The Income Tax Department has notified Form 1 under Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS 2026) to declare undisclosed foreign income or assets and provide the valuation. It has to be filed electronically by December 31, 2026 through the income tax e-filing portal.
The Form 1 comprises four parts: Part A for the basic information of the assessee; Part B for details of foreign assets and incomes; Part C for the valuation summary of immovable property, jewellery, artistic work, securities, etc (as on March 31, 2026) and Part D for the amount payable.
The I-T department will then issue Form 2 which will determine the amount payable. The assessee will have to pay this within two months or within four months along with interest for two months from the end of the month in which Form 2 was issued. The taxpayer then has to file Form 3 with the payment details, following which it will issue Form 4 as the final order certifying the validity of the declaration and payment.
Convenient route
FAST-DS 2026 offers an easier route for regularising unreported foreign income and assets compared with earlier disclosure schemes and the Black Money Act (BMA). Under the BMA, 30% tax plus penalty up to 300% of tax, along with a separate `10 lakh penalty for failure to disclose foreign assets / inaccurate particulars, may apply. Under FAST-DS 2026, an effective levy of 60% under Category 1 cases — undisclosed foreign income and undisclosed foreign assets up to Rs 1 crore — and a fee of Rs 1 lakh for Category 2 cases —assets up to Rs 5 crore which were acquired from income which was offered to tax in India applies.
“The voluntary disclosure will provide immunity from further tax, penalty and prosecution under the BMA and Income-tax Act, 2025 offering taxpayers greater certainty and a controlled exit from potential BMA or I-T Act exposure,” says Abheet Sachdeva, partner, Nangia Global.
Residential status
The FAST-DS is not restricted only to individuals who are currently resident in India. A person who was resident in India during the relevant period can use the scheme even if he is currently a non-resident or falls in the ‘Resident but Not Ordinarily Resident’ category.
Manish Garg, partner, Tax, AKM Global, a tax and consulting firm, says this is particularly relevant for returning Indians who accumulated foreign bank accounts, investments, employees stock option plans, restricted stock units or insurance policies during their stay abroad. “Compared with the original black money disclosure window, FAST-DS provides a fresh, targeted opportunity for smaller and often inadvertent historical omissions, with a relatively calibrated tax/fee structure and immunity from specified Black Money Act consequences,” he says.
Receiving a notice or inquiry does not by itself make a taxpayer ineligible for FAST-DS 2026. If assessment proceedings under the I-T Act or the BMA are pending in respect of the undisclosed income or asset, the taxpayer can make a declaration under FAST-DS 2026, and the Assessing Officer is required to take the declaration into account while finalising the assessment under BMA or I-T Act.
However, it cannot be used where the assessment proceedings for the relevant year have been completed under the BMA. It also does not apply to income or assets representing proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-Laundering Act. Taxpayers who have received notices should review the status of the proceedings and consider making a FAST-DS declaration rather than assuming that the ongoing proceedings disqualify them.
Please click here to view the full story on Financial Express.