India Tax Amnesty Scheme 2026: Small Taxpayers Can Declare Undisclosed Foreign Assets

Why in News?

The Government of India has launched the Foreign Assets of Small Taxpayers-Disclosure Scheme, 2026 (FAST-DS) to provide a one-time opportunity to eligible small taxpayers to disclose certain previously undisclosed foreign income and assets.

Key Features

Two Disclosure Routes

1. Foreign Income/Assets up to ₹1 Crore

• Eligible taxpayers can disclose certain undisclosed foreign income or assets up to ₹1 crore.
• They are required to pay:
  • 30% tax
  • 30% penalty
• Therefore, the combined liability is effectively 60% of the declared amount.

Example:

• For an eligible undisclosed amount of ₹80 lakh:
• Tax = ₹24 lakh
• Penalty = ₹24 lakh
• Total = ₹48 lakh

2. Specified Foreign Assets up to ₹5 Crore

• A separate route covers certain specified foreign assets with an aggregate value of up to ₹5 crore.
• It may cover cases where the underlying income was already taxed in India or where the asset was acquired when the taxpayer was a non-resident but was not subsequently reported.
• Eligible taxpayers can regularise such assets by paying a one-time flat fee of ₹1 lakh, subject to the prescribed conditions.

Valuation of Foreign Assets

• The value of eligible foreign assets will generally be determined with reference to 31 March 2026.
• Different valuation methods apply to different assets, including:
  • Foreign bank accounts
  • Jewellery and artwork
  • Quoted securities
  • Unquoted shares
  • Foreign immovable property
• Foreign-currency values are converted into Indian rupees using the applicable RBI reference rate as of 31 March 2026.

Who Can Benefit?

• The scheme is primarily aimed at small taxpayers and may cover eligible:
• Resident taxpayers
• Resident but Not Ordinarily Resident (RNOR)
• Non-Resident Indians (NRIs), subject to conditions
• Students and other small taxpayers
• It can address cases involving non-disclosure of foreign assets/income or certain reporting failures.

Exclusions

• The scheme does not cover certain cases, including:
• Proceeds of crime where proceedings under the Prevention of Money Laundering Act (PMLA) have already been initiated.
• Cases where assessment under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has already been completed.
• Assets exceeding the prescribed monetary limits.

Immunity

• After making a valid declaration and completing the prescribed payment, eligible taxpayers can receive immunity from further tax, penalty and prosecution under the Black Money Act, 2015 in relation to the disclosed assets/income.
• However, such immunity does not extend to excluded cases such as proceeds of crime or already-finalised proceedings.

Significance

1. Promotes Voluntary Compliance

• It gives small taxpayers an opportunity to correct past foreign-asset reporting omissions.

2. Tackles Undisclosed Foreign Wealth

• The scheme seeks to bring eligible overseas assets and income within India's tax-compliance framework.

3. Strengthens International Tax Transparency

• India already participates in international information-sharing mechanisms such as the Common Reporting Standard (CRS) and information exchange under Double Taxation Avoidance Agreements (DTAAs).

4. Reduces Compliance Burden

• A limited-time disclosure mechanism can help resolve smaller cases without prolonged tax disputes.

FAQs: Foreign Assets of Small Taxpayers Disclosure Scheme, 2026