Small Taxpayers With€™ Foreign Assets To Face 30% Tax Plus Penalty; Disclosure Scheme Opens Till Dec 31

The Income Tax department on Saturday said the declarations under the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) can be filed till December 31, 2026, and the taxpayers will face a 30% tax plus an additional levy of a similar amount.

The scheme for voluntary disclosure of foreign asset for small taxpayers like students, young professionals, tech employees, and relocated NRIs was announced in the 2026-27 Budget.

Notifying the rules for the scheme on Saturday, the Central Board of Direct Taxes (CBDT) said the scheme "enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee". The scheme comes into effect from August 16 and online declarations can be filed till December 31, 2026.

The fair market value of assets proposed to be declared is to be computed as on March 31, 2026.

There are two broad categories for filing a declaration under the scheme.

First, an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax. The aggregate value of the undisclosed asset in this case should not exceed ₹1 crore.

Second, for the 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 return, the monetary threshold of ₹5 crore has been set for such declarations. A fee of ₹1 lakh would be levied on such declarations.

The total amount payable would be the aggregate of - (i) tax of 30% of the value of the undisclosed foreign asset or income declared; and (ii) amount equal to the tax paid.

Giving an example, the CBDT, in an FAQ, said where an undisclosed foreign bank account is valued at ₹60 lakh and undisclosed foreign income is ₹20 lakh, the aggregate tax payable would be ₹48 lakh.

Declarations under the scheme will also give immunity to the assessee from the levy of any further tax or penalty, and from prosecution, under the Black Money Act, 2015, in respect of the income or asset so declared.

Further, the income or amount of investment in the asset declared under this scheme shall not be included in the total income of the taxpayer under the Income-tax Act, 1961 or the Black Money Act, 2015.