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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The government has proposed a downward revision of up to Rs1.53 per unit in the base electricity tariff for some domestic power consumers, while recommending higher fixed monthly charges for certain protected and unprotected households, according to a motion filed with the National Electric Power Regulatory Authority (Nepra).

The move aims to rationalise tariffs for the calendar year 2026, balancing affordability for low-usage consumers with recovery of costs from higher users.

Under the proposal, protected consumers using 51–200 units would face fixed charges of Rs200–300 per month, while unprotected consumers consuming up to 600 units could see up to 100% increases in fixed charges, with monthly rates rising from Rs200 to Rs675 depending on consumption.

Conversely, households consuming 601–700 units and above 700 units would see fixed charges reduced from Rs800–1000 to Rs675 per month.

The government also proposed reductions in base tariffs for higher-usage unprotected consumers.

For 301–400 units consumption, a drop of Rs1.53 per unit to Rs36.46 is proposed; for 401–500 units, Rs1.27 to Rs38.95 and for 501–600 units, a cut of Rs1.40 to Rs40.22 has been suggested.

Similarly, for 601–700 units, Rs0.91 per unit cut to Rs41.85; and above 700 units, Rs0.49 to Rs47.20 per unit has been proposed.

Lower-usage unprotected consumers (1–300 units) and lifeline protected consumers would see tariffs largely unchanged, ranging from Rs3.95 to Rs33.10 per unit depending on usage.

Nepra will hold a public hearing on February 10, 2026, allowing stakeholders and consumers to comment on the proposed tariff adjustments.

Energy analysts say the plan reflects the government’s attempt to shield low-usage households from rising electricity costs while passing higher fixed charges to moderate and high-usage consumers, a move likely to impact urban households more significantly.

The proposal underscores ongoing challenges in Pakistan’s power sector, as policymakers try to balance affordability, cost recovery, and financial sustainability for utilities.

Hike in Feb electricity bills

Meanwhile, electricity consumers, including those of K-Electric, will face an additional Re0.284 per unit in their February bills following a fuel charges adjustment for December 2025.

The hike, announced by the Nepra, comes as electricity costs rose last December while consumers were billed at lower rates.

The increase applies to all consumer categories except lifeline users, pre-paid electricity customers, and electric vehicle charging stations, and will also impact Incremental Consumption Package users.

Nepra clarified that bills issued before the notification will incorporate the adjustment in subsequent cycles, and the change will be itemised separately on bills.

The adjustment underscores ongoing challenges in Pakistan’s power sector, as fuel price volatility continues to influence electricity tariffs and billing for both urban and rural consumers.