding foreign asset. For such cases, the scheme covers foreign assets valued up to Rs 5 crore. Eligible taxpayers can regularise the lapse by paying a flat fee of Rs 1 lakh, according to the government's Budget provisions.
The scheme can cover different types of overseas holdings, including foreign bank accounts, shares, securities, properties and other specified assets. The rules also provide methods for determining the fair market value of assets, which can vary depending on the nature of the holding.
The government's move comes amid increasing use of international information-sharing mechanisms that enable tax authorities to receive information about overseas financial holdings. The limited-time disclosure opportunity is therefore intended to encourage voluntary compliance before stricter enforcement measures are pursued.
However, FAST-DS is not an automatic amnesty for every taxpayer with an overseas asset. Eligibility conditions apply, and certain cases, including taxpayers already facing specific investigations or proceedings, may be excluded. Taxpayers considering the scheme should carefully examine the notified rules and obtain professional tax advice where necessary.
The December 31, 2026 deadline is therefore important for eligible taxpayers. By creating a temporary route to disclose specified foreign assets and income, the government hopes to bring previously unreported overseas holdings into the formal tax system while giving small taxpayers an opportunity to resolve past compliance issues.
