Foreign Assets You Never Declared —the FAST-DS Window Closes 31 December 2026

A salaried professional who worked in Dubai for four years and kept the bank account open. An engineer holding vested shares in a US parent. A family that inherited a small flat abroad. In each case the money may be entirely legitimate — and in each case the asset may never have reached the relevant schedule of an Indian income-tax return. Until now, the only route out of that omission ran through the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, with its assessment, penalty and prosecution machinery.

Chapter IV of the Finance Act, 2026 has opened a different door, for a limited time. Sections 130 to 144 enact the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 — FAST-DS. The CBDT notified the scheme rules and prescribed forms by Notification No. 114/2026 dated 14 August 2026 (G.S.R. 732(E)) under section 143 of that Act; the rules came into force on 16 August 2026, and the notified last date for a declaration is 31 December 2026.

Who the Scheme is addressed to

Section 131(1)(a) defines the "assessee" in two limbs. The first is a person resident in India within the meaning of section 6 of the Income-tax Act, 1961 in the previous year. The second reaches a person now non-resident or not ordinarily resident who was resident in India either in the previous year to which the foreign income relates, or in the previous year in which the undisclosed foreign asset was acquired — so a returning NRI and a person who has since moved abroad are both within contemplation.

Section 132 sets out three situations in which a declaration may be made for any previous year: where the person failed to furnish a return under section 139 of the 1961 Act; where he failed to disclose the asset or income in a return furnished before the Scheme commenced; or where it has escaped assessment within the meaning of section 147.

Section 131 supplies the two operative definitions: an "undisclosed asset located outside India" (including a financial interest in any entity, held in one's own name or beneficially, where the source of investment is unexplained) and "undisclosed foreign income" (income from a source outside India, chargeable to tax in India, never offered to tax).

The two routes — and why the difference matters

Section 133 contains a table with two entries, and the gap between them is the single most important commercial fact in the Scheme.

Entry 1 — the undisclosed asset or income. Where the declaration covers an undisclosed foreign asset or undisclosed foreign income, the amount payable is tax at 30% of the value of the asset as on 31 March 2026, plus tax at 30% of the undisclosed foreign income, plus a further amount equal to 100% of that tax. In plain arithmetic, roughly 60% of the declared value. The condition attached is that the aggregate value of the undisclosed asset and the undisclosed foreign income does not exceed ₹1 crore.

Entry 2 — the reporting failure. This covers a foreign asset acquired out of income accruing or arising outside India while the person was a non-resident and not declared in the relevant schedule of the return on becoming resident; and a foreign asset acquired out of income that was offered to tax under the 1961 Act but likewise never declared in that schedule. For these, the amount payable is a fee of ₹1 lakh, provided the value of the asset does not exceed ₹5 crore.

Entry 2 is aimed at the taxpayer whose money was clean and whose tax was paid, but whose schedule was left blank. Which entry a file falls into turns on evidence — residential status in the year of acquisition, the source of the funds, and whether the income was in fact offered to tax. Only the declaration itself carries the hard date of 31 December 2026; assembling that evidence is what takes time.

The difference between a ₹1 lakh fee and roughly sixty per cent of the asset's value is not a matter of drafting. It is a matter of proof.

What a valid declaration buys — and what it does not

Section 139 grants a declarant who makes a valid declaration and pays the amount due immunity from any further tax or penalty, and from prosecution, under the Black Money Act, in respect of the income or asset declared, for the previous year ending 31 March 2026 or any earlier previous year. Section 136 keeps the declared income or investment out of total income under both the 1961 Act and the Black Money Act, provided payment is made within the extended period allowed by section 135(3). Section 141 requires an Assessing Officer with a pending assessment under either Act to take the declaration into account while finalising it.

The limits are equally express. Section 137 bars any claim for rectification or revision of a completed assessment, and any set-off or relief in an appeal relating to it. Section 138 makes every amount paid non-refundable. Section 140 puts two categories outside the Scheme altogether: income or assets representing, directly or indirectly, proceeds of crime in respect of which proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; and income or assets relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act. And because section 139 is written by reference to the Black Money Act, it does not on its own terms resolve exposure under other statutes such as the foreign exchange laws, which must be assessed separately.

Section 134(3) adds a sharp edge: a declaration is deemed invalid if any material particular is found to be false at any stage, or if the declarant violates any condition of the Scheme. A declaration filed carelessly, or one that discloses part of a holding and leaves the rest out, is worse than useless — the payment is not refundable and the protection is gone.

The sequence once you file

Why the file may already be open

This window has not appeared in a vacuum. On 20 July 2026 the Income-tax Department began allowing taxpayers to view foreign asset information in the Annual Information Statement, drawn from the automatic exchange of financial account information between tax administrations. A person who opens the AIS and finds an overseas account listed there is reading the same record the Department is.

One point of vocabulary, because it is a common source of confusion this year: the Income-tax Act, 2025 governs matters from tax year 2026-27 onward, while returns for FY 2025-26 / AY 2026-27 remain governed by the Income-tax Act, 1961 — and the FAST-DS provisions themselves speak in terms of sections 139 and 147 of the 1961 Act. The two regimes should not be run together when reconstructing which return ought to have carried the disclosure.

The decision, stated plainly

FAST-DS is not an amnesty for every foreign holding, and it is not free. It is a time-limited route with a fixed price, a fixed procedure and a statutory immunity — closed to proceeds of crime and to years already assessed under the Black Money Act. Where the omission was a reporting failure, Entry 2 is a proportionate way to close the file; where the asset is genuinely undisclosed, Entry 1 must be weighed against what a Black Money Act assessment would involve. Either way, the analysis belongs before 31 December 2026.