Foreign Assets of Small Taxpayers- Disclosure Scheme Rules 2026 notified

Foreign Assets of Small Taxpayers- Disclosure Scheme Rules 2026 notified. Rule come into force on the 16th day of August, 2026.

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (in short, “FAST-DS”) is a one-time voluntary compliance mechanism introduced under Chapter IV (running from Sections 130 to section 144) of the Finance Act, 2026 (4 of 2026).

The purpose of the Scheme is to provide an opportunity to small taxpayers to file a declaration making disclosure of undisclosed asset located outside India or undisclosed foreign income and pay the amount of tax thereon.

The “undisclosed asset located outside India” has bene defined to mean an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in such asset or the explanation given by him, is in the opinion of the Assessing Officer, unsatisfactory. The “undisclosed foreign income” means the total amount of income of an assessee from a source located outside India which was chargeable to tax in India but has not been offered to tax under the Income-tax Act, 1961.

The income or the amount of investment in an asset, which is declared shall not be included in the total income of the declarant for any assessment year under the Income-tax Act, 1961 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Further, a declarant under this scheme shall have immunity from the levy of any further tax or penalty and also from prosecution in respect of income or asset so declared, for the previous year ending on the 31st March, 2026 or any earlier previous year.

To facilitate the FAST-DS, the Central Government has notified the Foreign Assets of Small Taxpayers- Disclosure Scheme Rules, 2026. They shall come into force on the 16th day of August, 2026.

The Rules, inter alia provide for the determination of the fair market value of each type of foreign assets and various Forms i.e. Form-1 for Declaration under Rule 5, Form-2 Order under Rule 6, Form-3 Intimation of Payment under Rule 7, Form-5 Order certifying validity of declaration.

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