FAST-DS 2026 scheme introduces foreign asset disclosure and enforcement

The Foreign Assets of Small Taxpayers–Disclosure Scheme, 2026 (FAST-DS), has been introduced to allow eligible taxpayers to regularize undisclosed or unreported foreign assets and income. The scheme features two primary categories: assets and income up to ₹1 crore, which incur a 30% tax plus an equal additional amount, and assets up to ₹5 crore acquired from taxed income or during non-residency, which require a flat fee of ₹1 lakh.

While the scheme provides immunity from tax, penalty, and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, concerns remain regarding a gap in FEMA compliance. The scheme does not explicitly provide immunity under the Foreign Exchange Management Act (FEMA), potentially leaving taxpayers exposed to foreign-exchange regulatory issues.

Concurrently, the Income-tax Department has intensified its enforcement efforts. Utilizing information from the Common Reporting Standard (CRS), FATCA, and the Automatic Exchange of Information (AEOI), authorities are increasing scrutiny of overseas accounts, investments, and properties. This has led to a rise in verification proceedings, summons, and notices related to foreign asset disclosure and Schedule FA reporting.