FAST-DS 2026 Scheme: The CBDT has framed the Rules for Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, also referred to as FAST-DS 2026, to enable eligible taxpayers to take advantage of the time-bound opportunity to make disclosure of certain specified foreign assets, income, and technical disclosures.
Notified on 14th August, 2026 and coming into effect from 16th August, 2026, the scheme lays down different ways for compliance depending upon whether there is any foreign income or asset that is undisclosed and which falls within the category of foreign income/assets where the underlying funds had been previously taxed or such assets were acquired while being non-resident.
What Is the FAST-DS 2026 Scheme?
FAST-DS 2026 is a disclosure regime set up under Section 143 of the Finance Act, 2026, through the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026.
The scheme has been put in place with the objective of offering a specific framework to correct any foreign asset disclosures made by eligible taxpayers. While this scheme understands that every omission need not come from the same situation, there are two main categories of foreign assets.
One where no foreign income or asset was reported at all. Or those assets where the income was received in India or while the person was a non-resident of India, and the foreign asset schedule was not reported correctly.
There is also a provision made in the scheme for different eligibility criteria and payment amounts in the above two situations. It is not an amnesty scheme for all foreign asset violations. It has certain eligibility criteria based on the kind of disclosure and the value of assets held.
Who Can Apply Under FAST-DS 2026?
Two different groups of disclosures are provided under the scheme. Each group has its own qualifying amount and treatment of finances.
Undisclosed Foreign Income and Assets
The first type refers to the specified undisclosed foreign income and assets, which include foreign bank accounts and physical assets that are covered by the scope of the scheme. The total value in respect of this group must not exceed ₹1 crore.
For instance, an individual who has an undisclosed foreign bank account having a value of ₹55 lakh and also disclosed foreign income of ₹25 lakh would have a total amount of ₹80 lakh, provided that both these amounts are considered as eligible to disclose under the scheme.
In such a case, the individual may qualify to be in this group depending upon meeting all the eligibility requirements. If the total value is above ₹1 crore, the individual may not presume that the scheme would still be available for disclosing the part of assets.
Technical Non-Disclosure of Certain Foreign Assets
The second type relates to specific technical non-disclosure cases regarding foreign assets acquired during a non-residency period or from income that has been made available for taxation.
It involves a higher ceiling in the aggregate value of assets of ₹5 crore. For example, there can be a case of a former non-resident having foreign investment which was made using the overseas income which he earned while being abroad. An Indian resident may be in possession of foreign stocks bought using the income which has been made available for tax in India but did not include it in the foreign asset schedule.
If the above-mentioned conditions are fulfilled, then such cases could come under the head of technical non-disclosure. This is critical since the treatment of finances is quite different compared to the first category. One needs to find the source of money, date of acquisition, and residential status, among others before making a choice.
How Are Foreign Assets Valued Under FAST-DS 2026?
The issue of asset valuation becomes a critical aspect in the disclosure process as eligibility is dependent on the prescribed aggregate value. The valuation date under Rule 3 is set as 31st March 2026. The rules prescribe specific methodologies for different categories of assets, including bank accounts, immovable property, jewellery, bullion, and share/Securities.
In case the valuation is not available from the prescribed open market, then the indexed cost of acquisition can be taken as the fair market value. In case of foreign immovable property, the methodology takes into consideration the appropriate acquisition cost and open-market value, and if the need arises, a valuer report can be submitted.
For quoted shares/ securities, the prescribed market price methodology can be used for valuation. For unquoted equity shares, the balance sheet of the company and the prescribed formula can be considered. Foreign Bank Account valuation also follows prescribed provisions which take into consideration deposits made till the valuation date without taking into consideration qualifying amounts reinvested in other assets.
How to File a FAST-DS 2026 Declaration
This procedure is done electronically and involves four forms that play different roles, from the declaration to the issuance of the certificate showing validity and immunity.
Form 1: Declaration of Foreign Assets
Form 1 is supposed to be filed before December 31, 2026, based on the required filing provisions. This form contains the appropriate foreign assets or income of the taxpayer, together with the records used to acquire them, and also valuation evidence for those who need it.
It should be filed using the prescribed electronic authentication method such as Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
This form requires accuracy in order to avoid mistakes in categorisation and provision of wrong or inadequate details that will lead to non-compliance with the eligibility criteria of the form.
Form 2: Determination of the Amount Payable
After the declaration form is filled out, Form 2 containing the amount payable is issued by the prescribed tax authority depending on the required category.
This amount can either include tax and penalties under the first category or the prescribed fee under the second category. Taxpayers should consider the order of events when computing the payment due date.
Form 3: Notice of Payment
After making payment of the requisite sum, Form 3 is submitted with the required details regarding the payment and the challan particulars.
An initial payment period and an additional period of payment with interest are provided under the rules. Overdue payment beyond the permissible payment period will render the declaration void.
Form 4: Certificate of Validity and Immunity
On satisfying the required conditions and verifying the declaration, the tax administration issues the certificate of Form 4. This certificate certifies that the declaration is valid and the entitlements as provided in the scheme are availed of. It is advisable for taxpayers to keep the certificate for future reference.
Tax Rates, Penalties and Fees Under FAST-DS 2026
The financial implications depend on the category under which the declaration is accepted.
| Particulars | Category 1 | Category 2 |
|---|---|---|
| Coverage | Specified undisclosed foreign income and assets | Eligible technical non-disclosure |
| Aggregate value ceiling | ₹1 crore | ₹5 crore |
| Tax | 30% of declared aggregate fair market value | Nil under the scheme |
| Penalty | 100% of the tax payable | Nil under the scheme |
| Prescribed fee | Nil | ₹1 lakh |
| Total specified outgo | 60% of aggregate declared value | ₹1 lakh |
For instance, if foreign assets and income worth ₹80 lakh fall within the ambit of Category 1, the tax would amount to ₹24 lakh, and the fine would come to ₹24 lakh, totalling ₹48 lakh.
On the other hand, a valid Category 2 declaration might simply attract a flat charge of ₹1 lakh, depending on the prevailing conditions. The above computations make clear the importance of categorisation. The taxpayer cannot select the category only because it provides for a lower payment.
Payment Deadlines and Interest for Delayed Payments
The payment schedule in FAST-DS 2026 is tied to the receipt of Form 2. Initially, the period for making payments stretches up to two months after the end of the month when the order was received. Additional time for two months is granted, but payments made later will accrue interest at 1% per month or a part thereof on the balance. In case the required payments are not made during the maximum possible four-month period, then the declaration will lose its legal force according to the provisions.
For instance, in case Form 2 is received on September 22, 2026, the first payment deadline is November 30, 2026. Payments made in December will incur interest, and not completing the payment within the maximum possible period will cause loss of advantages from the scheme. It is important for taxpayers to make calculations according to their own receipt date and the provisions of statute law.
Immunity Benefits Available After Successful Compliance
One of the key aspects in this scheme is the protection provided after declaration, payment, and verification. After compliance, Form 4 offers the statutory protections provided for under the scheme, which include protection of the declaration for income tax return purposes and protection against certain additional taxes or penalties relating to the declared income or asset.
The scheme also provides protection from prosecution for offences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, subject to the relevant statutory conditions.
These protections are subject to certain conditions. Filing of Form 1 is not enough to give full protection. The taxpayer has to comply with the other requirements of the scheme. This scheme has to be understood in the context of the law. Protection offered by the scheme does not give automatic protection against other tax offences or those issues outside of the scheme.
What Taxpayers and Tax Professionals Should Do Before December 31, 2026
The time constraint makes the early analysis necessary for the taxpayers who could be having the problem of disclosure of foreign assets. Tax experts are supposed to locate those individuals who qualify, check their sources and dates of acquisition of the foreign assets, aggregate the value and then see if the information qualifies them for Category 1 or Category 2.
They are expected to check whether the concerned foreign assets were acquired from income that was previously taxed or when they were not resident in India. Bank statements, purchase documentation, foreign tax information and past income tax returns will assist in reaching a conclusion. The valuation report and the foreign currency exchange should be done according to the prescribed method. Once the declaration has been made, it becomes important to track the second step payment date through Form 2.