The government has notified a one-time voluntary disclosure scheme, Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS), allowing taxpayers to declare their undisclosed foreign bank accounts, immovable property, jewellery, artistic work, shares, securities or any other asset or income on payment of a specified tax or fee. The Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026, operationalising the Budget announcement of FAST-DS, effective August 16 with last declaration date on December 31.The scheme applies to two broad categories of asset or income — undisclosed foreign income or asset located outside India up to Rs 1 crore in value; and assets located outside India up to Rs 5 crore in value acquired from income accruing or arising outside India by an assessee when he or she was a non-resident, but did not declare them in the tax return on becoming a resident; or assets acquired from income offered to tax under the Income-tax Act but not declared in the relevant schedule in the tax return.Under the first category, taxpayers need to pay 30% of fair market value of assets or 30% of undisclosed income as tax and 30% as additional income tax in lieu of penalty in order to get immunity from prosecution. For the second category, immunity from both penalty and prosecution is available with the fee payment of Rs 1 lakh.Also Read | RBI closes forex deposit window for NRIs early after $52.3 billion rushOn making a valid declaration and payment under FAST-DS, immunity will be provided from any further tax or penalty, and from prosecution, under the Black Money Act, 2015, in respect of the income or asset so declared, the Income Tax Department said. Also, the income or amount of investment in the asset declared under this scheme will not be included in the total income of the taxpayer under the Income-tax Act or the Black Money Act, it said.The CBDT has shared tax calculations for the declaration window with a few examples:Example 1: an undisclosed foreign bank account existed as on March 31, 2026, with the value of the bank account on that date at Rs 60 lakh. The assessee also earned undisclosed foreign income of Rs 20 lakh during previous years. Then, the aggregate value of the undisclosed asset and undisclosed foreign income is Rs 80 lakh (Rs 60 lakh + Rs 20 lakh), which does not exceed Rs 1 crore. So, the case will be covered under the first category of disclosure categories.The tax on the undisclosed asset will be charged at 30% of Rs 60 lakh, that is, Rs 18 lakh, while the tax on undisclosed foreign income will be 30% of Rs 20 lakh, that is, Rs 6 lakh. In total, aggregate tax payable would be Rs 24 lakh (Rs 18 lakh + Rs 6 lakh). The penalty payable would be 100% of aggregate tax, that is Rs 24 lakh. Therefore, the total amount payable would be Rs 48 lakh (Rs 24 lakh tax + Rs 24 lakh penalty).Story continues below this adExample 2: A plot of land located outside India was acquired in 2015 from income earned abroad when the assessee was a non-resident. After becoming resident in India, the assessee failed to disclose the land in the relevant schedule of the income tax return. The value of the land on the valuation date (March 31, 2026) is Rs 3 crore, which does not exceed the Rs 5 crore limit and gets covered under the second category. The amount payable then would be a fee of Rs 1 lakh.Must Read | SEBI proposes easier KYC norms for NRIs, OCIs and foreign investorsExample 3: An assessee purchased certain units of mutual fund abroad in 2020 from income offered to tax in India when the assessee was a resident. But the assessee failed to disclose the mutual fund in the relevant schedule of the income tax return. The value of the mutual fund on the valuation date was Rs 2.5 crore. The assessee also acquired certain quoted shares and securities on the New York Stock Exchange in 2022 and the value of QS is Rs 4 crore. Then, the total value of both these assets acquired in 2020 and 2022, is Rs 6.5 crore which exceeds the Rs 5 crore limit. Then the assessee is not eligible to declare under this scheme.As per the newly notified rules, a declaration for any asset or income has to be made electronically in Form 1 to the income tax authority under the two categories where the aggregate value of undisclosed income and assets do not exceed Rs 1 crore or Rs 5 crore, depending on the category under which the assets are declared.Other than a bank account, the declaration for any asset will not be treated as invalid or void on the grounds of misrepresentation, suppression of facts, or furnishing of false material particulars, only if the variance between the fair market value and the value determined by the assessing officer or any other income tax authority during any assessment or inquiry does not exceed 20%, the rules stated.Story continues below this adIn her Budget speech in February, Union Finance Minister Nirmala Sitharaman had said that the government will introduce a one-time, 6-month foreign asset window to address practical issues of small taxpayers like students, young professionals, tech employees, relocated NRIs and others, for disclosing income or assets below a certain size.Explained | Are India’s forex reserves really ‘adequate to provide cushion against external shocks’?The payment of the amount payable under the scheme has to be made within two months of the order passed by the income-tax authority. If the payment is after two months but within the additional period not exceeding two months, then a simple interest of 1% on the total amount payable has to be paid for every month or part of a month of delay. “The maximum additional period allowed is four months from the end of the month in which the original payment order (Form 2) was passed. If payment is not made within this outer limit, the benefit of the Scheme ceases to be available for that declaration,” the Income Tax Department said.For the scheme, the valuation date is March 31, 2026 and the fair market value of assets proposed to be declared must be computed as on this date. Fair market value will be the higher amount between the cost of acquisition, and the price the asset would ordinarily fetch if sold in the open market on the valuation date, ideally supported by a report from a valuer recognised by the government (or its agency) of the country where the asset is located, it said. Where such market valuation is not carried out, then the indexed cost of acquisition will be taken as the fair market value, it said.The scheme will not apply if any income or asset, directly or indirectly, represents proceeds of crime in respect of which proceedings have been initiated, or are pending, under the Prevention of Money-laundering Act, 2002; or any income or asset relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act, 2015, the Department said.