FAST-DS 2026: Disclosure of Foreign Assets by Small Assessees
This article covers the Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026 (FAST-DS): who may declare, what it costs, how assets are valued, how the procedure runs and what the declarant gains and gives up. The law is stated as on 28 September 2026.
On 25 September 2026 the Income Tax Department sent system-generated advisory emails to assessees whose PAN is linked, through CRS and FATCA data, to foreign bank accounts, custodial accounts, shareholdings or property in earlier years. The last date for declaration is 31 December 2026, and the practical window is shorter than it looks. Practitioners need to classify each client's position before the decision is made.
The background
A December 2025 NUDGE SMS asked assessees to revise returns for AY 2025-26 where information had not been properly reported, and the Foreign Assets Information (FAI) report went live in AIS in July 2026. The scheme was announced in the Union Budget on 1 February 2026 (clauses 114 to 128 of the Finance Bill, 2026) as a six-month window. The Finance Act, 2026 took effect on 1 April 2026, but the scheme was not notified at that time.
CBDT notified the Foreign Assets of Small Taxpayers - Disclosure Scheme Rules, 2026 on 14 August 2026 (Notification No. 114/2026, G.S.R. 732(E)), with 50 FAQs. The scheme came into force on 16 August 2026, and Form 1 was enabled on the e-filing portal in early September 2026. On 28 September 2026 CBDT extended the due date for tax audit reports for AY 2026-27 to 21 October 2026 and the due date for returns in audit cases to 21 November 2026.
The email is an automated advisory and states that it is not a legal notice. It needs no reply, although it records that the assessee was informed, which may matter in later proceedings. It gives the filing path: e-Filing Portal, e-File, Income Tax Forms, File Income Tax Forms, Forms as per other Acts, Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (Form 1 of FADS 2026). The links in the email pass through a third-party tracking domain before reaching incometaxindia.gov.in, so the form should be reached through the portal directly.
The governing law
The scheme sits in Chapter IV (Section 130 to Section 144) of the Finance Act, 2026 and in the Rules. It is a one-time voluntary scheme to declare undisclosed foreign assets, undisclosed foreign income, or foreign assets that were simply not reported, on payment of a specified tax or a flat fee. Declarations close on 31 December 2026, with a valuation date of 31 March 2026. The scheme is administered online by the Pr. DGIT (Systems) / DGIT (Systems).
Eligibility. The declarant must be either a person resident in India under Section 6 of the Income-tax Act, 1961 in the relevant previous year, or a person who was non-resident or not ordinarily resident in the relevant previous year but resident in India in the previous year to which the undisclosed foreign income relates or in which the undisclosed foreign asset was acquired. Current non-resident status is therefore not a bar.
A declaration is open where the person failed to file a return under Section 139, failed to disclose the asset or income in a return filed before commencement, or the asset or income has escaped assessment within the meaning of Section 147. Any previous year may be covered, subject to the monetary ceilings.
An "undisclosed asset located outside India" is an asset, including a financial interest in an entity, held in the person's name or beneficially owned, where there is no explanation of the source of investment or the explanation is unsatisfactory. "Undisclosed foreign income" is foreign-source income chargeable to tax in India that was never offered to tax.