Avoid Black Money Act Penalties | One-Time Amnesty for NRIs & Returning Indians

The Finance Bill, 2026 has introduced one of the most important compliance schemes for NRIs in the last decade — the FAST-DS 2026 (Foreign Assets of Small Taxpayers Disclosure Scheme, 2026).

This one-time disclosure scheme allows NRIs, returning NRIs, RNORs, and resident Indians to disclose undisclosed or incorrectly reported foreign assets and foreign income and obtain complete immunity from penalty and prosecution under the Black Money Act.

If you have ever worked abroad, held a foreign bank account, received ESOPs/RSUs, or owned overseas property, this scheme is extremely critical.

What is FAST-DS 2026? (Foreign Asset Disclosure Scheme – Budget 2026)

FAST-DS 2026 is a special amnesty-style compliance window introduced under Chapter IV of the Finance Bill, 2026, specifically targeting small taxpayers with foreign asset reporting lapses.

It addresses:

• Undisclosed foreign assets
• Undisclosed foreign income
• Missed Schedule FA reporting
• Errors in Schedule FSI
• Legacy overseas assets of returning NRIs

In return for voluntary disclosure, the Government grants:

• Immunity from prosecution
• Immunity from penalty
• No reopening of completed assessments

Why FAST-DS 2026 is a BIG DEAL for NRIs

For NRIs and returning Indians, foreign asset reporting rules make foreign asset compliance the biggest tax risk today.

Under the Black Money (Undisclosed Foreign Income and Assets) Act:

• Penalty is ₹10 lakh per year per asset
• Prosecution can lead to 7 years of imprisonment
• No time limitation
• Ignorance is NOT a defence

FAST-DS 2026 is effectively a last chance to clean up past mistakes legally.

Two Categories, Two Routes to Immunity (MOST IMPORTANT SECTION)

FAST-DS 2026 operates through two distinct categories, depending on the nature of non-compliance.

Category A: Undisclosed Foreign Income / Undisclosed Foreign Assets

This applies where:

• Foreign assets or income were never disclosed
• Tax was never paid
• Exposure exists under the Black Money Act

Eligibility

• Total foreign asset value up to ₹1 crore
• Fair Market Value (FMV) to be computed

Amount Payable

• 30% tax on FMV
• 30% penalty on FMV
  • Total payout: 60% of FMV

What You Get

• Immunity from prosecution
• No further penalty
• No reassessment for disclosed assets

Amount paid is non-refundable.

Category B: Tax Paid, Disclosure Missed (Most NRI Cases Fall Here)

This is the largest and most common NRI mistake.

Applies where:

• Foreign income was already taxed (India or overseas)
• But Schedule FA / Schedule FSI was not reported in ITR
• Often happens due to lack of awareness

Eligibility

• Foreign asset value up to ₹5 crore
• Reporting lapse only (not tax evasion)

Amount Payable

• Flat ₹1,00,000 fee
• No tax recomputation
• No FMV tax

What You Get

• Immunity from penalty
• Immunity from prosecution
• Clean compliance history

This is a huge relief for honest NRIs.

What Exactly Must Be Disclosed Under FAST-DS 2026?

Under the scheme, taxpayers must fully and accurately disclose:

Foreign Assets

• Foreign bank accounts (including dormant or zero-balance accounts)
• Overseas brokerage or custodial accounts
• Foreign shares, stocks, ESOPs, RSUs
• Foreign mutual funds, ETFs
• Overseas real estate or immovable property

Foreign Income

• Interest income from foreign accounts
• Dividend income from overseas investments
• Capital gains from foreign shares or property
• Any income linked to foreign assets

Mandatory ITR Reporting Requirements (Critical for Validity)

Disclosure must be done through:

• Schedule FA (Foreign Assets)
• Schedule FSI (Foreign Source Income)

Applicable returns:

• ITR-2
• ITR-3

Incorrect schedules = invalid disclosure
Partial disclosure = loss of immunity

Special Relief for Minor & Inadvertent Non-Disclosures (₹20 Lakh Rule)

The Finance Bill, 2026 also provides relaxation in prosecution for:

• Foreign assets other than foreign immovable property
• Aggregate value up to ₹20 lakh
• Non-disclosure was minor and unintentional

This relief is particularly relevant for:

• Old salary bank accounts
• Small overseas investments
• Forgotten foreign deposits

Relief applies only if corrected now.

What Happens If You Ignore FAST-DS 2026?

If you skip this window:

Black Money Act Consequences Resume

• ₹10 lakh penalty per year per asset
• Penalty repeats every year
• Criminal prosecution
• Imprisonment up to 7 years
• No amnesty later

The cost of ignoring FAST-DS 2026 is financially and criminally devastating.

FAST-DS 2026 Checklist for NRIs & Returning NRIs

Before opting for the scheme, NRIs and Nri returning to india should:

• Review past Indian income tax returns
• Check if Schedule FA was ever skipped
• Trace old foreign bank accounts, even dormant ones
• Revisit ESOPs, RSUs, foreign shares, ETFs
• Verify foreign salary slips & tax statements
• Identify correct category:
  • Category A – Undisclosed income/assets
  • Category B – Tax paid, disclosure missed

Professional Advice is Strongly Recommended

FAST-DS 2026 filings are:

• Irrevocable
• Non-refundable
• High-risk if wrongly categorised

A wrong filing can:

• Cancel immunity
• Trigger scrutiny
• Invite Black Money Act action

Rule of Thumb for NRIs

If in doubt, disclose.
Compliance under FAST-DS 2026 is far cheaper than prosecution under the Black Money Act.

Why Choose Dinesh Aarjav & Associates for FAST-DS 2026?

At Dinesh Aarjav & Associates, we specialise in:

• NRI & Returning NRI Taxation
• Foreign Asset Disclosures
• Black Money Act Risk Mitigation
• FAST-DS 2026 Advisory & Filings
• India–US / UK / Canada / UAE Cross-Border Tax

We handle:

• Asset tracing
• FMV computation
• Correct category selection
• End-to-end compliance
• Defence-ready documentation

Final Word

FAST-DS 2026 is not optional for NRIs with foreign assets.
It is a once-in-a-lifetime compliance reset.

If you miss this window, penalties turn brutal and irreversible.

Reach out to us now before the disclosure window closes.

Also Read:

Budget 2026: Major Relief for NRIs Selling Property in India – TDS Compliance Simplified

How Much Gold Can an NRI Bring to India in 2026? Latest Budget 2026 Update on Gold Jewellery

Budget 2026–27: Major Tax & Compliance Relief for NRIs – LRS, Foreign Assets Disclosure, ITR Revision & More

Form 67 Filing for Foreign Tax Credit: ITAT Confirms DTAA Relief Cannot Be Denied for Procedural Delay