The Government has proposed the Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026 (FAST-DS 2026) under the Finance Bill, 2026. The scheme aims to encourage voluntary compliance under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, while offering limited immunity from penalty and prosecution.
Background: Black Money Act, 2015 and Earlier Compliance Window
The Black Money Act was enacted in 2015 to tackle the problem of undisclosed foreign income and assets held by Indian resident taxpayers. At the time of its introduction, the government provided a one-time compliance window from 1 July 2015 to 30 September 2015, allowing taxpayers to voluntarily declare undisclosed foreign assets acquired up to 31 March 2015, subject to payment of tax and penalty.
However, over the years, it has become evident that a significant number of small taxpayers continued to remain non-compliant, not due to deliberate evasion, but because of legacy issues or inadvertent omissions.
Why FAST-DS 2026 Is Being Introduced
According to the government, non-compliance is particularly common in cases involving:
- ESOPs or RSUs received during foreign employment
- Dormant or low-value foreign bank accounts held by former overseas students
- Savings accounts or insurance policies of returning non-residents
- Assets held during overseas deputation
- Old foreign financial interests that taxpayers believed were not reportable
Additionally, data received under the Automatic Exchange of Information (AEOI) framework has revealed non-disclosure of foreign financial assets by a large number of PAN holders, prompting the need for a targeted compliance mechanism.
Key Features of FAST-DS 2026
The proposed FAST-DS 2026 is a time-bound voluntary disclosure scheme specifically designed for small taxpayers with foreign assets or foreign-sourced income.
Key highlights include:
- Voluntary declaration of undisclosed foreign assets and income
- Payment of tax or fee, depending on the nature and source of acquisition
- Limited immunity from penalty and prosecution under the Black Money Act for matters covered by the declaration
- Focus on resolving legacy and inadvertent non-disclosures, rather than intentional evasion
The scheme aims to strike a balance between enforcement and fairness by enabling honest taxpayers to regularize past mistakes without facing harsh consequences.
Cases Excluded from the Scheme
Importantly, FAST-DS 2026 will not apply to all cases. The following are proposed to be excluded:
- Cases where prosecution has already been initiated
- Assets linked to proceeds of crime
- Serious and wilful tax evasion cases
This ensures that the scheme is not misused by habitual or high-risk offenders.
When Will FAST-DS 2026 Come into Force?
The scheme will be introduced as part of the Finance Bill, 2026 and will come into effect from a date to be notified by the Central Government. Detailed rules, declaration procedures, and payment mechanisms are expected to be notified separately after the Bill is enacted.
(Relevant provisions covered under Clauses 114 to 128 of the Finance Bill, 2026.)
What This Means for Taxpayers
For small taxpayers who have long worried about minor or unintentional foreign asset non-disclosures, FAST-DS 2026 could offer a rare second chance. Tax professionals expect the scheme to significantly reduce litigation, improve voluntary compliance, and bring closure to long-pending legacy cases.
Taxpayers with past foreign income or assets are advised to review their disclosure status carefully and seek professional advice once the detailed scheme guidelines are notified.
Official copy of the Clause is as follows
Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026 (FAST-DS 2026)
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was enacted to address the issue of undisclosed foreign income and assets held by resident taxpayers. At the time of its introduction, a one-time compliance window was provided from 1 July 2015 to 30 September 2015 to enable voluntary declaration of undisclosed foreign assets acquired up to 31 March 2015, subject to payment of tax and penalty.
It has been observed that non-compliance is particularly prevalent in cases involving legacy or inadvertent non-disclosures for small taxpayers, including holdings arising from foreign employment benefits such as ESOPs or RSUs, dormant or low-value foreign bank accounts of former students, savings or insurance policies of returning non-residents, and assets held by individuals on overseas deputation. Further, information received under the Automatic Exchange of Information framework indicates non-disclosure of foreign financial assets by a significant number of PAN holders.
In order to facilitate voluntary compliance and enable resolution of such legacy cases of small taxpayers, it is proposed to introduce a time-bound scheme for declaration of foreign assets and foreign-sourced income, with payment of tax or fee based on the nature and source of acquisition and grant of limited immunity from penalty and prosecution under the Black Money Act in respect of matters covered by the declaration. Cases involving prosecution or proceeds of crime are proposed to be excluded
The proposed scheme shall form part of the Finance Bill, 2026 and shall come into force from the date to be notified by the Central Government.
[Clauses 114 to 128]
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