Undisclosed Foreign Assets? Govt Opens One-Time Disclosure Window Today; Check Tax, Deadline & Who Can Apply

The Central Board of Direct Taxes has opened a one-time disclosure window for small taxpayers to come clean on undisclosed foreign assets and foreign income, beginning from August 16th.

The scheme, called the Foreign Assets of Small Taxpayers-Disclosure Scheme, 2026 (FAST-DS), has been notified under Chapter IV of the Finance Act, 2026, and was first announced as part of the Union Budget 2026-27.

The CBDT has separately notified the 'Foreign Assets of Small Taxpayers-Disclosure Scheme Rules, 2026' to operationalise the framework, and these rules come into force on August 16.

The scheme covers any undisclosed asset which is located outside India, including a financial interest in a foreign entity, or undisclosed foreign income that was chargeable to tax in India. It is particularly meant for resident Indians, NRIs and returning residents who are not aware of the reporting rules or find it complex.

The Finance Minister specifically pointed out students, young professionals, tech employees and relocated NRIs while introducing the proposal in her Budget speech.

When Does The Window Closes?

The disclosure window will be open till December 31st. Declarations must be filed electronically in Form 1 by this date. Once filed, the Principal Director General or Director General of Income-tax (Systems) will pass an order determining the payable amount in Form 2, after which the declarant gets two months to pay the determined amount without any interest charge.

Two Categories Under The Scheme

The scheme has divided taxpayers into two categories based on the nature of their default:

Category A involves those who have Completely Unreported Assets

This applies to individuals with undisclosed foreign assets or untaxed overseas income of up to Rs 1 crore in aggregate value as on the valuation date of March 31, 2026. Under this category, taxpayers must pay a flat 30% tax on the fair market value of the asset plus an additional 30% as an additional income tax

Category B involves Tax-Paid But Undeclared Assets

This covers foreign assets worth up to Rs 5 crore that were already acquired using income on which tax had been paid, or were acquired while the taxpayer was a non-resident, but were never disclosed in the relevant income tax return.

What Happens If You Don't Use This Window

Under existing law, the Black Money (Undisclosed Foreign Income and Assets and Imposition of Tax Act, 2015, disclosure of all foreign assets and income is mandatory in the specified Schedule FA of the income tax return.

If someone does not comply, they will face consequences. The undisclosed foreign income is taxed at normal slab rates plus interest, with penalties running up to 200% for under-reporting or misreporting, alongside potential criminal charges.