Have undisclosed foreign assets worth ₹1 cr? Here's when you pay ₹60L and ₹1L in tax under FAST-DS scheme

The Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS), recently notified by the income tax department, has given eligible taxpayers a one-time window to disclose foreign assets and income that they either failed to report or did not disclose in the relevant schedule while filing their income tax return.

The one-time disclosure window came into effect from August 16 and remains open for declarations until December 31, 2026. It is meant for small taxpayers such as students, young professionals, and relocated non-Indian residents.

However, those opting for the scheme are required to pay an additional levy, with the amount depending on the category under which the asset falls. This is where confusion may arise, because each category has different financial implications.

What are the declaration categories?

There are two broad categories of declaration under the FAST-DS scheme:

• Undisclosed asset located outside India: This category refers to an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax.
• Undisclosed foreign income: It refers to an asset located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant schedule of the ITR.

For the first category, the fair market value of the assets proposed to be declared under the scheme will be calculated as of March 31, 2026.

When ₹1 cr undisclosed FA means ₹60L penalty

In cases, where an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax by the taxpayer, the penalty payable will be the aggregate of two components that include tax at 30% of the value of the undisclosed asset or income, and an additional amount equal to the entire value of that tax. In effect, the total outgo is around 60% of the declared value.

The aggregate value of such assets and income must not exceed ₹1 crore, according to the income tax department.

For example, if an undisclosed foreign bank account is valued at ₹60 lakh and the undisclosed foreign income is worth ₹20 lakh, the aggregate tax payable would be ₹48 lakh, according to CBDT's FAQ section.

Similarly, if you have ₹1 crore in undisclosed foreign assets, the tax at 30% would be ₹30 lakh. An additional amount equal to 100% of this tax, which is another ₹30 lakh, would also be payable. This takes the total amount payable to ₹60 lakh, or 60% of the asset's declared value.

When ₹1 cr undisclosed FA means ₹1L penalty

The second category is where the penalty is substantially less. It covers assets located outside India, which was already offered to tax or was acquired when the assesse was a non-resident, but they did not declare in the relevant schedule of the income tax return.

For this category, the monetary threshold is significantly higher. The aggregate value of the foreign assets must not exceed ₹5 crore. In this case, the amount payable is a flat fee of ₹1 lakh.

For example, suppose a taxpayer purchased shares of a foreign company while they were a non-resident, using funds that were already taxed in India. If the shares are worth ₹2.5 crore, they could be regularised by paying the applicable ₹1 lakh fee, subject to the scheme's conditions.

However, if the same shares were acquired using funds that was never offered to tax, it falls under Category 1, and the penalty jumps to 60%.