Foreign assets disclosure: Key FAST-DS rules Income Tax Department wants taxpayers to know
The Central Board of Direct Taxes (CBDT) recently introduced the new Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS). The scheme, unveiled on 14 August, provides eligible taxpayers with undisclosed foreign assets or income a narrow window to come clean, provided they can explain that their assets and valuations comply with the applicable rules and regulations.
Furthermore, in accordance with the rules, the declarations must be filed by 31 December 2026, and valued as on 31 March 2026. These simple steps will help taxpayers resolve any discrepancies associated with their tax returns amicably.
Let us take a look at the scheme in detail, including its rules and their significance, to calculate the fair market value of the assets in question.
Two tracks, very different costs
It is important to keep in mind that undisclosed foreign assets, along with income under ₹1 crore, can attract 30% tax and a matching 100% penalty. This would simply mean that if imposed, 60% of the total value will be effectively gone.
Still, any assets purchased while being a non-resident, or from already taxed income not reported earlier, can incur just a flat ₹1 lakh fee (or nil) if under ₹5 crore. Not having a clear understanding of the applicable rules and misclassifying your case can result in serious legal ramifications.
In case of doubts, it is wise to refer to the official notification of the CBDT along with the relevant FAQ section. Taxpayers should also seek professional guidance to avoid legal and financial complications later.
How will your foreign assets be valued?
| Type of asset | How it is valued |
|---|---|
| Gold, jewellery, artwork | Higher of the purchase cost or market value assessed by a valuer |
| Listed shares | Higher of the purchase cost or the prescribed stock-exchange value |
| Unlisted shares | Higher of the purchase cost or value calculated under the prescribed formula |
| Property | Higher of the purchase cost or value assessed by a valuer |
| Foreign bank account | Based on the prescribed calculation of deposits made into the account |
| Other assets | Higher of the purchase cost or prescribed market value |
Note: Foreign assets must be valued using the prescribed method for each asset type. Generally, the fair market value (FMV) is the higher of the acquisition cost or the prescribed market/valuer-based value. For bank accounts, the calculation is based on deposit history rather than simply the closing balance.
Not your balance — your history
Now, a foreign bank account is valued by cumulative deposits since its opening. It is not valued by its closing balance. The history matters in this case, also, in case funds are reinvested in new assets (for example, property sold, proceeds deposited, or new property purchased), the original asset’s value is reduced by the reinvestment amount, and the new asset stands on an independent basis; liability simply follows the money.
Some flexibility on declaration
It is critical to note that even a 20% valuation variance will not void the declaration made. Clearing pending payments is permitted two months post-order, plus two more months at 1% monthly interest, before the benefit eventually lapses.
Hence, the correct categorisation, understanding of tax laws, and valuation concepts, not just disclosure, determine whether you pay ₹1 lakh or 60% tax. Running the numbers now, consulting tax professionals, eliminating doubts, and arriving at accurate calculations beats waiting until the deadline and facing legal and financial complications later due to inaction and uncertainty.
Disclaimer: This article is based on CBDT Notification G.S.R. 732(E) and the related FAQs and is intended for general informational purposes only. It should not be construed as tax or legal advice. Readers are advised to consult a qualified professional before filing.
