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What is FAST-DS 2026?
The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS) is a one-time amnesty window under Sections 130 to 144 of the Finance Act, 2026. It lets eligible taxpayers declare foreign assets or foreign income omitted from past ITRs by paying either 60% of the asset's fair market value (Category A: undisclosed income, up to Rs 1 crore) or a flat Rs 1 lakh fee (Category B: already-taxed income with missed Schedule FA, up to Rs 5 crore). Declarations must be filed by 31 December 2026.
Source: Finance Act 2026, Chapter IV (Sections 130-144); CBDT Notification No. 114/2026; Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026
Why This Scheme Exists
The income tax department has been running compliance campaigns since 2024, nudging taxpayers who missed Schedule FA disclosures. Over 30,000 taxpayers have already disclosed Rs 29,000 crore in foreign assets after CBDT outreach. But lakhs more have not responded.
The typical case is not a businessperson hiding money offshore. It is a software engineer in Bengaluru whose company granted RSUs that vest in a US brokerage account. TDS was deducted on the perquisite value through Form 16, income tax was paid, but Schedule FA in the ITR was left blank every year because the employee did not know it existed. Under Section 43 of the Black Money Act, that blank Schedule FA can attract a Rs 10 lakh penalty per year even though tax was paid on the underlying income. Since 1 October 2024, this penalty does not apply where the aggregate value of foreign assets other than immovable property is Rs 20 lakh or less.
FAST-DS 2026 provides a way to fix that for Rs 1 lakh total, with immunity from penalty and prosecution, instead of facing multi-year penalty exposure.
Who Should Consider FAST-DS 2026
You likely need this scheme if you fall into any of these categories and have not been reporting foreign assets in Schedule FA of your ITR:
Salaried employees with foreign stock compensation. If your employer grants ESOPs, RSUs, or ESPPs that vest in a foreign brokerage account (E*TRADE, Fidelity, Schwab, Morgan Stanley), those shares are foreign assets. The income may already be taxed through salary TDS, but the asset must still appear in Schedule FA every year you hold it.
NRIs who returned to India. If you maintained a foreign bank account, held shares in a US 401(k) or IRA, or owned property abroad while you were non-resident, and you became resident without disclosing these in your first resident ITR onward.
Freelancers and consultants with foreign clients. If you received payments into a foreign PayPal or Wise account, or hold a foreign bank account from a previous overseas assignment.
Students who worked abroad. If you held a part-time job abroad, opened a bank account, and that account still exists (even with zero balance), it is reportable in Schedule FA once you become a resident taxpayer in India.
Two Categories: Understanding the Cost
FAST-DS 2026 treats two situations differently. Getting the category right determines whether you pay Rs 1 lakh or 60% of the asset's value.
Category A: Undisclosed Foreign Income or Assets
This applies when the foreign asset was acquired from income that was never offered to tax in India. Examples include freelance income deposited in a foreign bank account without declaring it in your ITR, or profits from trading in foreign stocks where capital gains were never reported.
Tax Rate Chart
FAST-DS 2026 Category A: Tax and Penalty
For undisclosed foreign assets or income up to Rs 1 crore FMV
Tax on FMV or income
Flat rate, no slab benefit
Additional amount (in lieu of penalty)
Equal to the tax amount
Total effective cost
Of the FMV as on 31 March 2026
Source: Finance Act 2026, Section 133 (Table, Sl. No. 1)
FMV ceiling: Rs 1 crore (aggregate of all undisclosed foreign assets and income under this category).
Comparison without FAST-DS: Under the Black Money Act 2015, undisclosed foreign assets attract 30% tax plus 90% penalty (three times the tax), totaling 120% of the asset value, plus prosecution risk with imprisonment up to 10 years. FAST-DS halves the financial exposure and eliminates prosecution.
Category B: Already-Taxed Income, Missed Schedule FA
This applies when the foreign asset was acquired from income that was already disclosed and taxed in India (or earned while you were non-resident), but you simply did not report the asset in Schedule FA.
Tax Rate Chart
FAST-DS 2026 Category B: Flat Fee
For omitted Schedule FA reporting on already-taxed or NR-period assets up to Rs 5 crore FMV
Flat fee
One-time, regardless of asset value
No additional tax
Income was already taxed
Total cost
Full immunity from Black Money Act penalties
Source: Finance Act 2026, Section 133 (Table, Sl. No. 2)
FMV ceiling: Rs 5 crore (aggregate of all qualifying foreign assets under this category).
Example. An IT professional holds Rs 50 lakh in vested RSUs in an E*TRADE account. TDS was deducted on the perquisite value through salary and reflected in Form 16 each year. But Schedule FA was left blank for four consecutive years. Without FAST-DS, the Black Money Act penalty exposure is up to Rs 10 lakh per year, or up to Rs 40 lakh for four years. Under Category B of FAST-DS, the entire liability is settled for Rs 1 lakh.
What Qualifies as a Foreign Asset for Schedule FA
Schedule FA in the ITR covers a broader range of assets than most taxpayers expect. All of the following must be reported if you are a resident or ordinarily resident:
- Foreign bank accounts (savings, current, fixed deposit), including dormant accounts and accounts closed during the financial year
- Foreign equity shares, including shares from ESOPs and vested RSUs held in a foreign brokerage account
- Foreign mutual funds, ETFs, and bonds held through any overseas platform
- Foreign real estate (immovable property outside India)
- Beneficial ownership in any foreign trust, entity, or partnership
- Foreign insurance policies
- Signing authority on a foreign bank account owned by someone else (such as a parent or employer)
- Foreign retirement accounts such as US 401(k), IRA, UK pension, or Singapore CPF
The key rule: if you held any financial interest or asset outside India at any time during the relevant calendar year (1 January to 31 December), it goes into Schedule FA. Even a Rs 0 balance foreign bank account is reportable if it was open at any time in that calendar year.
Filing Process: Form 1 Through Form 4
The entire FAST-DS process is electronic, handled through the income tax e-filing portal.
Step 1: File Form 1 (Declaration)
Log in to the income tax e-filing portal. Navigate to the FAST-DS section and file Form 1 electronically. Declare each foreign asset, its nature (Category A or B), and the fair market value as on 31 March 2026.
Deadline for Form 1: 31 December 2026.
Step 2: Receive Form 2 (Order)
The designated authority (Principal Commissioner or Commissioner of Income-tax) verifies your declaration and issues Form 2, specifying the exact amount payable. Form 2 is issued within one month from the end of the month in which Form 1 was filed.
Step 3: Pay and File Form 3 (Proof of Payment)
Pay the amount specified in Form 2 within two months from the end of the month in which you received Form 2. If you miss that, you can still pay within a further period of up to two months, with simple interest at 1% for every month or part of a month of delay. Payment can be made in parts. Submit proof of payment electronically through Form 3. If the full amount is not paid within this outer limit, the declaration loses the benefit of the scheme.
Step 4: Receive Form 4 (Certificate)
Once the authority confirms that your Form 3 payment matches the Form 2 order, it issues Form 4, certifying the declaration is complete. Form 4 is issued within one month from the end of the month in which Form 3 was received.
Form 4 is the document that grants immunity from penalty and prosecution under the Black Money Act for the declared assets and periods.
Valuation Rules
The fair market value of foreign assets is determined as on 31 March 2026. The FAST-DS Rules prescribe specific methods:
Foreign bank accounts. Not the balance on 31 March 2026. The value is ordinarily the sum of all deposits made into the account from the date of opening up to 31 March 2026. Re-deposits of amounts withdrawn from the same account are excluded to avoid double counting, and if the account was earlier declared under the Black Money Act, only deposits after that declaration are counted. For an old salary account with years of deposits, this can be far higher than the current balance.
Foreign shares and securities (quoted). The higher of the cost of acquisition and the average of the highest and lowest quoted price on 31 March 2026 (or the last trading day before it, if there was no trading that day).
Foreign shares (unquoted, including pre-IPO ESOP shares). Valued under a prescribed net-asset-based formula.
Foreign real estate, bullion, jewellery, and artwork. The higher of the cost of acquisition and the market price on 31 March 2026, supported by a valuation report from a valuer recognised by the government of that country.
Assets sold before 31 March 2026. The higher of the cost of acquisition and the sale consideration. Where the sale proceeds were reinvested in another foreign asset, the rules reduce the value to avoid counting the same money twice.
Currency conversion. Converted to INR at the RBI reference rate on 31 March 2026. For currencies without an RBI reference rate, convert first to US dollars and then to INR.
20% variance safeguard. For assets other than bank accounts, if the value later determined by the department differs from your declared value by not more than 20%, that difference alone does not make the declaration invalid.
Who Cannot Use FAST-DS 2026
The scheme explicitly excludes:
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Proceeds of crime. If the foreign asset or income directly or indirectly represents proceeds of crime and proceedings have been initiated or are pending under the Prevention of Money Laundering Act, 2002.
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Completed Black Money Act assessments. If assessment or reassessment proceedings under the Black Money Act have already been completed for the relevant year and the asset in question.
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Assets exceeding the FMV ceiling. Category A declarations where aggregate FMV exceeds Rs 1 crore, or Category B declarations where aggregate FMV exceeds Rs 5 crore, cannot use this scheme.
Pending proceedings are not an exclusion. If assessment proceedings under the Income-tax Act or the Black Money Act are pending for the declared asset or income, you can still declare, and the Assessing Officer must take the declaration into account while finalising the assessment.
FEMA is outside the scheme. FAST-DS gives immunity under the Black Money Act. It does not expressly give immunity under the Foreign Exchange Management Act, so any FEMA issue with how the asset was acquired or held needs to be looked at separately.
If you are excluded from FAST-DS, the standard route is to file updated returns (ITR-U) for the relevant years and pay the applicable tax with interest, though ITR-U does not provide immunity from Black Money Act prosecution.
FAST-DS vs Other Options
Tax Rate Chart
Cost Comparison: FAST-DS vs Black Money Act vs ITR-U
For a Rs 50 lakh foreign asset (already-taxed income, 4 years of missed Schedule FA)
FAST-DS Category B
Flat fee, full immunity
ITR-U (updated return)
25% to 70% extra tax only on income added; no Black Money Act immunity
Black Money Act penalty
Up to Rs 10 lakh per year x 4 years (Section 43)
Black Money Act (undisclosed income)
30% tax + 90% penalty on Rs 50 lakh
Source: Finance Act 2026; Black Money Act 2015; Income-tax Act Section 139(8A)
For Category B cases (already-taxed income, missed Schedule FA), FAST-DS at Rs 1 lakh is overwhelmingly the better option compared to up to Rs 40 lakh in Black Money Act penalties. Even for Category A cases, the 60% effective rate is half the 120% exposure under the Black Money Act.
Filing an updated return (ITR-U) can fix the Schedule FA omission for recent years, but ITR-U does not provide immunity from Black Money Act prosecution. If you have multiple years of non-disclosure, FAST-DS closes all of them with a single declaration.
Common Scenarios
Scenario 1: Software Engineer with RSUs
Ravi works at a US tech company's India office. He received RSUs worth Rs 30 lakh over three years, all vested in an E*TRADE account. His employer deducted TDS on the perquisite value and reported it in Form 16. Ravi filed his ITR and paid tax on the salary income, but never filled Schedule FA.
Category: B (income already taxed). FMV: Rs 30 lakh (within Rs 5 crore ceiling). Cost under FAST-DS: Rs 1 lakh. Cost without FAST-DS: Up to Rs 10 lakh per year x 3 years = up to Rs 30 lakh in penalties.
Scenario 2: Returned NRI with US Bank Account
Priya worked in the US for six years and maintained a Chase checking account. She returned to India in 2023, became a resident, and has filed ITRs for three years without reporting the US bank account in Schedule FA. The account balance today is about Rs 10 lakh, but total deposits since she opened it come to about Rs 45 lakh at the RBI reference rate on 31 March 2026.
Category: B (asset acquired from income earned while non-resident). Declared value: About Rs 45 lakh, the sum of deposits, not the balance (within Rs 5 crore ceiling). Cost under FAST-DS: Rs 1 lakh. Cost without FAST-DS: Her only foreign asset is a bank account worth about Rs 10 lakh, below the Rs 20 lakh threshold, so the Rs 10 lakh Schedule FA penalty under Section 43 may not apply to her. For her, FAST-DS mainly buys immunity and closure. Whether that is worth Rs 1 lakh depends on her full foreign asset history, so check it before paying.
Scenario 3: Freelancer with Undisclosed Foreign Income
Arjun earned Rs 8 lakh per year from a US client, deposited into a Wise account. He did not declare this income in his ITR or report the Wise account in Schedule FA for two years. Total undisclosed income: Rs 16 lakh.
Category: A (income never offered to tax). Declared value: Rs 16 lakh (within Rs 1 crore ceiling). The same money is both the undisclosed income and the deposits in the Wise account. The rules are designed to avoid counting it twice, so confirm how Form 1 splits it between income and the account. Cost under FAST-DS: Rs 16 lakh x 60% = Rs 9.6 lakh. Cost without FAST-DS: Rs 16 lakh x 120% (Black Money Act) = Rs 19.2 lakh, plus prosecution risk.
Practical Steps Before Filing
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List all foreign assets. Check E*TRADE, Fidelity, Schwab, Interactive Brokers, Vanguard, or any other foreign platform where you hold or held assets. Include foreign bank accounts, even if dormant.
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Determine your category. If TDS was deducted on the income that funded the asset (visible in Form 16 or Form 26AS), you likely qualify for Category B at Rs 1 lakh. If the income was never declared, it is Category A at 60%.
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Get values as on 31 March 2026. For shares and other assets, download statements showing market values as on 31 March 2026. For foreign bank accounts, pull statements from the date of opening, because the value is the total of deposits, not the balance. Convert to INR using the RBI reference rate for 31 March 2026.
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Check the ceiling. Category A: aggregate FMV must not exceed Rs 1 crore. Category B: aggregate FMV must not exceed Rs 5 crore. If you exceed the ceiling, FAST-DS does not apply.
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Consult a CA for mixed cases. If some assets are Category A (undisclosed income) and others are Category B (already taxed), the classification must be done asset by asset. The ceilings apply separately.
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File Form 1 well before 31 December. Do not wait until the last week. The authority must process your declaration, issue Form 2, and you must pay and file Form 3, each with month-end deadlines. Filing in September or October gives enough buffer for the entire Form 1-to-Form 4 cycle.
After FAST-DS: Fix Schedule FA Going Forward
FAST-DS closes the penalty exposure for past years. But from the current assessment year onward, you must report foreign assets in Schedule FA of every ITR you file. This includes:
- Reporting each foreign bank account, equity holding, and financial interest separately in the relevant table of Schedule FA
- Disclosing the peak balance in foreign bank accounts during the year, not just the closing balance
- Filing Form 67 if you are claiming foreign tax credit for taxes paid in the other country
If your foreign assets change (you sell RSUs, close a bank account, or acquire new foreign shares), update Schedule FA in the next ITR accordingly. The FAST-DS immunity covers only the declared assets for past periods. Future non-disclosure will attract fresh penalties.
Key Dates at a Glance
Tax Rate Chart
FAST-DS 2026 Timeline
Critical dates for the Foreign Assets Disclosure Scheme
Scheme effective date
CBDT Notification 114/2026
Valuation date (FMV)
All assets valued as on this date
Form 1 (declaration) deadline
File on income tax e-filing portal
Form 2 (order) issued within
From end of month of Form 1 filing
Payment and Form 3 deadline
From end of month of Form 2 receipt; plus up to 2 more months at 1% interest per month
Form 4 (certificate) issued within
From end of month of Form 3 receipt
Source: FAST-DS Rules, 2026
If you file Form 1 in September 2026, expect Form 2 by end-October, payment deadline by end-December (end-February 2027 at the latest, with interest), and Form 4 by end-January 2027. Filing earlier gives more time to arrange funds for Category A payments.
Source Law and References
- Finance Act, 2026, Chapter IV, Sections 130 to 144
- CBDT Notification No. 114/2026 (Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026)
- Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
- Income-tax Act, 1961 / Income-tax Act, 2025, Schedule FA reporting requirements
- RBI reference rates for foreign currency conversion
