New Delhi: The Income Tax Department has announced a voluntary disclosure initiative allowing small taxpayers to regularize undisclosed foreign income and assets without facing prosecution or additional penalties. Introduced as part of the Union Budget, the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) opens for online declarations on Sunday and will remain accessible through December 31, 2026.
Administered by the Central Board of Direct Taxes, the compliance window is primarily aimed at individuals who may have unintentionally omitted overseas holdings, such as students, young professionals, technology sector employees, and returning Non-Resident Indians. The framework establishes two distinct categories for declarations based on the nature and prior tax treatment of the foreign assets.
Under the first category, taxpayers can declare previously untaxed foreign income or assets up to a maximum threshold of Rs 1 crore by paying an effective 60 per cent tax rate. For instance, a taxpayer declaring an overseas bank balance of Rs 60 lakh alongside undisclosed foreign income of Rs 20 lakh would pay a total tax of Rs 48 lakh. The second category applies to assets up to Rs 5 crore that were acquired while residing abroad or previously subjected to tax but omitted from the relevant tax return schedule, requiring a flat fee of Rs 1 lakh.
Taxpayers submitting valid declarations under the scheme will receive full immunity from penal proceedings and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Furthermore, the authorities clarified that declared amounts will not be incorporated into the taxpayer’s aggregate income under either the Black Money Act or the Income-tax Act, 1961.
