Global Mobility Tax

India | Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026: Rules, forms and FAQs notified

Summary

As part of the Union Budget 2026, the Finance Minister announced a one-time foreign asset disclosure initiative to encourage voluntary compliance and provide eligible taxpayers with an opportunity to regularize past non-disclosures relating to foreign assets and foreign income.

Pursuant to this announcement, the Central Board of Direct Taxes (CBDT) has now notified the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS or the Scheme), on 14 August 2026. The FAST-DS provides a compliance window for eligible taxpayers to voluntarily disclose foreign assets and foreign income which were not previously reported, subject to the specified thresholds and payment of additional taxes. The scheme is effective from 16 August 2026 and the benefit of the disclosure window can be availed up to 31 December 2026.

The CBDT has also issued a detailed set of Frequently Asked Questions (FAQs) to provide guidance on the scope, eligibility conditions, valuation methodology, filing procedures and benefits available under the FAST-DS.

The detail

Eligibility

The FAST-DS is available to individuals who were Resident in India in the relevant previous year and to individuals who are currently Non-Residents or Resident but Not Ordinarily Resident, but were Resident in India in the previous year when the undisclosed foreign income was earned or when the undisclosed foreign asset was acquired. Such individuals can make a declaration where:

• an income tax return was not filed,
• the foreign asset or foreign income was not disclosed in a return filed before the commencement of the FAST-DS, or
• the foreign asset or foreign income escaped assessment.

This FAST-DS is not available for:

• Foreign income or assets linked to proceeds of crime where proceedings are pending or have been initiated under the Prevention of Money-laundering Act, 2002.
• Foreign income or assets have already been assessed under the Black Money Act, 2015 (BMA).

Categories of declaration

Particulars	Undisclosed foreign assets/ income	Undeclared foreign assets
Type of asset	Undisclosed asset located outside India:   An asset located outside India, held directly or beneficially by an individual, for which the source of investment cannot be satisfactorily explained.   Undisclosed foreign income:   Income derived from a source outside India that was taxable in India but was not reported for tax purposes.	An asset located outside India, which was already offered to tax or was acquired when an individual was a non-resident, but not declared in the foreign asset schedule of the return, upon becoming a resident.
Threshold	Aggregate value of the undisclosed asset located outside India and the undisclosed foreign income should not exceed INR 1 crore (INR 10M).	Aggregate value of the assets located outside India should not exceed INR 5 crore (INR 50M).
Amount payable	Aggregate of: i.    Tax at 30% of the value of the undisclosed asset located outside India as on 31 March 2026; ii.   Tax at 30% of the undisclosed foreign income; and iii.  An amount equal to 100% of the tax determined above.	Flat fee of INR 100,000 (INR 0.1M).

The Scheme distinguishes non-disclosure from reporting omissions: undisclosed foreign assets or income upto INR 1 crore (INR 10M) may attract 30% tax plus an equivalent additional amount, while undeclared foreign assets upto INR 5 crore (INR 50M) may be regularized for a payment of INR 100,000 (INR 0.1M).

Valuation methodologies for foreign assets

The Scheme prescribes asset-specific valuation methodologies, with valuation required as on 31 March 2026. For several assets class, including bullion, jewellery, artistic works, immovable property, unquoted shares and other assets, the fair market value is determined as the higher of the cost of acquisition and the open-market value on the valuation date. Where an open-market valuation is not carried out, the indexed cost of acquisition is deemed to be the fair market value, where prescribed. The value of a foreign bank account is determined based on the aggregate deposits made from the date of opening of the account up to the valuation date subject to certain exclusions to prevent double counting like redeposits of amount withdrawn from the same account are excluded etc.

Forms and timelines

Stage	Form No.	Action	Timeline
Declaration (by individual)	Form 1	Declaration to be filed electronically with the Tax Authority.   A single declaration may cover multiple assets and/or income streams.   Supporting documents evidencing acquisition of the asset or earning of the income, along with a valuation report (as applicable), must be furnished.	To be filed between 16 August 2026 and 31 December 2026.
Order (by Tax Authority)	Form 2	The Tax Authority will electronically communicate the amount payable under the Scheme.	Within one month from the end of the month in which the declaration in Form 1 was made.
Intimation of payment (by individual)	Form 3	Payment is to be reported by furnishing an intimation of payment, along with proof of payment, electronically.	Initial payment deadline: 2 months from the end of the month in which Form 2 order is received. Extension: A further period of up to 2 months is permitted, with simple interest at 1% per month or part thereof on the amount due. If payment is not made within 4 months from the end of the month in which Form 2 order was passed, Scheme benefit ceases for that declaration.
Stage	Form No.	Action	Timeline
Order certifying payment (by Tax Authority)	Form 4	The Tax Authority will certify the validity of the declaration and payment made under the Scheme.	Within one month from the end of the month of the submission of Form 3 electronically.

Key benefits and limitations

Key benefits

• Immunity from further tax, penalty and prosecution under the BMA.
• Declared income and investments are excluded from total income under the Income tax Act and the BMA.
• Pending assessments must take the declaration into account.

Limitations

• No refund, deduction, set-off or other tax benefit is available in respect of amounts declared under the FAST-DS.
• Completed assessments cannot be revised or rectified on account of the declaration.
• No relief can be sought in existing appeals or proceedings relating to previously completed assessments.

Key takeaway

The introduction of FAST-DS reflects the Tax authority continued focus on foreign asset and foreign income reporting, since the introduction of the BMA and measures such as the CBDT’s NUDGE campaigns. This is backed by continuous flow of global financial information using technology which is also made available to the taxpayers. As information exchange mechanisms and data analytics capabilities continue to expand, taxpayers with gaps in foreign asset or foreign income reporting may face increased scrutiny.

In this context, FAST-DS provides a limited, one-time opportunity for eligible taxpayers to come out clean on historical non-compliance relating to foreign assets and foreign income through a structured disclosure mechanism. In addition to providing certainty on past exposures, the Scheme offers immunity from further tax, penalty and prosecution under the Black Money Act, subject to satisfaction of the prescribed conditions.

Given the relatively short compliance window ending on 31 December 2026, taxpayers should promptly undertake a review of their foreign asset and foreign income reporting position, assess eligibility under the Scheme, and evaluate the documentation and valuation requirements necessary to support a declaration. The Scheme may provide a valuable opportunity for taxpayers who have worked or invested overseas and hold foreign bank accounts, investments, pension arrangements, foreign equity, or other foreign assets that may not have been fully reported in India, or where related foreign income has not been offered to tax. Eligible taxpayers should consider using this one-time window to regularize such omissions, subject to a careful review of the relevant facts and appropriate reconciliation of the available information.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Ishita Sengupta
India Lead

Sundeep Agarwal
Partner

Ravi Jain
Partner

Anand Dhelia
Partner

Chander Talreja
Partner

Hitesh Sharma
Partner

Nishant Kumar
Partner

Sebin Jinny
Immigration Lead

Want to know when a regional alert is posted?

Simply follow our Vialto Alerts page on LinkedIn and posts will be displayed on your feed. To ensure you don’t miss one, once you’re on our LinkedIn page, click on the bell icon under the banner image to manage your notifications.

Further information on Vialto can be found here: www.vialtopartners.com

Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.

© 2026 Vialto Partners. All rights reserved.