The income tax department has opened a new window for small taxpayers to come clean about their foreign assets. The Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) starts on 16 August, and eligible taxpayers can file declarations until 31 December.
Under this scheme, taxpayers must pay 30 per cent tax on the declared assets, plus an additional levy of the same amount. That brings the total cost of disclosure to 60 per cent.
What is the FAST-DS foreign asset disclosure scheme
The scheme targets small taxpayers — including students, young professionals, tech employees, and relocated NRIs — who may hold undisclosed foreign assets or earn undisclosed foreign income. It was announced in the 2026-27 Budget as a voluntary compliance opportunity.
According to National Herald, the scheme allows small taxpayers to declare certain overseas assets and income by 31 December, with immunity from further action.
The Central Board of Direct Taxes (CBDT) notified the rules for the scheme on Saturday, 15 August. The board said the scheme "enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee."
How the 60 per cent levy works for taxpayers
The cost structure is straightforward but heavy. Taxpayers pay 30 per cent tax on the value of the foreign assets or income they declare. On top of that, they pay an additional levy equal to the tax amount — another 30 per cent. Combined, the total outflow is 60 per cent of the declared value.
As reported by ETV Bharat, the government has rolled out this foreign asset disclosure scheme specifically for small taxpayers, with the 30 per cent tax plus penalty structure applying to those who come forward.
The scheme also covers foreign ESOPs (employee stock ownership plans) and bank accounts held abroad. According to Lawrbit, taxpayers can regularize foreign ESOPs and accounts under FAST-DS 2026, with the 60 per cent tax rate applying to most disclosures.
Who should use the FAST-DS scheme
The scheme is designed for individuals who fall under the "small taxpayer" category. This includes:
- Students studying abroad who may have opened bank accounts or earned small incomes
- Young professionals working overseas with foreign savings or investments
- Tech employees holding foreign ESOPs or stock options
- Relocated NRIs who may have left assets behind in India or abroad
For these groups, the scheme offers a way to regularize their tax position without facing harsher penalties or prosecution. The immunity from further action is a key incentive — it means once a taxpayer declares under FAST-DS and pays the levy, the matter is closed.
"The scheme enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee." — CBDT via National Herald
Our Take: A costly but clear path to compliance
To put it plainly, 60 per cent is a steep price for coming clean. But for small taxpayers sitting on undisclosed foreign assets, this may still be the cheapest option available.
The alternative — getting caught — could mean much higher penalties, interest, and even prosecution under India's tax laws. The FAST-DS scheme offers certainty: you pay 60 per cent, and you are done.
In our view, the scheme is a smart move by the government. It brings small taxpayers into the net without the heavy machinery of enforcement. For students and young professionals who may have opened foreign accounts without realizing the reporting requirements, this is a practical way out.
The window is open from 16 August to 31 December. Taxpayers who qualify should act early — waiting only increases the risk of errors or missed deadlines. The cost is fixed, so there is no advantage to delaying.
For anyone unsure whether they qualify, the key question is simple: do you hold foreign assets or earn foreign income that you have not declared? If yes, this scheme is worth serious consideration before the December deadline passes.
