The Income Tax Department got 1,100 declarations under the FAST-DS scheme as the December 31 deadline nears. Officials said they started reaching out to UAE property owners to help them disclose foreign assets. The department also set up regional committees to answer taxpayer queries and help them regularise their holdings.
The Income Tax Department is stepping up outreach to encourage taxpayers to disclose eligible foreign assets under FAST-DS before the December 31 deadline. | Image Credit: Bloomberg
Around 1,100 taxpayers have filed declarations under the Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026 (FAST-DS), as the Income Tax Department steps up efforts to encourage disclosures before the December 31 deadline, sources in the Finance Ministry said.
Announced in the Union Budget 2026-27, the scheme came into effect on August 16, 2026, offering eligible taxpayers a one-time opportunity to disclose specified foreign assets and income that were either not reported in tax returns or had not been offered to tax, subject to prescribed conditions.
The department has begun selectively reaching out to taxpayers who own residential or commercial properties in the UAE that may not have been disclosed to the tax authorities, urging them to use the one-time window to regularise eligible holdings, sources said.
Following a high-level meeting on October 23, the department has also decided to share additional information on foreign assets with relevant taxpayers wherever possible to help them identify holdings that may need to be disclosed under the scheme.
The department is planning outreach programmes involving companies, educational institutions, professional bodies and industry associations to raise awareness about FAST-DS. The Central Board of Direct Taxes (CBDT) has also set up committees in each region under the Principal Chief Commissioner of Income Tax to address taxpayers' queries and concerns, sources added.
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The department has enabled a facility on its e-filing portal through which taxpayers can view and download information on foreign assets reported against their Permanent Account Numbers (PANs) by overseas jurisdictions under the Automatic Exchange of Information (AEOI) framework, including the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA).
Information for calendar years 2022, 2023 and 2024 is currently available on the portal. The facility displays only information received from jurisdictions that are signatories to the CRS/FATCA frameworks.
Information obtained under other multilateral arrangements has not been displayed because of risk factors or non-disclosure commitments. The department also gathers information and intelligence from other sources. At the October 23 meeting, it decided that such additional information could be shared with relevant taxpayers wherever possible, according to sources.
Under one category of the scheme, eligible taxpayers can declare specified undisclosed foreign assets or income with an aggregate value of up to ₹1 crore by paying tax at 30 per cent of the fair market value as on March 31, 2026, along with an equal amount as a penalty, taking the combined levy to 60 per cent.
A separate category covers eligible foreign assets acquired from income that has already been taxed or during a period when the taxpayer was a non-resident, but which were not subsequently reported in Schedule FA of the income-tax return. This category covers assets with an aggregate value of up to ₹5 crore and requires payment of a flat fee of ₹1 lakh, subject to the scheme's conditions.
A valid declaration and payment under the applicable category provide immunity from further assessment, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
The scheme also allows taxpayers to report eligible accounted foreign assets for a fee of ₹1 lakh to avoid the annual non-reporting penalty of ₹10 lakh prescribed under the Black Money Act.
"The restrictive monetary limits under FAST-DS may prevent a significant number of taxpayers from regularising their undisclosed foreign assets. Taxpayers with inherited foreign assets, in particular, may find it difficult to comply with the scheme because of the high tax and penalty burden on the current fair market value of assets, despite having limited liquidity to pay the amount," said Sandeep Bhalla, partner at Dhruva Advisors.
Bhalla suggested widening the scheme's eligibility criteria and removing value caps for inherited assets to encourage voluntary compliance and improve tax collections.
Bhalla also called for extending the scheme's deadline to March 31, 2027, and providing immunity to taxpayers declaring inherited foreign properties to encourage voluntary compliance.
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