The Foreign Asset Disclosure Scheme (FAST–DS), 2026 This one-time, six-month scheme is specifically designed to address practical compliance issues fa
The Foreign Asset Disclosure Scheme (FAST–DS), 2026
This one-time, six-month scheme is specifically designed to address practical compliance issues faced by small taxpayers, including students, young professionals, tech employees, and relocated NRIs. It provides a window for these individuals to disclose overseas income or assets below certain thresholds to avoid severe legal consequences.
The scheme is divided into two distinct categories:
- Category (A): For taxpayers who did not disclose their overseas income or assets.
- Threshold: Undisclosed amounts up to ₹1 crore.
- Cost: Taxpayers must pay 30% of the Fair Market Value (FMV) of the asset or the undisclosed income as tax, plus an additional 30% income tax instead of a penalty.
- Benefit: In exchange, they receive immunity from prosecution.
- Category (B): For taxpayers who disclosed their income and paid due tax but failed to declare the specific asset acquired.
- Threshold: Asset value up to ₹5 crore.
- Cost: A flat fee of ₹1 lakh.
- Benefit: Immunity from both penalty and prosecution.
The Larger Context of Direct Tax
In the wider context of the new direct tax regime, FAST–DS serves as a bridge between strict enforcement and the government's goal of "Ease of Living".
- Decriminalisation and Rationalisation: The scheme aligns with a broader push to rationalise prosecution. The government is moving towards decriminalising technical defaults (such as non-production of books) and reducing maximum imprisonment for most offences to two years. FAST–DS offers a similar "clean slate" for small-scale foreign asset discrepancies.
- Alignment with the Black Money Act: The Budget indicate a parallel move to provide retrospective immunity (from 1 October 2024) from prosecution under the Black Money Act for non-disclosure of non-immovable foreign assets valued at less than ₹20 lakh. This suggests a systematic effort to reduce the litigation burden on smaller taxpayers.
- Simplified Compliance under the 2025 Act: The FAST–DS is part of the transition to the Income Tax Act, 2025, which aims to provide redesigned forms and rules that allow ordinary citizens to comply without difficulty. By resolving past non-disclosures through this scheme, taxpayers can migrate to the new, simplified regime with certainty.
- Support for Global Mobility: As India seeks to attract stable long-term investment and integrate with global markets, providing tax certainty to relocated NRIs and global experts is critical. Other related measures include a five-year tax exemption on global income for non-resident experts staying in India under notified schemes.
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