Foreign asset disclosure scheme opens on 16 Aug, taxpayers face 60 pc levy

The income tax department on Saturday, 15 August said declarations under the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) can be filed till 31 December, with taxpayers required to pay 30 per cent tax plus an additional levy of an equal amount.

The scheme for voluntary disclosure of foreign assets by small taxpayers such as students, young professionals, tech employees and relocated NRIs was announced in the 2026-27 Budget.

Notifying the rules for the scheme on Saturday, the Central Board of Direct Taxes (CBDT) said the scheme 'enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee'.

The scheme comes into effect from Sunday, 16 August and online declarations can be filed until 31 December. The fair market value of assets proposed to be declared is to be computed as on 31 March 2026.

There are two broad categories for filing a declaration under the scheme. First, an undisclosed asset located outside India or undisclosed foreign income that was not offered to tax. The aggregate value of the undisclosed asset in this case should not exceed Rs 1 crore.

Second, for an asset located outside India that was already offered to tax or was acquired when the assessee was a non-resident, but was not declared in the relevant Schedule of the return, a monetary threshold of Rs 5 crore has been set for such declarations. A fee of Rs 1 lakh would be levied on such declarations.

The total amount payable would be the aggregate of: (i) tax of 30 per cent of the value of the undisclosed foreign asset or income declared; and (ii) an amount equal to the tax paid.

Giving an example, the CBDT, in an FAQ, said that where an undisclosed foreign bank account is valued at Rs 60 lakh and undisclosed foreign income is Rs 20 lakh, the aggregate tax payable would be Rs 48 lakh.

Declarations under the scheme will also give immunity to the assessee from the levy of any further tax or penalty, and from prosecution, under the Black Money Act, 2015, in respect of the income or asset so declared.

Further, the income or amount of investment in the asset declared under this scheme shall not be included in the total income of the taxpayer under the Income-tax Act, 1961, or the Black Money Act, 2015.

With PTI inputs