India Rolls Out New Scheme for Disclosure of Undisclosed Foreign Assets by Small Taxpayers

The Government of India has operationalized the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) 2026, a significant move towards bolstering financial transparency and ensuring tax compliance. Introduced through the Finance Act, 2026, and formally notified by the Central Board of Direct Taxes (CBDT) on August 14, 2026, the scheme became effective from August 16, 2026. This one-time voluntary disclosure window, open until December 31, 2026, is specifically designed for 'small taxpayers' who may have inadvertently failed to report their foreign holdings. The initiative offers immunity from the stringent penalties and prosecution provisions of the Black Money Act for valid declarations. The scheme outlines two primary categories for disclosure. The first caters to undisclosed foreign income or assets where the aggregate value does not exceed ₹1 crore as of March 31, 2026. Taxpayers under this category are required to pay an effective 60% levy, comprising a 30% tax on the value of the asset or income, along with an additional amount equivalent to 100% of the tax. The second category addresses foreign assets acquired from income already subjected to tax in India or during a period of non-residency, but which remained unreported. For such assets, with an aggregate value not exceeding ₹5 crore as of March 31, 2026, a flat fee of ₹1 lakh is applicable. Detailed rules have been prescribed for determining the fair market value of various asset types, including bank accounts, securities, and immovable property, all to be valued as of March 31, 2026. The scheme is particularly beneficial for individuals like returning Non-Resident Indians (NRIs), students with residual foreign bank accounts, and multinational company employees with unreported ESOPs, providing a structured pathway to regularize their financial standing without facing punitive measures.