Foreign Asset Amnesty Scheme 2026 for returned NRIs, Small Business Owners, Overseas Students & Professionals – Eligibility, Tax Calculation & Immunity from Black Money Act

Background

Under the prevailing law, there is a requirement of reporting foreign income and assets in the ITR by Resident tax payer. Under Black Money Act 2015 (for more read https://www.nritaxservice.in/blog/2024/03/05/nris-black-money-act-implications), there are stringent penal provisions for non-compliance with such reporting. Many taxpayers had unknowingly defaulted with these reporting provisions. Income tax department have received the information of foreign assets from the other countries tax department under information exchange treaty between two countries. On that basis, the deptt have identified the defaulters. Hence, these defaults have attracted enquiry proceedings in many cases and many others may be initiated in due course of time. Now, when taxpayer have come to know about these provisions they are duly reporting their foreign assets in the latest year ITRs and updating the recent year ITRs also. However, updating of ITR is not possible for more then 4 years. Hence, these small taxpayers were under radar of facing investigation proceeding for simple mistake. Most of these small taxpayers were in the category of Returned NRIs & OCIs, Students who went abroad for studies, Employees who got RSUs/ESOPS of foreign companies etc

Now, in Budget 2026, on the basis of number of data available, Finance Ministry has proposed a very needed amnesty scheme for small taxpayers who have missed reporting their foreign income and assets in earlier year ITRs. The scheme is ‘Foreign Assets of Small Taxpayers Disclosure Scheme 2026’ (FAST DS 2026). This scheme will not only ease out the compliance process for the taxpayer but also provide immunity from penalty and prosecution proceedings. This scheme is a limited time opportunity for assessees to disclose foreign assets or foreign income which they have not disclosed due to unawareness of the provisions. As we know, under the Indian taxation laws, non-disclosure of income or assets attracts heavy penalty and prosecution. Hence, this scheme is an opportunity to come out clean from such penalties and prosecution.

What is ‘Foreign Assets of Small Taxpayers Disclosure Scheme 2026’(FAST DS 2026)?

FAST DS 2026 is applicable to those eligible taxpayers who failed to disclose specified foreign income and assets in their ITR i.e. either not taxed or not reported in ITR. Union Budget 2026 has provided such taxpayers a one-time opportunity to disclose the same. The taxpayers can, upon the payment of tax or fee, get complete immunity from penalties and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

When This FAST DS 2026 Scheme Will Start?

The date of commencement and end of this scheme shall be the date as may be notified by the Central Government in the Official Gazette.

Who can make declaration under FAST DS 2026?

Any person who is or was a resident in India in the relevant period and fulfils the conditions of this scheme can make a declaration. Any person who was a resident in India when such undisclosed foreign income accrued or when foreign asset was acquired, but is now a non-resident in India, can also make such declaration under FAST DS 2026. In many cases, this scheme will be beneficial for

India Returned NRIs/OCIs having undisclosed foreign assets , bank accounts, insurance policies, etc.
Recipient of ESOPs or RSUs from foreign employers who missed reporting of such assets, etc.
Foreign bank accounts of students returning to India after completing their studies abroad
Personnel gone abroad on deputation

What kind of income or assets are to be disclosed under FAST DS 2026?

Any foreign income or assets located outside India which has been missed from reporting
Specified foreign assets acquired from foreign income when assessee was a non-resident
Specified foreign assets acquired from income already offered to tax in India, which have not been reported in ITR

What is ‘undisclosed foreign income’?

Income from a source located outside India, which should have been taxed in India, but not offered to tax in India is ‘undisclosed foreign income’.

What is ‘undisclosed assets located outside India’?

Any asset located outside India, held by the assessee as owner or beneficial owner, for which he is unable to offer any explanation regarding source of investment in such asset is ‘undisclosed asset located outside India’. Assets also include financial interest in any entity. Further, the value of such assets shall be determined as per the valuation rules given in the scheme, having regard to the nature of asset and relevant valuation date.

What is the eligibility of the scheme? What is monetary value of undisclosed foreign income or assets where this scheme will apply?

This scheme applies on following two cases

where the aggregate value of ‘undisclosed foreign income’ and/or ‘undisclosed assets located outside India’ does not exceed Rs One Crore as on March 31, 2026, or
where there is no undisclosed foreign income i.e. where foreign assets are acquired from income disclosed by assessee or when such assessee was non-resident, the value of such asset must not exceed Rs Five Crore as on March 31, 2026.

How much tax or fees assessee has to pay upon declaration of ‘undisclosed assets located outside India’ or ‘undisclosed foreign income’?

The assessee has to pay aggregate of following

30% of the value of undisclosed foreign asset as on March 31, 2026
30% of undisclosed foreign income
100% of (a) + (b)

Effectively, the total amount payable by the assessee is 60% of aggregate value of undisclosed foreign assets and undisclosed foreign income. However, this window is subject matter of eligibility that total value of undisclosed foreign income and assets is less than Rs 1 Crores as on March 31, 2026.

How much amount assessee has to pay while declaring undisclosed foreign assets acquired from income offered to tax?

Where an assessee had acquired a foreign asset when he was a non-resident or from income already offered to tax in India, but failed to disclose such foreign assets in relevant ITRs, then he can pay a one-time fee of Rs One Lakh under this scheme. However, this window is subject matter of eligibility that total undisclosed foreign assets value is less than Rs 5 Crores as on March 31, 2026.

Further, the fee of Rs 1 Lakh is payable only for one year and it will be deemed that disclosure of Foreign Assets have been duly made for all the years. In nutshell, only one fee of Rs 1 Lakh is to be paid for multiple years non-reporting of foreign assets.

Does the assessee need to make separate declarations in case of multiple undisclosed foreign assets or incomes?

No. Assessee can make a single declaration in respect of multiple undisclosed foreign assets or foreign incomes. However, this is subject to the eligibility according to the monetary limits specified in the scheme.

What is the process of payment of tax/fee under this scheme ?

The Assessee has to make a declaration electronically in prescribed form and verified in prescribed manner, within the period notified by the Central Government.
Once the electronic verification of eligibility and declaration has been done, the amount payable is informed by the prescribed income-tax authority within one month from the end of month in which declaration is furnished.
The amount so informed has to be paid by the declarant within a period of two months from the end of month in which order is received.
Further, an extension of two months is permitted for making this payment.
In case, the declarant is making the payment in extended period, then he has to additionally pay simple interest @1% for every month or part of month on the unpaid amount.
Upon payment and intimation thereof, an order certifying under the scheme shall be issued electronically and such order is conclusive to the matters stated therein.
Post such order, the declarant is granted immunity from levy of tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income And Assets) And Imposition of Tax Act, 2015 in respect of income or asset so declared.

What happens in case declaration filed by the assessee is found to be false or contains material misrepresentation?

In case the declaration filed by the assessee is found to contain material representation or there is suppression of facts, then such declaration is considered as void and accordingly, applicable laws apply on such assessee as if he has not filed any declaration.

Is there any situation in which this scheme shall not apply?

Yes, this scheme is not applicable in following two situations

Where income or assets are the proceeds of crime under Prevention of Money Laundering Act, 2002
Where assessment proceedings under the Black Money Act have already been completed

How can NRIs, OCIs, Seafarers, Other Non-Residents be benefitted from this scheme?

Many taxpayers, who were a Non-resident at some point of time and now returned back to India and settled in India. There is a big possibility that they have missed either completely or partly in reporting their foreign income or assets in their ITR in India. In such bonafide mistake cases, this scheme is a golden opportunity to get immunity from such defaults.

How 401K, any other retirement benefit account, can have a good connection in this scheme?

Many NRIs, OCIs, who were employed in USA and/or other countries (e.g. UK, Canada, Singapore) and now have returned back to India. In many such cases, there are taxpayers who have otherwise reported their all foreign income and assets in India ITRs, however, due to their misunderstanding they missed reporting of income and assets of 401(k) or any other foreign retirement account in Indian ITR. For them also, this scheme can be explored and penal provisions under Black Money Act can be saved.

What are the Penal Provisions for undisclosed foreign income/assets if this scheme is not opted?

In the Black Money Act 2015, there are provisions for penalty of Rs 10 Lakh per year for non-disclosure of foreign assets in ITR. Further, for undisclosed income there is a straight tax @30% and penalty 3 times of tax payable… Read more Black Money Act Provisions

FAQs – Reporting Of Foreign Assets – Black Money Act Provisions & Penalties for Non-reporting of Foreign Income / Assets

Q – I have returned back from USA 5 years back. I am duly reporting my foreign assets in India ITR. However, recently I noticed that I missed reporting of my Foreign Retirement Benefit Account in the India ITRs. I was under believe that foreign retirement account is not required to be reported. Also, I have not shown any income from these accounts in India ITR. I am based out in Chennai. What should I do now?

Ans – As per ITR form requirement and Black Money Act 2015 provisions, all foreign assets and income need to be reported in the India ITR in case of a person who is Ordinary Resident in India. Hence, in your case, you need to identify that in which year you have become Ordinary Resident in India. Your non-reporting for Non-resident and RNOR period will not attract any non-compliance provisions. In relation to those years when you are Ordinary Resident, without any further delay, you may file an Updated ITR and report foreign income and assets. Also, you can explore amnesty scheme i.e Foreign Asset Small Tax Payer – Disclosure Scheme 2026 (FAST – DS 2026) to get rid of the defaults.

Q – I am a tax payer in India. I am a resident in India and staying in Chandigarh. 2 years back I have invested in an immovable property in Dubai UAE. I remitted funds from my bank account in India and also took some loan from a bank in Dubai. The property is purchased by me in joint name of me and my wife. I have not reported it in my ITRs in India. My wife does not file ITR in India. What should I do?

Ans – You must file an Updated ITR and declare foreign assets in your and wife ITR for respective years. If there is any rental income from this property that also should be offered for taxation in the Updated ITR.

Q – What is the amnesty scheme to get rid of foreign income/assets non-reporting defaults?

If someone has not reported their foreign income or assets in the ITRs in India then heavy penal provisions as well prosecution provisions under Black Money Act 2015 will apply. To avoid it one time amnesty scheme has been announced by Finance Ministry in Budget 2026. Scheme name is FAST – DS (Foreign asset disclosure scheme – Disclosure Scheme 2026). This is a very useful scheme for small tax payers who have missed reporting of their foreign income /assets in ITR. Read more

NRI Tax, RBI Laws Services – Various Topics – By NRI Tax Service Team Team

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