A declaration can be made where a taxpayer failed to file an income-tax return, failed to disclose the foreign asset or income in a return already filed, or where the asset or income has escaped assessment under the applicable provisions.
The scheme permits declarations for any previous year in respect of assets or income covered by the specified provisions, subject to the applicable monetary thresholds and other conditions.
FAST-DS covers two broad categories.
The first relates to an undisclosed asset located outside India or undisclosed foreign income that was not offered to tax. The aggregate value of the undisclosed foreign asset and foreign income under this category must not exceed ₹1 crore.
The second category covers foreign assets that were already offered to tax or were acquired when the taxpayer was a non-resident but were not disclosed in the relevant schedule of the income-tax return. The aggregate value of assets under this category must not exceed ₹5 crore.
How much will taxpayers have to pay?
For the first category, the amount payable is 30% of the value of the undisclosed foreign asset or foreign income, plus an additional amount equal to the tax payable. This effectively takes the total payable to 60% of the declared value or income.
For the second category, taxpayers can make a declaration by paying a flat fee of ₹1 lakh, provided the aggregate value of the foreign assets does not exceed ₹5 crore.
How will foreign assets be valued?
The valuation date under FAST-DS is March 31, 2026. For most assets, fair market value is generally the higher of the acquisition cost and the price the asset would ordinarily fetch in the open market on that date. Where the specified valuation is not carried out, indexed cost of acquisition is deemed to be the fair market value.
Different valuation rules apply to foreign bank accounts, shares, securities, jewellery and overseas immovable property. For foreign bank accounts, the value is generally based on deposits made from the date the account was opened up to March 31, 2026, subject to specified exclusions. Deposits made from withdrawals from the same account are excluded to prevent double counting.
How to file the declaration?
Declarations must be filed electronically in Form 1 to the prescribed income-tax authority. Taxpayers must upload documents supporting the acquisition of the asset or earning of the income and valuation reports where applicable.
After verification, the authority will communicate the amount payable through Form 2. The taxpayer generally gets two months from the end of the month in which the order is received to make the payment. A further period of up to two months is permitted with simple interest of 1% for every month or part of a month of delay.
A valid declaration followed by payment provides immunity from further tax or penalty and prosecution under the Black Money Act in respect of the declared income or asset. (NVI)
