FAST-DS 2026 scheme: Steps to declare undisclosed foreign assets

What is FAST-DS 2026?

Many Indians hold money or assets abroad. For example, a student opens a bank account in Canada. A tech employee gets US stock units from an employer. A family buys a flat in Singapore. Years later, they realise they never reported any of it when filing their income tax return in India.

Under the Black Money Act, 2015, it can lead to heavy tax, penalties, and even prosecution. Most of these cases involve small amounts and honest mistakes. So the Union Budget 2026-27 announced a one-time fix: the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, or FAST-DS 2026.

The scheme lets you declare your undisclosed foreign assets or income, pay a fixed tax or fee, and close the matter. The asset value limit is up to ₹1 crore for category 1 and up to ₹5 crore for category 2. 

FAST-DS 2026 implementation date

The Budget announced the scheme on 1 February 2026. The Finance Act came into effect on 1 April 2026. However, the scheme became operational when CBDT notified the FAST-DS Rules, 2026 on 14 August 2026.

Who can use the FAST-DS 2026 scheme?

If you are a resident in India (under section 6 of the Income-tax Act, 1961) in the relevant year, you are eligible. The scheme also welcomes people who are now NRIs or RNORs, as long as they were resident in India either:

• In the year the undisclosed foreign income relates to, or
• In the year they acquired the undisclosed foreign asset.

So if you earned the income or bought the asset while living in India and later moved abroad, you can still file. Form 1 asks you to state your residential status for that year.

You can file a declaration if any one of these applies to you:

• you did not file your income tax return under section 139,
• you filed a return before the scheme started but left out the asset or income, or
• the asset or income escaped assessment under section 147.

You can declare income or assets from any past year, as long as you stay within the value limits.

Who cannot use the FAST-DS 2026 scheme?

Section 140 of the Finance Act, 2026 shuts two kinds of cases out of the scheme completely:

• Proceeds of crime under PMLA: Income or assets representing proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money Laundering Act, 2002.
• Years already assessed under the Black Money Act: Any income or asset relating to an assessment year for which assessment under the Black Money Act, 2015 has already been completed. A pending assessment does not bar you. Section 141 requires the officer to take the declaration into account.

Two categories, two price tags

The FAST-DS scheme is divided into two categories: 

Let’s look at two examples below: 

Category 1 example

Ankit did freelance work for foreign clients, and the income was paid into an overseas account while he lived in India. He can’t prove where all the money came from. The deposits since he opened the account add up to ₹40 lakh, and he also earned ₹10 lakh of foreign income that he never declared for tax in India. 

His total of ₹50 lakh stays within the ₹1 crore limit, so he falls under Category 1. He pays 30% tax, which is ₹15 lakh, plus an equal additional amount of ₹15 lakh, so his total bill is ₹30 lakh.

Category 2 example

Priya works for a US tech company in Bengaluru. She received RSUs that are now worth ₹1.8 crore. Her employer deducted TDS every time the shares vested, so she has already paid tax on them. But she never listed her US brokerage account in Schedule FA.

Her assets come from taxed income and stay within the ₹5 crore limit, so she falls under Category 2. She pays a ₹1 lakh fee, regardless of the value of her shares. If she also received dividends on the shares that she never offered to tax, those dividends would be declared under Category 1 at 60%.

How to value your foreign assets under FAST-DS 2026?

Your category and your bill both depend on the value you declare, so valuation is where most mistakes happen. Under Rule 3 of the FAST-DS Rules, the general rule is to take the higher of what you paid for the asset and its open-market value on 31 March 2026. Where you don’t get a proper valuation done, the indexed cost of acquisition is treated as the fair market value.

Currency conversion: Values in RBI-designated currencies, such as the US dollar, are converted to rupees at the RBI reference rate on 31 March 2026.

An example for US shares

Rohan bought 100 shares of a US-listed company for $15,000. On 31 March 2026, the stock traded between a low of $200 and a high of $210, giving an average of $205 per share.

• Market value: 100 × $205 = $20,500
• Cost: $15,000
• Value to declare (the higher of the two): $20,500
• In rupees, at an illustrative rate of ₹85: ₹17,42,500

Use the actual RBI reference rate for 31 March 2026 in your own calculation.

Two more rules worth knowing

No double counting: If you sold one asset or withdrew money and reinvested it in another foreign asset, the earlier asset’s value is reduced by the amount reinvested.

20% tolerance: If the department later values an asset differently, a difference of up to 20% will not by itself cancel your declaration. This tolerance does not apply to bank accounts, so those figures must be exact.

Because bank accounts are valued on deposits, request full statements from the date of opening before you assume you are within the limit. Overseas banks can take weeks to send old statements.

What you need before filing your declaration

Keep the following documents ready before submitting your declaration: 

1. PAN card: Your PAN is registered on the Income Tax Department’s e-Filing portal.  
2. Foreign asset details: Keep proper documents of your foreign assets/income you want to declare. For example, property, shares, securities, bank account details, jewellery, along with their fair market value. 
3. Supporting documents: Keep your relevant documents ready, such as passport details, property or jewellery valuation reports, artwork valuations, and income or asset value calculations. You can upload these in PDF or ZIP format, with each attachment limited to 5 MB. 
4. e-Verification: You can e-verify using an OTP sent to your Aadhaar-linked mobile number, a Digital Signature Certificate (DSC), or an Electronic Verification Code (EVC) generated through your bank account or demat account. 

Steps to file FAST-DS 2026 Form 1

You can submit your declaration under FAST-DS 2026 via the Income Tax Department’s e-Filing portal. Here’s how to do it: 

Step 1: Open the Income Tax Forms section

Log in to the Income Tax e-Filing portal and go to e-File > Income Tax Forms > File Income Tax Forms.

Step 2: Select Form 1

Under Forms as per Other Acts, find Foreign Assets of Small Taxpayers Disclosure Scheme 2026 (Form 1 of FADS 2026) and click File Now.

Step 3: Confirm your filing details

Check your PAN, submission mode (Online), and filing type (Original). Click Continue.

Note: If you have already submitted Form 1, the portal will ask you to confirm before filing again. A new submission will replace the earlier one.

Step 4: Start the form

Click Let’s Get Started to begin.

Step 5: Fill in Part A – Basic Information

Check your name, address, and PAN. You can also enter your passport number and upload a copy, if applicable. Click on Save.

Step 6: Complete Part B – Details of Assets or Income

Select the applicable categories:

• Undisclosed foreign assets
• Undisclosed foreign income
• Assets acquired while you were a non-resident
• Assets purchased using income already taxed in India

You can select more than one category. Click Save to continue.

Step 7: Fill out the applicable annexures

Based on your selections in Part B, the portal will enable the relevant annexures. Enter the required details about your foreign assets or income, upload supporting documents where needed, and click Save.

Step 8: Review Parts C and D

Check the summary of your foreign assets and income, their fair market value, and the total amount payable. The portal calculates these amounts based on the details you provide.

Step 9: Complete verification

Open the Verification tab, confirm your details, enter your place of declaration, and click Save.

Step 10: Preview and submit

Once all sections show as Completed, click Preview and check your declaration. Make corrections if needed, then click Proceed to E-Verify.

Step 11: Complete e-Verification

Choose an available verification method and complete the process. The portal will display a success message once your Form 1 is submitted. Keep a copy of your submitted form and acknowledgement for future reference.

Step 12: Receive Form 2

The department issues an order in Form 2 that sets the amount you must pay, generally within one month of the end of the month in which you filed Form 1.

Step 13: Pay the amount

Pay through challan ITNS 289. Payment is due within two months from the end of the month in which you receive the Form 2 order. A further two months are allowed, with interest at 1% per month or part of a month. If you do not pay within these four months, you lose the scheme’s benefits. 

Step 14: File Form 3

Submit Form 3 (intimation of payment) online with proof of payment.

Step 15: Receive Form 4

The department issues Form 4, certifying that your declaration is valid. Your immunity from further tax, penalty, and prosecution under the Black Money Act depends on completing these steps

Should you use FAST-DS 2026?

If you hold a foreign account, shares, RSUs, or property that never made it into Schedule FA, this scheme offers the cheapest and safest way out you are likely to see. If the department has already emailed you about foreign assets, don’t ignore it. Take action as soon as possible. These rules have fine print, so speak to a chartered accountant before you file, and file well before 31 December 2026.

FAST-DS 2026 vs Schedule FA: What is the difference?

Schedule FA and FAST-DS 2026 serve different purposes. Schedule FA is used to report foreign assets in your regular income tax return. On the other hand, FAST-DS 2026 gives eligible taxpayers a one-time opportunity to disclose certain foreign assets or income that they did not report earlier.

Remember: Schedule FA is part of your regular tax filing requirement. FAST-DS 2026 is a one-time scheme to help eligible taxpayers correct certain past foreign asset disclosure omissions.

Source: https://tax2win.in/guide/income-tax-foreign-asset-notice-fast-ds-2026

https://taxguru.in/income-tax/fast-ds-2026-practical-guide-taxpayers-holding-undisclosed-foreign-assets.html

https://www.incometaxindia.gov.in/documents/81799/15520974/FAST-DS-FAQs.pdf