Foreign assets disclosure scheme 2026: Key FAQs on who can apply, what you can declare and how to file

The Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS) Rules, 2026, a one-time voluntary disclosure scheme for eligible taxpayers with certain undisclosed foreign assets or income.

CBDT has also issued detailed FAQs to explain the scheme and its rules. Here are the key questions taxpayers may have.

What is the foreign assets disclosure scheme 2026?

It is a one-time voluntary disclosure scheme that allows eligible taxpayers to declare specified undisclosed foreign assets or income that were not reported in income tax returns.

When can you file a declaration?

You can file a declaration from 16 August to 31 December 2026. The valuation date is 31 March 2026, and the asset’s fair market value (FMV) must be calculated as on this date.

FMV is the higher of the asset’s purchase cost or its open-market price on 31 March. If market valuation is not available, the indexed cost of acquisition is treated as the FMV.

Who can use the scheme?

You can use the scheme if you were a resident of India in the relevant previous year. Even if you are currently a non-resident or RNOR, you can qualify if you were a resident of India in the year when the undisclosed foreign income was earned, or the foreign asset was acquired.

When can you make a declaration?

You can make a declaration if you:

• did not file a return under Section 139 of the Income Tax Act, 1961;
• filed a return but did not disclose the relevant foreign asset or income; or
• have income or an asset that has escaped assessment under Section 147.

What can you declare and how much do you have to pay?

You can make a declaration for any previous year, subject to the conditions and limits under Section 133.

1. Undisclosed foreign assets or income: You can declare a foreign asset whose source of investment was not explained or was considered unsatisfactory by the Assessing Officer. You can also declare foreign income taxable in India but not reported. The combined value must not exceed ₹1 crore.
   
   You need to pay 30% tax plus an additional 100% of the tax, effectively 60%. For example, on ₹80 lakh, the total payable is ₹48 lakh.
2. Foreign assets not reported in your return: You can declare assets acquired while you were a non-resident or from income already offered to tax but not reported in the ITR. The aggregate value must not exceed ₹5 crore.
   
   You need to pay a flat fee of ₹1 lakh. If the value exceeds ₹5 crore, you cannot use the scheme.

How do you file the declaration?

You have to electronically file Form 1. Multiple assets or income items can be included in the same form. You must upload documents supporting the acquisition of the asset or earning of the income.

A valuation report is also required wherever a valuation is carried out, such as for immovable property, jewellery, artwork, unquoted shares, or other assets.

What happens after Form 1 is filed?

After electronic verification, the income tax authority will issue Form 2 specifying the amount payable within one month from the end of the month in which the declaration was made.

You have two months from the end of the month in which the order is received to make the payment.

If you cannot pay within this period, a further period of up to two months is available, with simple interest of 1% for every month or part of a month of delay.

The maximum additional period is four months from the end of the month in which the original Form 2 order was passed. If payment is not made within the permitted period, the benefit of the scheme ceases.

After payment, file Form 3 with proof of payment. The authority will issue Form 4 within one month from the end of the month in which Form 3 is received.

When does the scheme not apply?

The scheme does not cover proceeds of crime under pending PMLA proceedings or income/assets for an assessment year where proceedings have been completed under the Black Money Act, 2015.

Disclaimer: This is meant for informational purposes only. Please refer to the official website or consult a qualified tax professional.