WhatsApp
Call Us
Email Us
Whatsapp Community
Would you like to schedule a call back
If you spent years working in the US, Canada, the UK, Singapore or the Gulf, came back to India, and have a nagging feeling that your old 401(k), RSUs or that apartment you never sold might not be sitting quite right on your Indian tax return this New Foreign Asset Disclosure Scheme was built with exactly that situation in mind.
FAST-DS 2026, formally the Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026, came into force on 16 August 2026. It's a one-time window, contained in Chapter IV of the Finance Act, 2026, that lets eligible taxpayers come forward and regularise foreign assets or foreign income that never made it onto their Indian returns or that got left out of Schedule FA even when the money itself was perfectly legitimate. The CBDT has since published detailed FAQs covering eligibility, valuation, payment mechanics, the four prescribed forms, what happens if you already have a pending assessment, and the immunity you get once a declaration is accepted and paid for.
Declarations can be filed electronically up to 31 December 2026, and not a day after. For a lot of returning NRIs and former expats, this is arguably the most consequential compliance window of the year but only if you understand which of the scheme's two very different tracks you actually fall into, because getting that wrong can be the difference between paying a flat ₹1 lakh and paying 60% of the asset's value.
FAST-DS isn't a single flat-rate amnesty. It splits into two categories that behave completely differently, and almost every mistake we expect to see this year will come from someone assuming they're automatically in the cheaper one.
This is for situations where an asset sitting outside India, or foreign income chargeable to tax in India, was never properly explained or offered to tax in the first place. The CBDT FAQ defines an undisclosed foreign asset as one where the source of investment isn't satisfactorily explained. If the aggregate value of these undisclosed assets and income doesn't exceed ₹1 crore, you can regularise them by paying 30% tax plus an additional amount equal to 100% of that tax which works out to 60% of the declared amount. The FAQ's own worked example makes the arithmetic concrete: a ₹60 lakh undisclosed foreign bank account plus ₹20 lakh of undisclosed foreign income comes to ₹80 lakh, and 30% tax (₹24 lakh) plus the matching additional amount (another ₹24 lakh) means a total payment of ₹48 lakh.
This is the one that actually matters for most returning NRIs, and it's a different animal entirely. It applies where an overseas asset's source was already explained or already taxed, or where the asset was acquired while you were genuinely non-resident but it simply never got disclosed in the relevant schedule of your Indian return afterward. As long as the aggregate value of these assets stays under ₹5 crore, the entire liability is a flat ₹1,00,000, regardless of how large the underlying asset actually is within that ceiling.
Picture someone who spent twelve years working in California: paid US salary, paid US taxes, built up a 401(k), got RSUs from their employer, bought a home, kept a US brokerage account running. None of that money has anything to do with hidden Indian income it was earned and taxed abroad, entirely legitimately. The problem shows up only after they move back to India, become a resident again, and file returns without properly listing one or more of those assets in Schedule FA. That's a fundamentally different fact pattern from someone who quietly earned taxable foreign income and never told anyone, and Category 2 exists specifically to give the first group a proportionate way out
This is one of the biggest misconceptions people have. Buying an asset while you were a non-resident does not automatically mean you are exempt from disclosing it in India today. What actually matters is a chain of facts: when the asset was acquired, what your residential status was that year, when you became an Indian resident, what happened to the asset afterward, whether it (or its income) ever showed up in your Indian returns, whether the source was already taxed or explained, and what the asset is worth under FAST-DS's own valuation rules. The FAQ does explicitly allow people who are currently non-resident, or RNOR, to file a declaration if they were resident in India during the year the income arose or the asset was acquired so being an NRI today doesn't automatically rule you in or out either. Your current residential status is simply the wrong question. The right question is what your status was in the year the asset came into existence.
Eligibility for the Fast-Ds Declaration isn't limited to people who are currently living in India. The FAQ recognises two groups: anyone who was resident in India in the relevant previous year, and anyone who is currently non-resident or RNOR but was resident in India during the year connected to the undisclosed income or the acquisition of the asset. Your residential status for that relevant year gets stated directly in Form 1. In practical terms, this means a current NRI can still potentially use the scheme you just can't answer the question by looking at where you live today. You have to go back and establish your status in the specific year the income arose or the asset was bought.
If you've lived abroad, a proper FAST-DS review has to look well beyond the obvious checking account. For US-connected taxpayers, that means checking and savings accounts, brokerage accounts, 401(k)s, traditional and Roth IRAs, other employer retirement plans, US stocks, ETFs and mutual funds, RSUs, ESOPs, NSOs and ISOs (including shares received after exercising options and any employer stock), foreign property and rental property, partnership interests, insurance or investment products, and any dividends, interest, capital gains or rental income those assets threw off.
A specific warning belongs here for equity compensation. "My RSUs were already taxed in the US" or "the ESOP came from my employer, so it isn't a foreign asset" are both non-answers. Taxation of the compensation itself and the separate question of foreign-asset disclosure are not the same thing, and the correct analysis turns on details like whether the award had vested, whether shares were actually issued, whether options were exercised, whether anything was subsequently sold, where the custodian account sits, your Indian residential status at each of those moments, and whether the underlying income was reported here. RSU, ESOP, NSO and ISO holdings genuinely need to be reviewed one by one rather than treated as a single generic bucket.
For Canada, the review list runs to bank and brokerage accounts, Canadian shares and ETFs, RRSPs, TFSAs, employer retirement plans, pension interests, property (including rental property), other investment accounts, and the usual dividends, interest and capital gains. Don't assume an RRSP falls outside the analysis just because it's labelled a retirement account; its legal nature, ownership and Indian tax treatment all need to be worked through.
UK-connected taxpayers should look at bank accounts, ISAs and other investment accounts, brokerage holdings, workplace pensions and SIPPs, other pension interests, UK shares, property and rental property, and any related investment income. Singapore returnees should check bank and brokerage accounts, investment portfolios, shares, CPF-related interests where relevant, insurance or investment products, property and rental income. And the same logic extends to assets built up in the UAE, Australia, Germany, France, Switzerland, the Netherlands, Ireland, Japan, Hong Kong, New Zealand or anywhere else FAST-DS is not a US-specific scheme. The US just shows up disproportionately often because of how many Indian professionals have worked and invested there; the statute itself is written around foreign assets and foreign income, not the country they happen to sit in.
A US house or condo, a Canadian home, UK or Dubai property, Singapore property, something inherited from abroad, a jointly owned property, a rental unit real estate tends to be the single largest asset on many of these lists, and it's also where the Category 1 vs. Category 2 line gets drawn most sharply. If the property was bought while you were genuinely non-resident and the source of funds is legitimate, the facts may well fit the ₹5 crore Category 2 framework. But if the source itself was never explained, or the underlying income was taxable in India and never reported, the same property can push you into Category 1 instead. That's why documenting exactly where the purchase money came from is so central to this whole exercise.
Every FAST-DS declaration gets valued as of a single fixed date 31 March 2026, and this shows up in several places that trip people up.
The general rule for fair market value is the higher of the cost of acquisition or what the asset would fetch on the open market on that date, subject to asset-specific rules. For real estate, the FAQ points to the same higher-of-cost-or-market-value logic, with valuation reports from recognised valuers where a proper valuation is done. For listed shares, the methodology looks at market prices around the valuation date; unquoted shares use a prescribed formula tied to the company's asset values.
There's a useful cushion: a variance of up to 20% from the declared FMV, on its own, doesn't invalidate a declaration on grounds of misrepresentation or false particulars. That's not licence to guess; it means honest, careful estimates aren't punished for being imprecise.
Foreign bank accounts have their own valuation rule. The value isn't simply "the balance on 31 March 2026." The FAQ sets out a methodology based on deposits made from the date the account was opened through to the valuation date, with prescribed exclusions, including adjustments where money is withdrawn and later redeposited so it isn't counted twice. The same anti-double-counting logic applies when one asset's sale proceeds fund another.
On currency, everything ultimately gets expressed in Indian rupees. Designated currencies use the RBI's reference rate on the valuation date; anything not designated gets converted to US dollars first and then into rupees via the RBI rate. Don't use today's USD/INR or CAD/INR rate for an old asset; the conversion has to follow the prescribed mechanics through 31 March 2026.
The ₹1 crore and ₹5 crore thresholds are themselves valuation questions, not just payment questions. What matters is the value under FAST-DS's prescribed rules, which can differ from a brokerage statement or property estimate. This applies to private shares, property, bank accounts and partnership interests, meaning valuation can affect whether you're eligible at all, not just how much you owe.
FAST-DS is not a "pay ₹1 lakh and move on" filing. Form 1 requires supporting documentation that evidences how the asset was acquired or the income was earned, plus valuation documentation wherever a formal valuation was carried out. For US assets, that generally means W-2s, US tax returns, brokerage and 401(k)/IRA statements, employer equity and RSU vesting statements, ESOP documentation, option exercise records, stock sale statements, property closing and mortgage records, and bank, dividend and interest statements. For Canada, think T4s, Canadian tax returns, RRSP and TFSA statements, brokerage statements, property documents, pension records and bank statements. UK filers should be pulling together P60s or P45s, pension and SIPP statements, brokerage statements, ISA records, property documents and bank statements, and the same general categories employment records, tax returns, bank and brokerage statements, investment statements, property documents and retirement-account statements apply for Singapore, the UAE and other jurisdictions.
Building this evidence file asset by asset, well before you're anywhere near the deadline, is genuinely the difference between a smooth filing and a scramble.
Everything happens electronically through Form 1, and you're not limited to filing one asset at a time. A single Form 1 can carry multiple assets and income items across multiple countries through its various sections and annexures. A taxpayer with a US 401(k), a US brokerage account, RSUs, a Canadian RRSP, a UK pension and US property doesn't need six separate filing decisions; all of it gets mapped into one coherent submission.
Behind the scenes, this typically means building a full inventory of foreign assets and income, working out residential status year by year, determining which category each item falls into, calculating value under the FAST-DS rules, and pulling together the supporting documents before Form 1 ever goes in. Once it's filed, the tax authority reviews the declaration and communicates the amount payable through Form 2, which the FAQ says must go out within one month of the end of the month in which the declaration was made. From there, you get an initial two-month window (from the end of the month Form 2 arrives) to pay, plus an optional further two months at 1% simple interest per month or part month for the delay. The absolute outer limit is four months from the end of the month Form 2 was issued miss that, and the scheme's benefit lapses for that declaration. Payment gets confirmed through Form 3, and once that's accepted, the authority issues Form 4 the formal certificate of acceptance within one month of receiving Form 3. Form 4 is the document that actually matters long-term, since it's what evidences the acceptance the whole scheme is built around.
Once a valid declaration is filed and paid, it buys immunity from further tax, penalty and prosecution under the Black Money Act in respect of the declared asset or income, and the declared amount doesn't get added back into your total income under either the Income-tax Act or the Black Money Act, in the manner the scheme specifies.
What it doesn't buy you is a do-over. Once payment is made, you cannot come back later seeking a refund, rectification, revision, set-off or appellate relief on that declared amount; the FAQ is explicit that these routes are closed off. Which is really the practical takeaway: get the analysis right before Form 1 goes in, not after the payment clears.
Getting a notice, inquiry or information request about a foreign asset doesn't automatically disqualify you from filling FAST-DS. Where assessment proceedings are already pending under the Income-tax Act or the Black Money Act, the Assessing Officer is required to take a FAST-DS declaration into account when finalising that assessment. The one hard line is a completed Black Money Act assessment once that's done, the scheme is no longer available for that particular matter. So if you've received any kind of communication, the right move is to check your eligibility now rather than sit and wait for the proceedings to conclude on their own.
Two categories sit outside the scheme entirely. Income or assets that represent proceeds of crime, where proceedings are pending or initiated under the Prevention of Money-Laundering Act, 2002, are excluded. And assets or income tied to an assessment year where a Black Money Act assessment has already run its course are excluded too; there's no reopening that through FAST-DS.
There's a second, entirely distinct 2026 development that's easy to conflate with FAST-DS: retrospective relief from prosecution for non-disclosure of certain non-immovable foreign assets, where the aggregate value doesn't exceed ₹20 lakh, effective from 1 October 2024. If your only real issue is a technical non-disclosure and the asset in question falls under that threshold, you may not need FAST-DS at all that's a separate statutory analysis that should be run first, before assuming a payment under FAST-DS is the answer. And even where FAST-DS turns out not to be necessary, it's still worth reviewing your future Indian returns to make sure the disclosure gets fixed going forward.
A quick way to keep the two apart: a legitimate foreign asset that was simply left off Schedule FA generally points toward FAST-DS Category 2; a non-immovable asset worth ₹20 lakh or less points toward the separate statutory relief; genuinely undisclosed foreign income or an asset with an unexplained source points toward Category 1; anything over ₹5 crore falls outside Category 2 altogether; undisclosed amounts over ₹1 crore fall outside Category 1; and a completed Black Money Act assessment or a live PMLA issue takes FAST-DS off the table regardless of size.
The Income Tax Department has been surfacing more foreign-source information through AIS and the Foreign Assets Information (FAI) mechanism, built on international information-exchange arrangements, something we covered in more depth in our earlier piece on FAI, AIS and FAST-DS. But there's an important distinction to hold onto: AIS reflects information the Department happens to have received, not an exhaustive record of everything you own abroad. An asset missing from AIS doesn't mean it's off the hook for reporting and conversely, if something does show up in AIS that you haven't reported, that's a strong signal worth reconciling immediately. Treat AIS as a cross-check, not a substitute for properly completing Schedule FA and Schedule FSI.
Which is worth restating plainly: FAST-DS doesn't retire Schedule FA. Foreign assets still need to be reported there going forward, and foreign income still belongs in Schedule FSI alongside any foreign tax credit claims. A thorough FAST-DS exercise really works backward through the whole chain past ITRs, Schedule FA, Schedule FSI, AIS/FAI data, foreign account and brokerage statements, foreign tax returns, source documents, and finally the current asset position rather than starting and ending with a single form.
A handful of assumptions keep surfacing, and each one is worth naming directly: assuming NRI-era purchases are automatically exempt (that's only the starting point of the analysis, not the conclusion); writing off retirement accounts like a 401(k), IRA, RRSP or UK pension as "not really foreign assets" without examining their actual legal and tax character; treating already-taxed RSUs as settled, when compensation tax and asset-disclosure obligations are separate questions; assuming an unsold shareholding can't create a disclosure issue, when it plainly can; trusting that something missing from AIS means it's fine, when AIS is known to be incomplete; valuing a foreign property at its original purchase price rather than under FAST-DS's actual valuation rules; planning to file first and chase documents later, when Form 1 requires the evidence up front; assuming the ₹5 crore ceiling means anything under it qualifies for the flat fee, when Category 2 only applies to the specific circumstances the law sets out; assuming a notice automatically disqualifies you, when pending proceedings and completed assessments are treated very differently; and probably the most costly one deciding to deal with all of this in December, when historical bank and brokerage records, retirement statements, property valuations, employer equity records and foreign tax returns can take institutions weeks to produce.
A 401(k) built over ten years in the US. Someone worked in the US for a decade, built up $300,000 in a 401(k) while paying US tax on their employment income, then returned to India, became resident again, kept the account open, and never mentioned it in their Indian foreign-asset disclosures. The answer here is never simply "401(k) equals ₹1 lakh." It genuinely depends on working through the account's legal nature and ownership, the contribution history and the residential status in each of those years, how it was taxed, whether it was acquired while non-resident, whether Schedule FA requirements were met, what it's worth under the FAST-DS rules, and whether it actually satisfies the Category 2 conditions before landing on a position.
RSUs from a California employer. A technology employee received RSUs while working in California, watched them vest over several years, sold some and kept others in a US brokerage account, then moved permanently to India without reporting the remaining shares in Schedule FA. Untangling this means working out when the compensation arose, when ownership of the shares began, what their Indian residential status was at each stage, whether the compensation itself was reported, whether the brokerage account and any dividends or capital gains were disclosed, what the source of the investment was, and whether the facts ultimately fit Category 2 which is exactly why RSU, ESOP, NSO and ISO situations tend to need a coordinated India-US analysis rather than a quick answer.
A New Jersey home bought during NRI years. Someone bought a house in New Jersey in 2017 while working and paying tax in the US, returned to India in 2025, became resident, and never listed the property in Schedule FA. If the source of the purchase money is fully explainable, this is precisely the kind of case that may fit the Category 2 framework subject to residential status, the acquisition and reporting history, valuation, and the ₹5 crore ceiling. It's also a good illustration of why FAST-DS needs to be worked through properly before assuming the Black Money Act's default, harsher consequences automatically apply.
Strip away the forms and the FAQs, and everything comes down to two questions. First: was the foreign asset or income itself undisclosed meaning the source was never properly explained or taxed? If so, you're looking at the ₹1 crore Category 1 route and a potential 60% payment. Second: was the asset legitimate, already taxed or explained, or acquired while you were genuinely non-resident, with the only real failure being that it never got reported? If that's the case, you're in ₹5 crore Category 2 territory, where the fee is a flat ₹1 lakh. Getting this classification right not finding the cheapest-sounding option is the entire game.
At Dinesh Aarjav & Associates, we treat FAST-DS less like a routine tax filing and more like a forensic reconstruction of someone's global financial history. That starts with mapping every foreign asset and income stream, then building a year-by-year picture of Indian residential status, making this review especially important as part of NRI Returning to India Consultancy, then tracing each asset back to its source foreign salary, already-taxed income, savings, inheritance, gifts, the sale of another asset, or other legitimate origins. From there we go back through historical ITRs, Schedule FA and Schedule FSI entries, foreign tax credit claims and prior disclosures, reconcile all of that against whatever AIS and FAI data is available, work out which category (if any) each item actually falls into, apply the prescribed valuation methodology as of 31 March 2026, assemble the supporting documentation Form 1 will need, and carry the filing through Form 1, Form 2, payment, Form 3 and finally Form 4.
Calling FAST-DS just an "amnesty" undersells what it actually offers a returning NRI. The real value usually isn't the tax arithmetic it's the ability to put a defensible, well-documented position under a legacy overseas asset that was earned honestly abroad but never made it onto an Indian return after residency changed. That's why source documentation, residential-status history, valuation and Schedule FA history all matter as much as they do, making professional NRI Advisory Services an important part of the process.
If you've lived abroad, the question to ask isn't "do I have a foreign bank account?" It's broader: what foreign financial and non-financial assets did you accumulate during your years outside India, and what happened to each one after you became an Indian tax resident again? That list can run from a 401(k), IRA, RRSP or UK pension through Singapore accounts, brokerage holdings, RSUs, ESOPs, NSOs and ISOs, to foreign shares, property, inherited assets and foreign income. The fact that any one of those was earned legally, funded from foreign salary, already taxed overseas, sitting untouched in a retirement account, or never sold doesn't by itself answer the Indian disclosure question that still has to be worked through asset by asset.
Before 31 December 2026, the practical checklist is straightforward even if the underlying analysis isn't: list every foreign asset, note the country and institution holding it, pin down when you acquired it, work out your Indian residential status for that year, trace the source of funds, go back through every historical ITR and Schedule FA entry, check Schedule FSI and foreign-income reporting, reconcile whatever AIS or FAI information exists, value everything as of 31 March 2026 under the FAST-DS rules, and only then decide whether and where FAST-DS applies to you.
FAST-DS 2026 opened on 16 August 2026 and closes for good on 31 December 2026. For Category 1 cases, the payment can run as high as 60% of the declared amount; for qualifying Category 2 cases, it's a flat ₹1 lakh. The gap between those two outcomes isn't a matter of picking whichever sounds cheaper it depends entirely on the facts, the source of the asset, your residential status history, what was and wasn't reported, and how the asset values out under the scheme's own rules. If you're a returning NRI with US, Canadian, UK, Singapore, UAE or other overseas assets that never quite made it onto an Indian return, the smart move isn't to wait until December it's to get your foreign-asset history reconstructed now, because the real question was never "how much do I have to pay?" It's "which category am I actually in, and what is my foreign asset legally worth under the FAST-DS rules?"
Also Read:
Aarjav Jain is the Executive Director at Dinesh Aarjav & Associates, specializing in India–US cross-border transactions, NRI taxation, international tax advisory, and global investment structuring. With over 10 years of experience in project financing and cross-border advisory, he assists NRIs and businesses with regulatory compliance, repatriation planning, and international transaction structuring.
Stay in the loop, subscribe to our newsletter and unlock a world of exclusive updates, insights, and offers delivered straight to your inbox.
.webp)
