Last Updated:February 07, 2026, 11:20 IST

Budget 2026 has introduced a six-month disclosure plan for foreign assets with immunity from prosecution.

Taxpayers can be fined upto Rs 10 lakh if they fail to declare. (Representative Image)

Finance Minister Nirmala Sitharaman revealed in the Union Budget 2026 that taxpayers in India who failed to report income or assets kept abroad now have a six-month opportunity to come clean and avoid fines and penalties under the Black Money (Undisclosed Foreign Income and Assets) Act.

The Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS) 2026 is a new option that aims to rectify previous errors by voluntary disclosure. It is specifically designed for taxpayers who might have neglected to disclose overseas assets or income on previous income tax returns (ITRs), including students, workers, young professionals, and relocated non-resident Indians (NRIs).

Who Can Use the 6-Month Window

Eligible taxpayers are permitted to register hidden foreign assets or income under FAST-DS that were either not taxed at all or were not accurately declared in the foreign assets schedule of previous returns. Examples include foreign bank accounts, overseas shares, mutual funds, employee stock options (ESOPs/RSUs), foreign real estate, and other financial interests held overseas.

The scheme is divided into two categories:

Category A: For those who have not disclosed any overseas assets or income at all, up to a value of Rs 1 crore. They cannot get immunity unless they pay taxes and penalties equal to 60 per cent of the value of their assets or income.

Category B: For people who paid taxes and declared overseas income but neglected to disclose the related asset. They can regularise the declaration by paying a one-time charge of Rs 1 lakh per asset if the asset’s worth is up to Rs 5 crore.

Taxpayers can avoid drawn-out legal proceedings and be protected from harsher penalties under the Black Money Act owing to this prompt declaration.

Penalties If You Miss the Deadline

Taxpayers will be subjected to severe penalties if they fail to disclose their assets and incomes earned from overseas during this period under the Black Money Act. The taxpayers will be fined Rs 10 lakh per asset for each year they fail to make a disclosure, and a penalty three times the tax amount will be imposed, along with a 30% tax on each income earned from overseas assets.

Furthermore, prosecution may result in jail time ranging from six months to seven years in severe circumstances.

Reopened assessments can cover up to 16 years, and tax treaty advantages such as relief under the Double Taxation Avoidance Agreement (DTAA) may no longer be accessible.

Why It Matters

According to tax professionals, this one-time window offers a unique chance to correct prior non-disclosures without worrying about legal action or severe fines. Additionally, it promotes voluntary compliance and reduces the likelihood of future disagreements between taxpayers and tax authorities.

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