FAST-DS 2026: The Foreign-Asset Amnesty for Returning NRIs Who Forgot Schedule FA, and Who Should Actually Use It

On 1 February 2026, buried in the Finance Bill alongside the slab tweaks everyone was reading, the government did something it had not done since the 2016 income declaration scheme: it offered a way out for people who had quietly broken the foreign-asset reporting law. The scheme is called FAST-DS, the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, and it is aimed at a person the Black Money Act was never really designed to punish. Picture a software engineer who came back from four years in Seattle, who paid every rupee of Indian tax on his Amazon RSUs the moment they vested, and who simply never knew that the shares sitting in his E*TRADE account also had to be listed in a separate part of his return called Schedule FA. Under the existing law, that omission can cost him Rs 10 lakh per year, per asset, even though he owes no extra tax. FAST-DS lets him fix it for a flat Rs 1 lakh.

The 30-second answer: FAST-DS, announced in the Union Budget on 1 February 2026 via Clauses 114 to 128 of the Finance Bill, is a one-time, six-month window to regularise foreign assets or income never reported in Schedule FA, with statutory immunity from the Black Money Act, 2015. Category A (never taxed, never reported; capped at Rs 1 crore as on 31 March 2026) costs 60% of value, that is 30% tax plus a matching 30% charge. Category B (income already taxed, asset just not disclosed; capped at Rs 5 crore) costs a flat Rs 1,00,000. It is for small, genuine lapses, not large-scale evasion, and excludes anyone already under a Black Money Act assessment or PMLA action. The commencement date is not yet notified, so no valid declaration can be filed until the government notifies it in the Gazette. Details await the final scheme notification.

A note on sourcing before we go further, because this matters for how much weight to put on the numbers below. Everything here is drawn from the Finance Bill, 2026 text and from professional analyses by chartered accountancy firms and tax platforms published in February and March 2026. The scheme itself has been announced but, as of early June 2026, the operative rules and the all-important commencement date have not been notified in the Official Gazette. Until they are, FAST-DS is law-on-paper. Treat the thresholds and rates as the firm intent of the Bill, but confirm the final shape of the scheme against the official notification before you act on a single figure.

This guide assumes you already understand what Schedule FA is and why it is a separate obligation from paying tax; if that distinction is new to you, read the Schedule FA reporting guide first, because the entire scheme hangs on it. What follows is the part that actually decides money: which category you fall in, what it costs versus what you are exposed to today, the residency question that determines whether you owe anything at all, and the honest case for why a chunk of readers should not file under this scheme.

Why this scheme exists, and why it exists now

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was written for a specific villain: the person hiding undeclared wealth in a Swiss account. Its penalties are calibrated for that villain. Section 43 imposes a flat penalty of Rs 10 lakh for every year a foreign asset goes unreported in Schedule FA, with no link to the asset's value or to any tax owed. Miss reporting one dormant US savings account for five assessment years and the exposure is Rs 50 lakh, even if the account held 800 dollars and earned six dollars of interest. Add Sections 3 and 41, which tax an undisclosed asset at 30% and stack a penalty of three times that tax on top, and a genuinely undisclosed asset can attract a total outgo of roughly 120% of its value, before you reach the prosecution provisions in Sections 49 and 50.

For a decade that machinery sat mostly aimed at the wrong people. The salaried returnee with vested RSUs, the doctor who did a fellowship abroad and kept a current account, the consultant on a three-year deputation, none of them are the hidden-wealth villain, yet all of them are squarely inside the literal text of Section 43. What changed the temperature is data. India now receives automatic, near-real-time information on overseas accounts and equity holdings through the global Automatic Exchange of Information framework and the US FATCA arrangement. The department can see the E*TRADE account and the HSBC UK current account whether or not you reported them. If you want the full picture of what flows back to Delhi and from where, that is the subject of the FATCA and CRS guide. The practical upshot is that the old gamble, that a small foreign account would never surface, has stopped working. The government, facing a backlog of technical-lapse cases it does not really want to prosecute, has opened a pressure valve. FAST-DS is that valve.

Category A versus Category B: the distinction that decides everything

The single most important thing to get right is which category you are in, because the cost difference is enormous. The Bill splits disclosures into two buckets based not on the size of the asset but on whether the underlying income was ever taxed.

Category A is for foreign income or assets that were never offered to tax and never reported. This is closest to the original sin the Black Money Act targets: money that went abroad and was never declared in India at all. Category A is capped at an aggregate undisclosed value of Rs 1 crore as on 31 March 2026. The cost is 30% tax plus an additional charge equal to 100% of that tax, which works out to 60% of the asset or income value. Against the roughly 120% an ordinary Black Money Act assessment would extract, plus prosecution risk, paying 60% with full immunity is a genuine bargain for someone who actually evaded.

Category B is the one most NRIs reading this will care about. It covers the case where the income was already taxed, either because you offered your foreign salary, dividends or capital gains to Indian tax in the relevant year, or because it was income earned outside India while you were a non-resident and so was not taxable in India in the first place, but the asset itself was never disclosed in Schedule FA. This is the pure reporting lapse: you did nothing wrong on the tax, you simply missed a disclosure column. Category B is capped at Rs 5 crore of asset value as on 31 March 2026, a far higher ceiling than Category A precisely because no tax was dodged. And the cost is not a percentage at all. It is a flat fee of Rs 1,00,000.

That flat fee is the heart of the scheme for the salaried returnee, so it is worth being precise about how it scales. On the reading in the professional analyses of the Bill, where the same single asset went unreported across several years, the Rs 1 lakh fee is charged once, for the first year of the lapse, and the asset is then treated as disclosed for the later years. But where you have several different assets each first unreported in different years, the Rs 1 lakh fee applies separately to each asset, again pinned to the first year that particular asset was missed. So one RSU grant carried across four years of returns is a single Rs 1 lakh. A US brokerage account, a UK current account and a Canadian RRSP, each first missed in a different year, is potentially three separate fees. This per-asset behaviour is exactly the kind of detail that the final notification will pin down, so treat the multi-asset arithmetic as the current best reading, not gospel.

Feature	Category A	Category B
Who it covers	Foreign income or asset never taxed and never reported	Income already taxed (or non-taxable NRI income), but asset never disclosed in Schedule FA
Value cap (as on 31 Mar 2026)	Rs 1 crore aggregate	Rs 5 crore
Cost	30% tax + 30% charge = 60% of value	Flat Rs 1,00,000
Versus doing nothing	~120% of value plus prosecution	Rs 10 lakh per year, per asset, plus prosecution
Typical NRI case	Genuinely undeclared offshore money	Returnee with RSUs or a dormant foreign account, taxes paid

Put real numbers on the returnee case

The abstract relief becomes concrete the moment you cost it out. Take Arjun, who worked in San Francisco from 2018 to 2022 and moved back to Bengaluru in mid-2022, becoming a resident and ordinarily resident from the financial year 2023-24 onward. He held vested RSUs in his US employer worth about Rs 60,00,000, and a dormant US checking account with a peak balance of about Rs 4,00,000. He paid Indian tax correctly on every RSU as it vested and on the perquisite at exercise, and on the trickle of US dividends. What he never did, for the three assessment years 2023-24, 2024-25 and 2025-26, was list either the brokerage holding or the bank account in Schedule FA, because his tax preparer treated "I paid the tax" as the end of the job.

Under the existing Black Money Act, his exposure is brutal and bears no relation to his honesty. Section 43 is Rs 10 lakh per asset, per year. Two assets across three years is six counts of Rs 10 lakh, so Rs 60,00,000 of penalty, on assets where he owes zero additional tax. That is the cliff he is standing on if a notice arrives.

Under FAST-DS Category B, because the income was fully taxed, he is in the flat-fee bucket. His two assets sit comfortably under the Rs 5 crore cap. On the per-asset reading, he pays Rs 1,00,000 for the brokerage holding and Rs 1,00,000 for the bank account, a total of Rs 2,00,000, and walks away with statutory immunity. Had the scheme not existed, and had the department picked up his accounts through FATCA data, the difference between the two outcomes is Rs 60,00,000 of penalty versus Rs 2,00,000 of fee, a swing of Rs 58,00,000 for the same set of facts. That is the whole argument for the scheme in one number.

Now contrast a Category A case to see why the cost is so different. Suppose Priya, also now resident in India, had Rs 40,00,000 in an overseas account funded from consulting income she earned while resident in India and never declared anywhere. That is undisclosed income, not a reporting slip. She does not get the flat fee. She is in Category A, under the Rs 1 crore cap, and pays 30% tax of Rs 12,00,000 plus a matching charge of Rs 12,00,000, so Rs 24,00,000, which is 60% of the Rs 40 lakh. Steep, but set it against the alternative. An ordinary Black Money Act assessment would tax it at 30% (Rs 12,00,000), add a penalty of three times that (Rs 36,00,000) for a total near Rs 48,00,000, around 120% of value, and leave prosecution on the table. FAST-DS halves her cash cost and removes the prison risk. The scheme is generous to the genuine evader and almost free to the genuine forgetter, which is exactly the design.

The residency question that can make your fee zero

Here is the point that the urgency-driven coverage almost entirely misses, and it is the one that can save a careful reader the entire fee. Schedule FA only applies to a person who is a resident and ordinarily resident. A non-resident does not file Schedule FA. A returning NRI in the Resident but Not Ordinarily Resident (RNOR) transition window is, for foreign-asset reporting purposes, also outside the Schedule FA net for assets and income that are genuinely foreign.

That changes the question from "should I disclose?" to "did I ever have an obligation to disclose in the first place?" If the years in which you held the foreign asset were years you were a non-resident or RNOR, there was no Schedule FA requirement, therefore no lapse, therefore nothing to cure and nothing to pay. FAST-DS is a remedy for a defect; if there is no defect, you do not buy the remedy. The scheme matters only for the assessment years in which you were a resident and ordinarily resident and still missed the filing. Before you reach for Rs 1 lakh, map your residency year by year. Many returnees discover that the bulk of the years they were panicking about were RNOR years in which the obligation never bit. If you are unclear on where your RNOR window starts and ends, the mechanics are in the residency and RNOR rules guide, and getting this right is the difference between a real liability and a phantom one.

This is also why the eligibility wording is broader than "residents". The Bill lets a person who is or was a resident in the relevant period make a declaration, which deliberately captures someone who is a non-resident or RNOR today but was a resident when the lapse occurred. So a person who moved back, was ROR for two years, missed Schedule FA in those two years, and has since gone abroad again, can still use the scheme. But the trigger is always those resident years, not the years abroad.

Who this is actually for

Strip away the marketing and the scheme has a fairly precise target audience. The clearest fit is the returning NRI with vested RSUs or ESOPs from a US, UK or Gulf employer who paid the Indian tax on vesting but never listed the holding in Schedule FA. This is the textbook Category B case, and for an NRI moving back permanently it pairs with everything else on the returning-to-India checklist, where the foreign-asset clean-up is one line item among many. The second clear fit is the person who studied abroad and kept a low-balance current account running after coming home, again a Category B reporting lapse with no tax consequence. The third is the executive on overseas deputation who accumulated foreign holdings during resident years and missed the disclosure.

Category A's audience is narrower and more uncomfortable: someone who genuinely has foreign income or assets that were never declared in India at all, sitting under the Rs 1 crore line. For that person, 60% with immunity is a rational price to retire a 120%-plus exposure that grows every year the data net tightens. Above Rs 1 crore of never-taxed value, the scheme simply does not apply, and that person needs a tailored strategy with counsel, not a self-service amnesty.

There is also a quieter piece of relief sitting next to the scheme that many small holders should note. The Finance Bill, 2026 carries a provision removing prosecution for non-disclosure of foreign movable assets (so, not immovable property) where the aggregate value is below Rs 20 lakh, and on the reading in the professional commentary this applies with retrospective effect from 1 October 2024. That does not erase the Rs 10 lakh per-year penalty under Section 43, but it does take the threat of criminal prosecution off the table for the smallest holders, which materially changes the risk calculus for someone weighing whether they even need the scheme.

What it costs you beyond the fee, and what it does not buy

Two things are easy to misread. First, FAST-DS gives statutory, automatic immunity, not discretionary relief. Once you make a valid declaration and pay, the immunity from penalty and prosecution under the Black Money Act, 2015 (and on the wider reading, the related exposure under the Income-tax Act, 1961) arises by operation of law. There is no officer deciding whether to be lenient. The Bill also provides that once a declaration is made and paid, the disclosed asset is not reopened or reassessed in later years, which is what makes the closure real rather than cosmetic.

Second, the scheme is ring-fenced, and that cuts both ways. On the reassuring side, the professional reading is that a FAST-DS declaration is meant to close the specific foreign-asset issue, not to hand the department a key to reopen unrelated parts of your assessments. On the cautionary side, immunity is only as good as the honesty of the declaration. You must quantify the peak balances of foreign accounts and the fair market value of holdings, mapped to the exact assessment years of the lapse. A declaration that understates is not protection; it is a written confession with the wrong number on it.

Edge cases

You are outside the scheme entirely if the department got there first. The Bill excludes anyone with proceedings already initiated or pending under the Prevention of Money Laundering Act, 2002, and anyone whose case is already under assessment, completed or pending, under the Black Money Act. Cases involving proceeds of crime or large-scale offshore evasion are out. The scheme is for the person who comes forward before the notice, not the person trying to settle a fight already underway. Voluntariness is the price of entry.

The Rs 1 crore and Rs 5 crore caps are aggregate, measured as on 31 March 2026. If your total never-taxed foreign value crosses Rs 1 crore, Category A is unavailable and you cannot simply split assets to sneak under. If your total Schedule-FA-defaulted asset value crosses Rs 5 crore, Category B is gone. The caps are deliberately set at "small taxpayer" levels; this is not a scheme for the genuinely wealthy offshore holder.

A Category B declaration does not retroactively fix a tax shortfall. Category B is for cases where the income was already taxed or was legitimately non-taxable NRI income. If, on examining your facts, you find income that should have been taxed and was not, you are not in Category B at all, you are in Category A, and the flat fee does not apply. The audit-trail test, proving the income was offered to tax in the relevant year, is what separates the two, and it is where the eligibility assessment actually lives.

Immovable foreign property does not get the Rs 20 lakh prosecution carve-out. The retrospective prosecution relief is for movable foreign assets only. A small foreign flat or land parcel does not benefit from it, even below Rs 20 lakh.

Everything here is pre-notification. The commencement date has not been notified as of early June 2026, and a declaration filed before the Official Gazette notification is invalid. The per-asset versus per-year fee mechanics, the exact valuation rules, and the final list of exclusions will be settled by the operative scheme rules. Do not let a firm rush you into "filing now" before there is a valid window to file into.

The closing read

The honest read is that FAST-DS is a genuinely good deal for a narrow, specific person, and a non-event for a surprisingly large number of people who will be told they need it. If you are a returning NRI who paid your taxes and simply never knew Schedule FA existed, this scheme converts a potential Rs 10 lakh per-year, per-asset catastrophe into a flat Rs 1 lakh and a clean closure, and you should use it the moment the window is notified, after first confirming you actually held a Schedule FA obligation in the relevant resident years. If you are sitting on genuinely undeclared foreign money under Rs 1 crore, the 60% Category A price to retire a 120%-plus exposure with no prosecution risk is, coldly, the rational move, and the longer you wait against a tightening FATCA and CRS net the worse your odds of staying invisible.

But the recommendation has a firm boundary, and it is the part the panic-marketing leaves out. This is not a blanket "disclose everything" call. If the years your foreign asset existed were non-resident or RNOR years, you had no Schedule FA duty, there is no lapse, and paying Rs 1 lakh to cure a defect that never existed is simply lighting money on fire. The single most valuable thing you can do before this scheme opens is not to file, it is to map your residency status year by year and your assets year by year, and only then see whether a real lapse remains. For anyone with a Category A case, a property abroad, or aggregate values near the caps, this is the point to pay a chartered accountant who can read the final notification, not to act on a news article, this one included. And because the start date and the operative rules are not yet notified, the correct action today is to get your documents and your residency timeline in order, and wait for the Gazette.

Related guides

• Schedule FA: foreign asset reporting for NRIs and residents
• FATCA and CRS: what India already knows about your foreign accounts
• Budget 2026: what changed for NRIs
• NRI residency and the RNOR transition window
• Relocating back to India: the financial checklist
• Capital gains tax for NRIs on shares and mutual funds
• All News and analysis
• All Taxation guides
• All Jobs and relocation guides

This guide is educational and general in nature, and is based on the Finance Bill, 2026 and secondary professional analysis published in early 2026. FAST-DS has been announced but, as of June 2026, its commencement date and operative rules have not been notified in the Official Gazette; a declaration made before notification is invalid. Rates, caps, fees and eligibility may change in the final scheme. This is not individual tax advice. Foreign-asset disclosure carries real legal consequences under the Black Money Act, 2015, so confirm your specific position and the final notified rules with a qualified chartered accountant before making any declaration.