Did you miss filing ITR with foreign asset details:Here’s a chance for small taxpayers like you to disclose such information without paying a penalty

The Income Tax Department has launched a special scheme called the Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS). This programme offers Indian residents a final chance to declare undisclosed foreign bank accounts, properties, or income by 31 December, 2026, helping them avoid heavy penalties and criminal prosecution. The one-time program commenced on 16 August, 2026. It is aimed at individuals who may have missed declaring their foreign holdings in previous years, allowing them to regularize their tax filings Who is eligible to declare under the scheme? The scheme is specifically designed for individuals who are classified as tax residents in India. Indian Residents: Any individual who qualifies as a resident under Section 6 of the Income Tax Act, 1961. Non-Residents RNORs: Non-residents or individuals with “Resident but Not Ordinarily Resident” (RNOR) status are also eligible. However, they must have been residents of India during the specific year in which they earned the foreign income or acquired the foreign asset. Exclusions: The scheme does not apply if criminal proceedings have already been started or are pending against the individual under the Prevention of Money-Laundering Act, 2002 It is also unavailable if a tax assessment has already been completed under the Black Money Act, 2015 for those specific assets. What is meant by ‘Small Taxpayer’ under this scheme? The scheme defines ‘small taxpayers’ based on the total value of the foreign holdings they wish to declare, as of 31 March, 2026. The rules categorize declarations into two types based on their values: Undisclosed Foreign Assets or Income: This covers foreign assets (like a property or bank account) or foreign income that was never reported to the tax department, and on which no tax was paid in India. To qualify as a small taxpayer under this category, the total value of these assets or income must not exceed ₹1 crore. Undeclared Taxed Assets: This covers foreign assets that were either already taxed in India, or were acquired when the individual was living abroad as a non-resident [6]. While the taxpayer paid the necessary taxes, they forgot to declare these assets in the specific foreign assets schedule of their Income Tax Return (ITR). Under this category, the total value of the assets must not exceed ₹5 crore. If the total value of your foreign holdings exceeds these limits (for example, if you hold ₹6.5 crore in undeclared assets), you are not eligible to apply under this scheme. Taxes and Fees Applicable The cost of declaring depends entirely on which category the asset falls into: For Undisclosed Assets/Income (Up to ₹1 Crore Limit): Taxpayers must pay a total of 60% of the declared asset’s value. This comprises a 30% flat tax and an additional 30% fee (which represents a 100% surcharge on the tax itself). For example, if you declare a foreign bank account worth ₹60 lakh and undisclosed foreign income of ₹20 lakh, your total payable tax and fee will be ₹48 lakh (₹36 lakh on the bank account and ₹12 lakh on the income). For Undeclared Taxed Assets (Up to ₹5 Crore Limit): Taxpayers only need to pay a flat fee of ₹1 lakh, regardless of the asset’s size. How Small Taxpayers Can Disclose Their Assets The entire filing and approval process is conducted online through the Income Tax Department’s official e-filing portal to ensure ease of compliance. The steps are as follows: Step 1: File Form 1: The taxpayer must submit Form 1 electronically. Along with this form, they must upload documents proving the acquisition of the asset or the earning of the income. They must also attach a valuation report from an authorized valuer to establish the Fair Market Value of the asset as of March 31, 2026. Step 2: Receive Form 2 Order: Within one month from the end of the month in which the declaration is filed, the tax authority will review the form and issue an official order in Form 2, stating the exact amount the taxpayer must pay. Step 3: Make the Payment: The taxpayer must pay the specified tax and fee within two months from the end of the month in which they receive the Form 2 order. Extension Option: If the taxpayer cannot make the payment in time, they can pay within an additional two-month window. However, they will have to pay a simple interest of 1% per month for the delayed period. The absolute outer limit for payment is four months from the end of the month in which Form 2 was issued. Step 4: Report Payment via Form 3: Once the payment is made, the taxpayer must submit proof of payment and an intimation of payment electronically in Form 3. Step 5: Receive Form 4 Certificate: After verifying the payment details, the tax authority will issue a final certificate in Form 4 within one month, certifying that the declaration and payments are complete. Benefits and Immunities of Joining the Scheme Filing a valid declaration and completing the payment provides critical legal protection to small taxpayers. Once the final Form 4 certificate is issued, the taxpayer receives complete immunity from further taxes, monetary penalties, and criminal prosecution under the Black Money Act, 2015 and the Income Tax Act, 1961 regarding the declared assets. Additionally, the declared income or investment amount will not be added to the taxpayer’s total taxable income for any year. Taxpayer Footprint: Growing Compliance in India This special window is introduced at a time when tax compliance in India is reaching historic highs, driven by digital monitoring, simplified procedures, and a formalizing economy. According to a written reply submitted by the Minister of State for Finance, Pankaj Chaudhary, in the Lok Sabha in August 2026, the number of Income Tax Return (ITR) filers in India rose to 8.67 crore in the financial year 2025-26, up from 6.96 crore in FY 2021-22—a growth of 24%. Official statistics from the Income Tax e-filing portal also show that during the financial year 2024-25 (up to March 31, 2025), total returns filed reached 9.19 crore. This formal tax net is heavily driven by India’s major industrial and urbanized states, where formal employment, corporate hubs, and services are concentrated: Maharashtra: The state continues to lead the country’s tax filings. It registered 1.40 crore ITR filings in FY 2025-26, up from 1.27 crore filers in FY 2024-25. Gujarat: Follows as a highly compliant state, with 82.62 lakh citizens filing tax returns during FY 2024-25. Rajasthan: Recorded 41.29 lakh ITR filers in FY 2024-25, reflecting a growing formal workforce. Madhya Pradesh: Registered 33.88 lakh ITR filers in FY 2024-25, reflecting expanding tax registration across central India. For small taxpayers holding unreported assets abroad, this scheme represents a final, risk-free opportunity to align with India’s rapidly expanding and digitizing tax compliance framework before the 31 December, 2026 deadline.