FAST-DS 2026: Foreign Asset Disclosure — Eligibility, Form 1, Valuation and the ₹1 Crore / ₹5 Crore Limits

A one-time window is open. Between 16 August 2026 and 31 December 2026, an eligible taxpayer can declare a foreign asset or foreign income that never made it into an Indian return — and settle it under the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS). The scheme sits in Chapter IV, sections 130 to 144 of the Finance Act, 2026, read with the FAST-DS Rules, 2026 notified by G.S.R. 732(E) on 14 August 2026.

Form 1 is live on the e-filing portal. The last date does not move.

The short version

• Two categories, not one. Row 1 of the section 133 table costs 60% and caps at ₹1 crore. Row 2 costs a flat fee of ₹1 lakh and caps at ₹5 crore.
• Row 2 is for a reporting failure, not concealed income. It covers an asset bought from money that was already taxed, or bought while you were a non-resident, which you then failed to list in the relevant Schedule of your return.
• Valuation date is 31 March 2026. A foreign bank account is valued at the sum of every deposit since the account opened — not its closing balance.
• Breaching the cap disqualifies you entirely. There is no partial declaration.
• The immunity is granted under the Black Money Act. That is a narrower promise than it first sounds, and the difference matters.

The official material calls this a one-time voluntary disclosure scheme, and we use the same words. It does not clear every tax consequence generally. What it does give is defined by the scheme itself, and set out below.

Who is eligible to declare?

Section 131(1)(a) defines the eligible assessee more precisely than most summaries suggest. You qualify if you are:

• resident in India under section 6 of the Income-tax Act, 1961 in the relevant previous year; or
• a non-resident or RNOR now, provided you were resident in India either in the previous year to which the foreign income relates, or in the previous year in which the foreign asset was acquired.

So a present non-resident can still declare. What matters is your status in the year the income arose or the asset was bought, not your status today. If you claim non-resident status for any declared year, Form 1 asks for your passport details. Our note on residential status for NRIs sets out how that test actually runs.

You also need one of three grounds

Section 132 allows a declaration where the assessee:

• failed to furnish a return under section 139; or
• failed to disclose the asset or income in a return filed before the scheme commenced; or
• the asset or income has escaped assessment within the meaning of section 147.

That third ground is worth pausing on. An escaped-assessment situation is expressly within the scheme, not outside it.

Row 1 versus Row 2 — the distinction that decides everything

Section 133 sets out one table with two rows. Getting your facts into the right row changes the cost by orders of magnitude.

Row 2 is the provision that will matter to most people who come to us on this. It is a fee for a disclosure failure. It is not a penalty on concealed income, because in a Row 2 case there is no concealed income — the money was taxed, or it was earned abroad while you were outside the Indian tax net.

The people most likely to sit in Row 2: returning NRIs with an old overseas salary account; professionals holding ESPP, RSU or ESOP stock in a foreign brokerage; holders of foreign retirement accounts; and anyone who kept investing abroad after moving back and assumed that tax paid meant nothing further to report. Reporting is a separate obligation — see our note on Schedule FA.

Exceed the cap and you are out

The Rules are blunt here. Rule 4, Illustration 3 takes a foreign mutual fund worth ₹2.5 crore and quoted shares worth ₹4 crore. Aggregate ₹6.5 crore, above the ₹5 crore ceiling, so the assessee is not eligible to declare under the scheme at all. You cannot carve out ₹4.9 crore and declare that. The threshold is tested on the aggregate of everything in that row, across all years.

Valuation: why your closing balance is probably the wrong number

Rule 3 fixes the valuation date at 31 March 2026. The general rule for most assets is the higher of the cost of acquisition and the open-market price on the valuation date, supported by a report from a valuer recognised by the government of the country where the asset sits. Where no such valuation is carried out, the indexed cost of acquisition is deemed to be the fair market value.

Bank accounts follow a completely different rule.

Two adjustments soften that:

• Redeposits are excluded. Where a deposit is made from the proceeds of a withdrawal from the same account, it is not counted again.
• Earlier Black Money Act declarations are respected. If the account was declared under Chapter VI of the Black Money Act, 2015 and charged to tax and penalty, you count only the deposits made since that declaration.

The department’s own worked example

This is Illustration 1 to Rule 3, reproduced from the notification. An account opened in 2010, with withdrawals later redeposited.

The value is $4,900, converted to rupees at the RBI reference rate on 31 March 2026. The closing balance on that date is nowhere in the computation. A modest-looking account that has been cycling salary for fifteen years can carry a valuation many times its balance — and that is the number tested against the ₹1 crore or ₹5 crore ceiling.

Reinvestment relief stops double counting

Rule 3(3) prevents the same money being taxed twice across two assets. The department’s example: a house bought abroad for ₹20 lakh, sold for ₹25 lakh, proceeds banked; ₹30 lakh later withdrawn from that account to buy a second house now worth ₹50 lakh. If the bank account computes to ₹70 lakh, the values become:

• First house: ₹25 lakh less ₹25 lakh reinvested = nil
• Bank account: ₹70 lakh less ₹30 lakh reinvested = ₹40 lakh
• Second house: higher of ₹30 lakh and ₹50 lakh = ₹50 lakh

Other assets, in brief

• Quoted shares and securities: higher of cost and the average of the lowest and highest price on an established securities market on 31.3.2026. No trading that day, use the nearest preceding trading day.
• Unquoted equity shares: higher of cost and a prescribed book-value formula. No valuation, indexed cost applies.
• Immovable property, jewellery, artistic work: higher of cost and open-market price per a recognised foreign valuer, else indexed cost.
• Currency: RBI reference rate on the valuation date for RBI-designated currencies. Otherwise convert to US dollars at the local central bank rate first, then to rupees.

One practical comfort in Rule 5(2): for assets other than a bank account, a variance of up to 20% between your declared value and the value later determined by an income-tax authority does not, by itself, make the declaration invalid or void.

Form 1 is live — and here is the path

As at 2 September 2026, the e-filing portal home page carries the notice: “Form 1 under the Foreign Assets of Small Taxpayers Disclosure Scheme is now available for filing.” The portal gives the navigation path as:

e-File → Income Tax Forms → File Income Tax Forms → Under Other Acts → Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (Form 1)

A note on names: the portal announcement uses the acronym FADS 2026, while the Finance Act, the Rules and the CBDT FAQs all use FAST-DS. Same scheme. Worth knowing when you search the portal.

Filing is online only. Under Rule 9, verification is by digital signature where your return requires a DSC, and by electronic verification code otherwise. We have not tested the behaviour behind login, so we do not make claims about draft saving or on-screen prompts.

What happens after you file: Forms 2, 3 and 4

1. Form 1By 31 Dec 2026

   You file the declaration electronically, with proof of acquisition and valuation reports uploaded.
2. Form 2Within 1 month

   The income-tax authority verifies and passes an order stating the amount payable — one month from the end of the month in which you declared.
3. PaymentWithin 2 months

   You pay the determined amount, counted from the end of the month you received Form 2. Part payments are allowed.
4. Extension2 more months

   A further period with simple interest at 1% per month or part month. The outer limit is 4 months from the end of the Form 2 month.
5. Form 3Within the payment period

   You intimate payment electronically, with proof and any interest.
6. Form 4Within 1 month

   Order certifying the declaration is valid and payment complete. Conclusive. Issued one month from the end of the month of your Form 3 intimation.

Miss the outer payment limit and the consequence is severe. Form 2 states that on non-payment within time, the declaration is treated as void and deemed never to have been made. Section 138 adds that nothing paid under the scheme is refundable. The deadline discipline here is not administrative.

Where the scheme does not apply

Section 140 contains two exclusions, and only two:

• income or an asset which directly or indirectly represents proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; and
• income or an asset relating to an assessment year for which assessment proceedings are already completed under the Black Money Act, 2015.

Form 1 requires you to certify that section 140 is not attracted, so this is a positive representation, not a passive condition.

Commentary elsewhere lists further disqualifications — a search or survey, the department already holding CRS or FATCA data, an information-based notice. We checked the statute, the Rules and all fifty CBDT FAQs. None of those appears as an exclusion in the official material. We do not repeat them.

Two related points that are in the statute. A pending assessment is not an exclusion: under section 141, where proceedings under the Income-tax Act or the Black Money Act are pending on the declared income or asset, the Assessing Officer must take the declaration into account while finalising the assessment. And a declaration is invalid under section 134(3) if any material particular is false, or if you breach a condition of the scheme.

What the immunity actually covers

This is where careful reading earns its keep. Two provisions do two different jobs.

• Section 136 keeps the declared income, or the amount invested in the declared asset, out of your total income under both the Income-tax Act, 1961 and the Black Money Act, 2015 — provided you pay within the extended period.
• Section 139 grants immunity from further tax, penalty and prosecution under the Black Money Act, 2015, for the previous year ending 31 March 2026 or earlier.

Read them together and the shape is clear. The prosecution-and-penalty immunity is expressed as Black Money Act immunity. It is a real and substantial protection, and it is narrower than a blanket clearance of every tax consequence. Section 137 adds that you cannot then reopen a completed assessment to claim rectification, revision, set-off or relief.

How this compares with the Black Money Act exposure

The Black Money Act, 2015 attaches two separate consequences to an unreported foreign asset. Sections 42 and 43 impose a penalty of ₹10 lakh. Sections 49 and 50 provide for prosecution.

Both now carry the same threshold. Neither applies where the aggregate value of the assets, other than immovable property, does not exceed ₹20 lakh. For the penalty sections that threshold has applied since October 2024. For the prosecution sections it was inserted by the Finance Act, 2026, with retrospective effect from 1 October 2024 — before that, prosecution applied irrespective of value.

Note what those two figures are doing. ₹10 lakh is the penalty amount. ₹20 lakh is the value threshold below which the provisions do not bite. They are not alternatives to each other.

Foreign immovable property gets no relief. Penalty and prosecution both remain available whatever it is worth.

The exposure also repeats year by year, which is why a long-forgotten holding can matter more than its size suggests. Set against that, a Row 2 declaration settles the reporting failure for a flat ₹1 lakh. Whether either section would in fact apply to a given taxpayer depends on the years, the asset type, the value and the ₹20 lakh test. It is a reason to get your position assessed, not a result you can assume.

Nine situations we expect to see

CBDT’s own Budget 2026 FAQs name the groups the scheme is aimed at: employees of multinational technology companies holding unreported ESOPs or RSUs from foreign employers, former students with dormant or low-balance foreign bank accounts left over from studying abroad, returning non-residents with foreign savings or insurance policies, and personnel on deputation abroad.

The situations below are illustrative. They are not advice, and every one turns on documents.

1. Returning NRI, old foreign bank account. Worked in Dubai twelve years, moved back to Pune in 2019, account still open. Likely Row 2 if the funds were foreign-earned while non-resident. The risk is valuation: lifetime deposits, not the small balance left.
2. Foreign salary account accumulated while non-resident. Salary credited abroad, never taxable in India at the time. Row 2 territory. Key evidence is proof of non-resident status for those years.
3. Former student with a dormant account abroad. Opened during a master’s programme, small balance, forgotten after coming home. Named by CBDT as a target group. The balance is not the point — the account is valued on lifetime deposits, and living costs paid in over two or three years add up.
4. ESPP shares bought from already-taxed salary. Perquisite taxed in India, shares held in a US brokerage, never entered in the Schedule. Squarely the Row 2(b) fact pattern.
5. Foreign brokerage account. Several holdings across years. Values aggregate for the ceiling test, so the whole portfolio must be valued before you can even confirm eligibility.
6. Foreign retirement account. Often overlooked because it feels illiquid and untouchable. Still a foreign asset. The valuation method depends on what the account actually holds.
7. Foreign property. Higher of cost and open-market value per a recognised valuer in that country, else indexed cost. Property is also where a valuation report is most clearly expected.
8. Genuinely undisclosed foreign income. Income that was chargeable in India and never offered. Row 1, 60%, and only if the aggregate stays within ₹1 crore.
9. Aggregate over the ceiling. Two assets totalling ₹6.5 crore. Not eligible, on the department’s own illustration. The answer here is a different strategy, not a smaller declaration.

What to collect before filing

Only what your case needs. For most declarations that means:

• Prior ITRs and the Schedule FA pages, if filed
• Full foreign bank statements from account opening — not just recent years, because valuation runs on lifetime deposits
• Brokerage and custodial statements; ESPP, RSU or ESOP grant and vesting records
• Employment records and proof of residential status for the relevant years, plus passport
• Acquisition documents for each asset; property papers and a recognised valuer’s report where valuation is carried out
• Foreign tax returns and evidence of foreign tax paid, where relevant — see Form 67 and foreign tax credit
• Retirement account statements
• Currency conversion workings tied to the RBI reference rate on 31.3.2026
• Any prior assessment orders, notices, or Black Money Act correspondence

Two questions the scheme does not answer

We would rather flag these than paper over them.

FEMA. Chapter IV, the Rules and the FAQs are silent on the exchange-control position. Regularising a foreign asset for income-tax purposes does not by itself resolve any question under FEMA. That is a separate assessment.

What to do now

The sequence is the same in almost every case. Identify the asset or income. Establish your residential status for the year it arose or was acquired. Work out whether disclosure was required and whether tax was already paid — that determines Row 1 or Row 2. Value everything to 31 March 2026, correctly. Test the aggregate against the ceiling. Only then decide whether to file.

1. 01

   Were you resident in India in the year the income arose, or the year the asset was acquired?
   Yes

   You are within the section 131 definition, even if you are non-resident or RNOR today.

   No

   The scheme does not reach you for that item.
2. 02

   Was the asset acquired from income already taxed in India, or earned abroad while you were a non-resident?
   Yes — reporting failed

   Row 2. A fee of ₹1,00,000, provided the aggregate stays within ₹5 crore.

   No — never offered to tax

   Row 1. 60% effective, provided the aggregate stays within ₹1 crore.
3. 03

   Valued to 31 March 2026, does the aggregate for that row stay within its ceiling?
   Within the ceiling

   The scheme is potentially available. Bank accounts value on lifetime deposits, not the balance.

   Over the ceiling

   Not eligible at all. There is no partial declaration.
4. 04

   Is section 140 attracted — PMLA proceedings on proceeds of crime, or a completed Black Money Act assessment for that year?
   Neither applies

   Proceed. Form 1 requires you to certify exactly this.

   Either applies

   Excluded for that income or asset.

The window closes on 31 December 2026, and the payment cycle runs for months after the declaration. Filing in December leaves no room if a valuation is queried.

Primary sources and references

• Finance Act, 2026 (4 of 2026), Chapter IV, sections 130 to 144 — The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026
• Notification No. 114/2026 [F.No. 370142/18/2026-TPL], G.S.R. 732(E), dated 14 August 2026 — Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026, including Forms 1 to 4
• CBDT, FAQs on The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 — Questions 1 to 50
• Income Tax Department e-filing portal, home page notice and scheme rollout announcement, verified 2 September 2026
• Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 — sections 42 and 43 (penalty) and sections 49 and 50 (prosecution)
• Finance Act, 2026, section 160 — amendment of the Black Money Act, 2015, inserting the ₹20 lakh threshold into sections 49 and 50 with effect from 1 October 2024
• CBDT, FAQs on Budget, 2026 — Part XII (FAST-DS) and Part XX (rationalisation of prosecution under the Black Money Act)

This article states the law as at 2 September 2026 and is general information, not advice. Eligibility, valuation and the amount payable turn on facts and documents specific to each taxpayer. No declaration should be filed on the strength of a general article.