Missed declaring foreign assets? Budget 2026 offers a fresh start

While presenting the Union Budget 2026 in the Lok Sabha on February 1, Finance Minister Nirmala Sitharaman announced the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS) 2026. The scheme proposes to allow students, young professionals, salaried employees, technology sector workers and people who have recently returned to India after living abroad to voluntarily declare foreign income and assets that were missed to be declared earlier.

This proposed initiative follows the Central Board of Direct Taxes (CBDT)’s Non-intrusive Usage of Data to Guide and Enable ‘NUDGE’ campaign, which aims to encourage compliance among taxpayers. The NUDGE campaign, launched in November 2024 and continued in November 2025, involved sending emails and messages to taxpayers to revise their returns after identifying cases of undeclared foreign assets.

The FAST-DS 2026 will apply to two categories of taxpayers:

Category A: Taxpayers who have not disclosed their overseas income or assets.

Category B: Taxpayers who have disclosed their overseas income and/or paid due tax but failed to declare the assets acquired.

To facilitate voluntary compliance and resolve legacy cases, the FAST-DS 2026 will introduce a time-bound scheme for declaring foreign assets and foreign-sourced income. Taxpayers will benefit from limited immunity from penalties and prosecution under the Black Money Act for matters covered by the declaration. However, cases involving prosecution or proceeds of crime will be excluded from this immunity.

The government has clarified that if the same foreign asset was not disclosed over multiple yearsthe ₹1 lakh fee (assuming there is no income from such foreign asset) will be charged only once, for the first year of non‑disclosure. However, if different assets were acquired in different yearsthe fee will apply separately for each such asset. This clarification brings clarity and certainty for taxpayers opting for the scheme.

FAST‑DS 2026 gives small taxpayers a one‑time chance to fix past mistakes for non reporting / incomplete reporting of foreign income / assets.  By providing a structured framework for voluntary disclosure, the scheme aims to address the challenges faced by individuals with foreign assets and income, ultimately fostering a culture of transparency and accountability in the financial landscape and is a step in the right direction. Errant taxpayers are encouraged to take advantage of the Scheme to resolve past lapses and ensure peace of mind.

Detailed rules, timelines and procedural guidelines for implementation of the Scheme will be notified after the enactment of the Finance Bill, 2026.

The author is a Partner at EY India

(with inputs from Ashish Kabra, Senior Manager at EY India)

Published on February 1, 2026