Undisclosed Foreign Assets: What FAST-DS 2026 Means for Indian Taxpayers.

Most often we see now clients have something in forms of assets / investments sitting abroad. RSUs from a employer. A brokerage account opened during a posting in US or London or Dubai. A flat bought while working overseas. Mutual funds bought through the Liberalised Remittance Scheme. None of it is against the law. A resident Indian can send up to USD 250,000 abroad every financial year under LRS and put it into shares, ETFs, bonds, property, even a trust, without RBI signing off each time. Owning the asset was never the issue. Staying quiet about it is. While many people have procured these kinds of investments when they were outside India, people generally tend to forget or are not aware of disclosing the same when they become residents again in India.

In the case of a resident in India, income tax laws appreciate individuals holding foreign assets; however it equally and simultaneously expects the taxpayer to disclose the assets as well as the income that they earn on these assets in India.

What the Law Already Requires

If you're Resident and Ordinarily Resident, every foreign asset and every rupee of foreign income goes into Schedule FA of your ITR-2 or ITR-3, whether or not it ever earned a rupee, and whether or not your income crosses the taxable slab. A dormant account with nothing in it still has to be reported. Skip it, and the Black Money (Undisclosed Foreign Income and Assets) Act, 2015 allows a penalty running up to Rs. 10 lakh for that year alone, plus prosecution, regardless of whether the income was ever taxable in India.

That's the part that's kept clients up at night for years. Budget 2026 finally does something about it.

Budget 2026: Prosecution Risk Removed for Small Holdings

Sections 49 and 50 of the Black Money Act have been amended. Prosecution no longer applies to foreign shares, ETFs, mutual funds, bank balances or brokerage accounts, as long as the aggregate stays under Rs. 20 lakh. An old ESOP account sitting at Rs. 8 lakh? No criminal exposure anymore.

One catch worth remembering: foreign immovable property, residential, commercial, land, whatever it is, gets none of this relief. Not at any value. If you have any property or investments overseas that have a value of more than 20 lakhs, it is better to disclose that in the ITR rather than face harsh notices from the officials.

We should not feel that the government is not going to understand what kind of assets we procure. Government intelligence is much more far-reaching than we can even imagine. If the government wants, they can pull out all the data that they need for us.

FAST-DS 2026: A One-time Window to Fix Past Lapses

The government has also opened a separate scheme alongside this relief, the Foreign Assets of Small Taxpayers Disclosure Scheme FAST-DS, 2026. It's a one-time voluntary window, open from 16 August to 31 December 2026, with everything valued as on 31 March 2026. Residents can use it. So can non-residents and RNORs, provided they were resident in India either in the year the asset was bought or the year the income came in, which matters for anyone who left the country and never got around to sorting out an old account.

Two tracks exist here, and the price difference between them is enormous.

Track one covers money that was never taxed anywhere, up to a combined Rs. 1 crore. That costs 30% tax plus an equal amount again as a levy, 60% total. Say someone is sitting on a Rs. 60 lakh foreign account and Rs. 20 lakh of income nobody declared. That works out to Rs. 48 lakh payable.

Track two is different. If the asset was already taxed, or bought before the person became a resident, and it simply never made it into Schedule FA, the fix is a flat Rs. 1 lakh, as long as the aggregate value stays under Rs. 5 crore. This is the track most returning NRIs and ESOP holders will fall into. They didn't hide anything. They just didn't know the form existed.

A valid declaration under either track brings immunity from further tax, penalty and prosecution, and the assessing officer can't reopen that year on this ground afterward. Payment is due within two months of the demand, with a further two months available at 1% monthly interest if needed.

If you miss that four-month window and the benefit is gone.

Point of Highlight and mention that these two categories fall outside the scheme altogether: assets tied to proceeds of crime under PMLA, and years where a Black Money Act assessment has already wrapped up. And 31 December 2026 really is the last date. There is no talk of an extension.

Why this Cannot Wait

India now shares financial account data with more than 100 countries through CRS, FATCA and the automatic exchange framework. Your foreign bank account. Your US brokerage statement. Your dividend credits. The department already has most of this without you filing anything, and it is actively cross-checking that data against ITRs, sending out queries wherever the numbers don't match. Waiting isn't a safe default anymore. It's a bet that nothing surfaces before December.

None of this is a reason to panic. Owning assets abroad is completely ordinary, and for most people the gap is a paperwork oversight, not concealment, which is exactly what the Rs. 1 lakh track exists for. What it does need is a proper look before the window closes. If you, or anyone in your family, has held a foreign account, ESOPs or property at any point and you're not sure it made it into Schedule FA, bring us the details before December. Checking is a conversation. Not checking, after 31 December, is a cost.

FAQs

Who is eligible for FAST-DS 2026?

A person who is or was a resident of India during the relevant period is eligible. Also if a person who is a non-resident or a resident but not Ordinarily Resident (RNOR) may also be eligible.

What foreign assets can be disclosed under FAST-DS 2026?

The scheme can cover undisclosed assets, including financial interests and assets such as foreign bank accounts, securities, shares, and more. To know more from professional experts, reach us at enquire@kdpaccountants.com.

What is the deadline to file FAST-DS 2026 declaration?

The one-time voluntary window opens on 16th August 2026, and the due date to file is 31st December 2026.

Can returning NRIs use FAST-DS 2026?

Yes, A person who is currently a non-resident may be eligible if they were a resident in India during the relevant year.

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A young and dynamic professional associated with KDP since 2014. After his internship and qualification, he continued to be a part of KDP exploring and specialising in the areas of Private & Charitable Trust Taxation, Estate Planning, Auditing and Corporate and Non Corporate Taxation including representation before tax authorities. He is a core member of the Direct Taxation Department. He is also involved in income tax return filing and other services for our NRI clients.