Foreign Assets Disclosure Scheme 2026: Key Rules, Eligibility & Deadline

Updated: 17 August 2026

The Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026. The rules come into force from 16 August 2026, providing eligible taxpayers with a one-time opportunity to regularise certain undisclosed foreign assets and foreign income.

What is the Foreign Assets Disclosure Scheme 2026?

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS 2026) is a one-time compliance window intended to help eligible taxpayers regularise specified foreign assets and foreign-source income that were either not disclosed or, in certain cases, were acquired from explained sources but were omitted from the relevant return disclosures.

The scheme provides prescribed tax or fee-based compliance and, subject to the conditions of the law, immunity from specified tax, penalty and prosecution consequences under the Black Money law.

Who can use the scheme?

Broadly, the scheme is relevant to persons who are or were resident in India during the relevant period and satisfy the prescribed conditions. It can also cover certain persons who are presently non-resident or resident but not ordinarily resident, where the relevant foreign income or asset relates to a period in which they were resident in India.

The scheme has two principal categories:

Category	Broad coverage	Amount payable
Category A	Undisclosed foreign asset and/or undisclosed foreign income, subject to the aggregate ₹1 crore threshold.	30% tax on the relevant value/income plus an additional amount equal to 100% of the tax.
Category B	Specified foreign assets acquired from explained sources but not reported, subject to the ₹5 crore threshold.	Fixed fee of ₹1 lakh, subject to the prescribed conditions.

Category A: Undisclosed Foreign Assets or Foreign Income

This category applies where the aggregate value of an undisclosed foreign asset and undisclosed foreign income does not exceed ₹1 crore, subject to the conditions prescribed under the scheme.

The amount payable broadly consists of:

• Tax at 30% of the value of the undisclosed foreign asset as on 31 March 2026, where applicable;
• Tax at 30% of the undisclosed foreign income, where applicable; and
• An additional amount equal to 100% of the tax determined above.

Accordingly, where the entire relevant amount falls within the tax base, the combined outflow is broadly equivalent to 60% of the relevant undisclosed asset value or foreign income.

Category B: Foreign Assets Acquired from Explained Sources

The second category addresses specified foreign assets where the source of acquisition is explained. It broadly covers situations where the asset was acquired:

• from income that accrued or arose outside India while the taxpayer was non-resident, but the asset was not disclosed after the taxpayer became resident; or
• from income that had already been offered to tax in India, but the foreign asset was not reported in the relevant return.

For this category, the value of the relevant foreign asset must not exceed ₹5 crore, subject to the conditions of the scheme.

The prescribed amount payable is a fixed fee of ₹1 lakh. No separate tax or penalty is payable under the scheme for the qualifying disclosure in this category.

Which Foreign Assets Can Be Covered?

The scheme covers specified assets located outside India, including financial interests in foreign entities. Depending on the facts, this can include:

• Foreign bank accounts and deposits;
• Foreign immovable property;
• Shares and securities, including quoted and unquoted investments;
• Foreign partnership interests and other financial interests;
• Jewellery, bullion and precious stones; and
• Artwork and other specified assets.

How is the Foreign Asset Valued?

The rules prescribe methods for determining the fair market value (FMV) of different categories of foreign assets. The valuation date for the scheme is generally 31 March 2026.

The prescribed methodology varies according to the nature of the asset. For example, different valuation mechanisms apply to bullion and jewellery, artwork, quoted securities, unquoted securities, immovable property and interests in entities.

Therefore, taxpayers should not automatically assume that the original purchase cost will determine the value for scheme purposes. The prescribed FMV rules should be applied separately for each asset.

Filing Process and Deadline

The declaration is required to be made electronically in the prescribed Form 1.

Step	Requirement
1	Identify the eligible foreign assets and/or foreign income and determine the applicable category.
2	Determine the value in accordance with the prescribed valuation rules.
3	File the electronic declaration in Form 1 within the prescribed time.
4	Complete the prescribed payment process and verification requirements.
5	Obtain the prescribed certificate after completion of the process.

What Happens After Filing?

After the declaration is filed, the prescribed verification and payment procedure is followed. The rules provide for the issue of prescribed forms and certification upon completion of the process.

Once the declaration is validly processed and the prescribed amount has been paid, the taxpayer can obtain the benefit of the immunity provided under the scheme, subject to the statutory conditions and exclusions.

Do Not Confuse This Scheme with Routine Foreign Asset Reporting

The scheme is a one-time disclosure mechanism. It does not replace the normal obligation to correctly report foreign assets and foreign-source income in the income-tax return wherever such disclosure is required.

Taxpayers with foreign bank accounts, overseas investments, ESOPs or RSUs, foreign properties or other overseas financial interests should separately review their reporting obligations under the applicable income-tax provisions.

A Separate Relief for Small Non-Disclosure Cases

The Finance Act, 2026 also introduced a separate relaxation concerning prosecution for certain non-disclosures of foreign assets, other than immovable property, where the aggregate value does not exceed ₹20 lakh, with retrospective effect from 1 October 2024, subject to the statutory conditions.

This ₹20 lakh prosecution-related relief should not be confused with the ₹1 crore and ₹5 crore eligibility thresholds under FAST-DS 2026.

Key Takeaways

• The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 provides a one-time opportunity for eligible taxpayers to regularise specified foreign assets and income.
• Category A generally covers undisclosed foreign assets and/or foreign income up to the prescribed aggregate threshold of ₹1 crore.
• Category A involves 30% tax on the relevant amount plus an additional amount equal to 100% of the tax, resulting in a broad 60% outflow where both components apply.
• Category B covers specified foreign assets acquired from explained sources, subject to a ₹5 crore value threshold and prescribed conditions.
• The prescribed fee for Category B is ₹1 lakh.
• The valuation date for the relevant foreign assets is 31 March 2026, with valuation to be determined under the prescribed FMV rules.
• The declaration is to be filed electronically in Form 1.
• The last date for filing the declaration is 31 December 2026.
• The immunity available under the scheme is subject to the prescribed eligibility conditions, exclusions, verification and payment requirements.

This article is for general information and should not be treated as legal or tax advice. Eligibility, valuation, payment and immunity under the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 depend on the specific facts of each taxpayer and the notified provisions. Professional advice should be obtained before filing a declaration.