Government rolls out foreign asset disclosure scheme for small taxpayers

The Income Tax Department on Saturday (August 15, 2026) notified a new voluntary disclosure scheme allowing small taxpayers to declare certain undisclosed foreign assets and income by paying an effective 60% tax, as the government seeks to bring overseas holdings into the tax net without exposing eligible taxpayers to further penalties or prosecution.

The Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS), announced in the 2026-27 Budget, will take effect from Sunday (August 16, 2026), with online declarations open until December 31, 2026, the Central Board of Direct Taxes (CBDT) said.

The scheme is aimed at taxpayers such as students, young professionals, technology employees and relocated non-resident Indians who may have failed to disclose eligible foreign assets or income.

Under the rules, taxpayers will pay a 30% tax on the value of the declared undisclosed foreign asset or income, plus an additional amount equal to the tax, effectively taking the levy to 60%.

The fair market value of the assets will be determined as of March 31, 2026, the CBDT said.

There are two categories of declarations under FAST-DS.

For an undisclosed foreign asset or foreign income that was not previously offered to tax, the aggregate value must not exceed ₹1 crore.

A second category covers foreign assets that were already offered to tax or acquired when the taxpayer was a non-resident but were not reported in the relevant tax-return schedule. The threshold for such declarations is ₹5 crore, with a ₹1 lakh fee payable.

The CBDT said the scheme is intended to enable eligible taxpayers to disclose “certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets” on payment of the specified tax or fee.

For example, where an undisclosed foreign bank account is valued at ₹60 lakh and undisclosed foreign income amounts to ₹20 lakh, the total tax payable would be ₹48 lakh, according to an example in the CBDT’s frequently asked questions.

Taxpayers making valid declarations will receive immunity from any further tax or penalty and from prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in respect of the assets or income disclosed.

The declared income or the amount invested in the disclosed asset will also not be included in the taxpayer’s total income under the Income-tax Act, 1961 or the Black Money Act, the CBDT said.