FAST-DS: Foreign Assets Disclosure Scheme for Small Taxpayers – Eligibility, Two Categories, 60 Per Cent Tax, Dates and Facts

Context

• The Income Tax Department notified FAST-DS, a voluntary disclosure scheme that lets small taxpayers declare certain undisclosed foreign assets and income by paying an effective 60 per cent tax, without further penalty or prosecution.
• It targets students, young professionals, technology employees and relocated non-resident Indians whose overseas accounts, ESOPs or property went unreported because of inadvertence, lack of awareness or a change in residential status.

The Scheme at a Glance

• Announced in: Union Budget 2026-27; legal basis: Chapter IV of the Finance Act, 2026.
• Notified by: CBDT; in force from: 16 August 2026; closes on: 31 December 2026.
• Valuation date: 31 March 2026; filing: electronically, in Form 1.
• Benefit: immunity from further tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Who Is Eligible

• An assessee who is resident in India in the relevant previous year.
• A non-resident or RNOR (resident but not ordinarily resident) may also qualify if he was resident in India in the year to which the undisclosed income relates or in the year the asset was acquired.
• Situations covered: failure to disclose the asset or income in a return filed before the scheme began, or income that has escaped assessment under Section 147 of the Income-tax Act, 1961.

The Two Categories

• Category A – undisclosed foreign asset or income never offered to tax: value ceiling Rs 1 crore (as on 31 March 2026); payable 30 per cent tax plus an additional amount equal to the tax – effective 60 per cent; not eligible above the ceiling.
• Category B – foreign asset already offered to tax, or acquired while the assessee was a non-resident, but not declared in the ITR’s foreign-asset schedule: value ceiling Rs 5 crore; payable a flat fee of Rs 1 lakh; not eligible if assets exceed Rs 5 crore.

Why the Scheme Exists

• The Black Money Act, 2015 imposes 30 per cent tax, a 90 per cent penalty and prosecution for undisclosed foreign assets, with a Rs 10 lakh penalty for merely failing to report an asset in the return.
• Automatic exchange of financial information under the OECD’s Common Reporting Standard and FATCA now gives the department data on Indians’ foreign accounts; many small cases involve genuine oversight rather than evasion, so a one-time window clears them without litigation.
• It follows the model of earlier windows – the 2015 Black Money Act compliance window and the Income Declaration Scheme, 2016.

FAQs

Who is a “small taxpayer” under FAST-DS?

The scheme defines it by the value of foreign assets – up to Rs 1 crore of never-taxed assets or up to Rs 5 crore of already-taxed but unreported assets – rather than by income.

Does paying under FAST-DS settle income-tax on the same asset?

Category A payment covers the undisclosed income; Category B is only a fee for non-reporting because the income was already taxed.

Why is this asked in RBI and NABARD exams?

Tax amnesty and disclosure schemes, the Black Money Act and Budget announcements are standard economy questions.