Returning NRIs with unreported foreign assets have until 31 December to settle under FAST-DS, some for ₹1 lakh

Many Indians who come home after years abroad keep a foreign bank account, a pension or insurance policy, or shares from an overseas employer, and never list them in their Indian tax return. A one-time scheme now lets them clean up the record, and in many such cases the cost is a flat ₹1 lakh. The window closes on 31 December 2026.

What changed

The Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026 (FAST-DS) was created by the Finance Act, 2026. Its rules, notified on 14 August 2026 as G.S.R. 732(E), took effect on 16 August and fix 31 December 2026 as the last date for declarations. Assets are valued as on 31 March 2026.

The Finance Ministry’s memorandum on the Budget explains the aim. It names the typical cases: ESOPs or RSUs from foreign employers, dormant or low-value foreign bank accounts of former students, savings or insurance policies of returning non-residents, and assets of people on overseas postings. It adds that data received under the automatic exchange of information shows many PAN holders have not reported foreign financial assets.

The scheme has two tracks:

• Fee of ₹1 lakh (assets up to ₹5 crore): for a foreign asset bought from income earned abroad while you were a non-resident, which you did not show in the relevant schedule of your return after becoming resident. It also covers an asset bought from income already taxed in India but not reported.
• Tax and penalty (up to ₹1 crore in all): for other undisclosed foreign assets and undisclosed foreign income. You pay 30% of the asset’s value on 31 March 2026, 30% of the income, and a further amount equal to that tax, or 60% in effect.

The rules give worked examples. A plot abroad bought in 2015 from income earned as a non-resident, worth ₹3 crore and never reported after the owner became resident, needs only the ₹1 lakh fee. An unreported foreign account worth ₹60 lakh plus ₹20 lakh of untaxed foreign income costs ₹48 lakh. Foreign mutual funds and shares worth ₹6.5 crore in all are above the ₹5 crore limit and cannot use the scheme.

Who it affects

The scheme is open to residents, and also to people who are now non-resident or RNOR, if they were resident in the year the income arose or the asset was bought. KPMG says the rules may be relevant to returning residents, former residents and globally mobile employees.

It does not cover proceeds of crime where money-laundering proceedings have started or are pending, or years whose assessment under the Black Money Act is already complete. Money paid is not refundable.

What it means for you

1. List everything you hold abroad. Check each return you filed as a resident for foreign accounts, shares, ESOPs or RSUs, policies, pensions and property that should have been in the foreign assets schedule.
2. Work out which track applies. If the money came from income earned while you were an NRI, or from income already taxed in India, the ₹1 lakh track may fit. Otherwise the 60% track applies, and only up to ₹1 crore in all.
3. Value the assets correctly. Generally, value means the higher of cost and market value on 31 March 2026, converted at the RBI reference rate. For a foreign bank account, it is the total of all deposits since the account was opened, not the balance.
4. File Form 1 online by 31 December. The department sends an order in Form 2. You pay within two months from the end of the month of that order, or within a further two months with 1% simple interest a month, and report it in Form 3. Miss that and you lose the benefit.
5. Get professional advice. Valuation and track selection decide the cost, so speak to a chartered accountant before filing.

A valid declaration with payment brings immunity from further tax, penalty and prosecution under the Black Money Act for the items declared, for years up to 2025-26.

Key dates

• 31 March 2026: valuation date for all declared assets.
• 16 August 2026: scheme opened.
• 31 December 2026: last date to file the declaration in Form 1.
• Two months after the order month (plus up to two more with interest): deadline to pay the amount in the Form 2 order.