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FAST-DS 2026, the one-time window to fix missed Schedule FA years

Open since 16 August 2026. Closes 31 December 2026. No later date exists in the scheme.

You moved back to India a few years ago. Somewhere along the way you became Resident and Ordinarily Resident, and the return you filed never carried a Schedule FA for the 401(k), the brokerage account or the savings account you left behind. Nobody told you, nothing happened, and now you have read that the Department can see foreign accounts in the AIS and that the penalty is ₹10 lakh a year. You want to know whether the disclosure scheme everyone is mentioning applies to you, what it would cost, and what happens if you do nothing.
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Last reviewed: 18 September 20267 min readReviewed by Preetesh Maloo, CA

The short answer

FAST-DS 2026 (Foreign Assets of Small Taxpayers Disclosure Scheme, Chapter IV of the Finance Act 2026, rules by CBDT Notification 114/2026) lets you declare foreign assets or income you did not report and walk away with immunity from Black Money Act tax, penalty and prosecution on what you declared. If the assets came from income that was already taxed, or were bought while you were a non-resident, and their value on 31 March 2026 is ₹5 crore or less, the cost is a flat ₹1 lakh. If the income itself was never taxed anywhere, the cost is 60 percent of the value, and the ceiling is ₹1 crore. Declarations are filed electronically in Form 1 and close on 31 December 2026.

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Related situations

The two categories, and which one you are in

The scheme sorts every declaration by where the money came from, not by what the asset is.

Category ACategory B
What it coversForeign income or assets never offered to tax anywhereAssets bought from income already taxed, or acquired while you were a non-resident
Ceiling (value on 31 March 2026)₹1 crore in aggregate₹5 crore fair market value
What you pay30 percent tax plus an equal additional amount: 60 percent of the valueA flat ₹1 lakh, whatever the value

The returning-NRI case is almost always Category B. A 401(k) built from a US salary that was taxed in the US, a brokerage account funded while you lived abroad, a savings account you opened as a student: all acquired while non-resident. The scheme was written for exactly this reader; the Department's own launch note names students, young professionals, technology employees and relocated NRIs.

Category A is for income that escaped tax everywhere: consulting fees paid into a foreign account and never returned, rent on a flat abroad never declared. The 60 percent rate is steep because the alternative under the Black Money Act is worse.

What it forgives

A valid declaration, with the amount paid, carries immunity from tax, penalty and prosecution under the Black Money Act for what was declared. That is the whole point, and it is automatic on a valid declaration rather than something an officer decides.

Without it, a missed Schedule FA year on a return you filed is a ₹10 lakh penalty under section 43 of the Black Money Act (section 42 if you filed no return at all), for each year, with no intent test. Where the source cannot be explained, sections 3 and 41 stack a 30 percent tax and a 90 percent penalty on top. Since 1 October 2024 a safe harbour covers foreign assets other than property totalling ₹20 lakh or less, so a small, dormant account may need nothing. A 401(k) worth a few crore is not small.

The usual escape routes do not work for old years: a revised return (section 139(5)) is long closed, and an updated return (section 139(8A)) is built around paying extra tax, which a disclosure omission does not generate.

What it costs, on three real-sized cases

Your situationCategoryCost under FAST-DSExposure if found first
401(k) worth ₹2.4 crore, built from taxed US salary, three ROR years unreportedB₹1 lakh₹30 lakh (₹10 lakh a year)
Brokerage account worth ₹18 lakh, opened while abroadUnder the ₹20 lakh safe harbourNothing to declare, but disclose from this yearNil, if it stays under ₹20 lakh
₹40 lakh of consulting income paid abroad and never taxedA₹24 lakh₹40 lakh plus penalty of ₹36 lakh, plus the missed-year penalties

The first row is the common one. The ₹1 lakh is a fee for closing the years cleanly; it is not a percentage and it does not rise with the value up to the ₹5 crore ceiling.

What shuts the door

The scheme does not apply to:

• Assets or income that are proceeds of crime where proceedings under the Prevention of Money-laundering Act have begun or are pending • A year for which a Black Money Act assessment has already been completed • A declaration filed after 31 December 2026 • Assets over the ceiling for the category, or a declarant outside the scheme's residency conditions

A notice already in hand is a different question. A summons or a Schedule FA query does not by itself bar a declaration, but the completed-assessment bar and the timing make it a matter to check the same week, not after the reply is drafted.

Why the timing is not academic

Since July 2026 the AIS carries a Foreign Assets Information view built from what India receives under the automatic exchange framework from more than a hundred jurisdictions. Calendar-2025 data is expected in the AIS around September and October 2026. Once the Department has a bank's report of your account and your return has no Schedule FA, a notice is a matter of workflow, not detection.

The window closes on 31 December 2026 and the scheme names no extension. A declaration needs the value of each asset on 31 March 2026, which for a retirement account means a statement for that date, and payment before the declaration is valid. Statements from a US or UK provider take weeks to obtain. Starting in December is starting late.

How the declaration works

Form 1 is filed electronically with the prescribed authority. It lists each asset or income, its value on 31 March 2026 under the scheme's valuation rules, the category claimed, and the amount paid. The CA's work is in the two places people get wrong: putting a defensible value on an account for a date that is already past, and proving the Category B condition, that the source was taxed or that you were non-resident when the asset was acquired. Passport stamps, foreign tax returns and the account-opening date carry that proof.

Once the declaration is accepted, Schedule FA has to be filed correctly for the current year and every year after. The scheme closes the past; it does not change the future.

What's involved

What the CA actually does

  1. 1

    Tell you whether it applies, in one call

    Which years you were ROR, which assets need declaring, which category each falls in, and whether the ₹20 lakh safe harbour takes any of it out. If the answer is that you need nothing, you hear that too.

  2. 2

    Value each asset as on 31 March 2026

    Retirement accounts, brokerage holdings and property, under the scheme's valuation rules, with the statements that support the figure.

  3. 3

    Prove the Category B condition

    Residency history, foreign tax returns and account-opening dates assembled so the ₹1 lakh route holds if it is questioned.

  4. 4

    File Form 1 and fix the current year

    The declaration, the payment, and a Schedule FA on this year's return so the immunity you bought is not undone by the next omission.

What to have ready

Documents you'll typically need

  • Passport pages showing entry and exit dates for the years since you moved back
  • Statements for each foreign account as on 31 March 2026 (year-end statements will do for most providers)
  • Foreign tax returns for the years the income was earned, if claiming Category B on the taxed-income ground
  • Account-opening confirmations, to show acquisition while non-resident
  • Your Indian returns for the ROR years, to identify which carried no Schedule FA

References on this page

  • Finance Act 2026, Chapter IV (sections 130 to 144): Foreign Assets of Small Taxpayers Disclosure Scheme, 2026
  • CBDT Notification 114/2026 dated 14 August 2026: FAST-DS Rules, 2026 (Form 1, valuation, in force 16 August 2026)
  • Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015, sections 42 and 43 (₹10 lakh penalty), 49 to 51 (prosecution)
  • Finance (No. 2) Act 2024: ₹20 lakh aggregate proviso for non-immovable foreign assets, from 1 October 2024
  • CBDT note on Foreign Assets Information in the AIS, 17 July 2026

Frequently asked questions

Common questions

No. Schedule FA applies only to Resident and Ordinarily Resident years. RNOR years carry no foreign-asset disclosure obligation, so there is nothing to declare for them. The scheme matters for the ROR years that followed.

Category B, on both grounds: the income was taxed in the US, and the account was acquired while you were a non-resident of India. If its value on 31 March 2026 is ₹5 crore or less, the cost is a flat ₹1 lakh.

Once, for the declaration, up to the ₹5 crore ceiling. It is a flat fee, not a percentage and not a per-year charge.

Usually yes, unless a Black Money Act assessment for that year has already been completed or the assets are tied to money-laundering proceedings. A notice makes the timing urgent rather than impossible; have the eligibility checked before the reply is filed.

The scheme itself names 31 December 2026 and provides no extension. Plan as if that is final.

Foreign assets other than immovable property totalling ₹20 lakh or less sit inside a safe harbour from the ₹10 lakh penalties since 1 October 2024. Nothing to declare under the scheme, but disclose them in Schedule FA from this year onward, because the harbour does not cover property and does not cover growth past the line.

The exceptions that change the answer

Where the general rule stops applying to you

Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.

Schedule FA reporting period

Right now: The CALENDAR year ending during the relevant financial year, not the Indian financial year

Where it works differently

Filing for FY 2025-26
Schedule FA covers 1 January to 31 December 2025, a nine-month offset from the Indian tax year.
The schedule is aligned to foreign reporting years so that CRS and FATCA data reconcile.
An asset was held for even one day in that calendar year
It is reportable. Closing the account before 31 March does not remove the obligation.
'At any time during' the period.
The taxpayer is RNOR or non-resident
Schedule FA does not apply at all.
The duty attaches to a resident and ordinarily resident.

Commonly got wrong

  • Schedule FA covers the Indian financial year. It covers the calendar year ending within that financial year.Schedule FA in the FY 2025-26 return covers 1 January to 31 December 2025, the calendar year, not the Indian financial year.

Black Money Act penalty for non-disclosure of foreign assets

Right now: Rs 10 lakh flat, per year of default

Where it works differently

Aggregate value of foreign assets (OTHER than immovable property) does not exceed Rs 20 lakh at any time in the year
No penalty under s.42 or s.43.
De minimis proviso, raised from Rs 5 lakh to Rs 20 lakh by the Finance (No. 2) Act 2024 with effect from 1 October 2024.
The person is RNOR or non-resident
Schedule FA does not apply, so no exposure.
The obligation attaches to a resident and ordinarily resident.
The foreign asset is immovable property
The Rs 20 lakh carve-out does NOT apply.
The proviso expressly excludes immovable property.

Commonly got wrong

  • The de minimis threshold is Rs 5 lakh. Raised to Rs 20 lakh from 1 October 2024.Rs 20 lakh, excluding immovable property.
  • NRIs must file Schedule FA. It applies to residents and ordinarily residents only.The obligation starts when you become ordinarily resident.

FAST-DS 2026: cost of coming clean on foreign assets

Right now: 60% of the undisclosed value (30% tax + an equal amount in lieu of penalty), against 120% under the Black Money Act. Declarations 16 August to 31 December 2026

Where it works differently

Aggregate undisclosed foreign assets and undisclosed foreign income are up to Rs 1 crore (assets valued as on 31 March 2026)
Eligible for the 60% category, with immunity from further tax, penalty and prosecution under the Black Money Act; the declared amount is not included in total income.
The small-taxpayer threshold is the gate.
A declaration is made after 31 December 2026
It cannot be filed. The window opened on 16 August 2026 (CBDT Notification 114/2026 dated 14 August 2026) and closes on 31 December 2026.
Statutory window. After it closes, exposure reverts to the Black Money Act.
The declaration is accepted and paid on time
No further tax, penalty or prosecution on the declared asset under the Black Money Act. The scheme cannot be used to revise or rectify a completed assessment under the Income-tax Act or the Black Money Act, or to claim set-off or relief in an appeal.
Immunity is the point of the scheme, and it depends on payment.
The taxpayer is now a non-resident or RNOR
In scope only if they were Resident and Ordinarily Resident in the year the income arose or the asset was acquired.
The scheme targets assets that should have been reported while ROR, typically a returning or departed NRI who missed Schedule FA.
The foreign asset was bought from income earned while non-resident, or from income already taxed in India
A separate category applies: a fixed fee of Rs 1 lakh instead of the 60% charge, for assets up to Rs 5 crore.
Per the EY India alert on the FAST-DS Rules. The 60% charge is for undisclosed income or assets up to Rs 1 crore.
Proceedings have begun under the PMLA for the asset as proceeds of crime, or a Black Money Act assessment is already complete
Excluded from the scheme.
Per KPMG and EY alerts on the FAST-DS Rules.
The tax is not paid within two months from the end of the month in which the Form 2 order is received
A further period of up to two months is allowed with simple interest at 1% for each month or part of a month; if unpaid within four months from the end of the month in which Form 2 was passed, the benefit of the scheme is lost.
Immunity is conditional on payment.

Commonly got wrong

  • The scheme is not open yet. It commenced on 16 August 2026 under CBDT Notification 114/2026 and declarations close on 31 December 2026.The scheme is open now, from 16 August 2026 until 31 December 2026. Assets are valued as at 31 March 2026. After 31 December the Black Money Act route applies again.
  • It costs 30%. It is 60% in total: 30% tax plus 30% in lieu of penalty. The comparison that matters is 120% under the Black Money Act.60% of the undisclosed value all-in, against 120% plus prosecution exposure if the department finds it first.

Black Money Act: tax and penalty on undisclosed foreign assets

Right now: 30% tax on the value, plus a penalty of three times the tax (90%), so 120% in total, plus prosecution

Where it works differently

The taxpayer is RNOR or non-resident
The Act does not reach them. Exposure begins on becoming ordinarily resident.
The charge attaches to a resident.
FAST-DS 2026 opens
60% all-in instead of 120%, with full immunity, for aggregate undisclosed assets up to Rs 1 crore. The commencement date is not yet notified.
The FAST-DS 2026 terms are 60% in total, against 120% under the Black Money Act.
The failure is only a Schedule FA omission in a filed return
That is s.43, a flat Rs 10 lakh, not the 120% charge.
Different section, different consequence.

Commonly got wrong

  • Undisclosed foreign assets cost 30%. 30% is the tax. The penalty is three times that again, so the exposure is 120% of the asset value plus prosecution.30% tax plus a 90% penalty, 120% of the value, and prosecution of three to ten years.

Related

If this matched your situation, these go further

Foreign tax credit and Schedule FA disclosure on your Indian returnYou got a Black Money Act notice about a foreign account you didn't discloseReturning to India with US RSUs? Schedule FA needs the account, not just the sharesGetting your AIS and TIS off the income-tax portalSchedule FA disclosure builder

Declarations close 31 December 2026.

Send us your move-back date and a list of what you hold abroad. A practising CA tells you within a day whether the scheme applies, which category, and what it costs, before the statements are even ordered.

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