Decoding FAST-DS calculation: Will ₹1 crore disclosure cost you ₹60 lakh tax or just ₹1 lakh?

The recent notification of the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) by the Income Tax Department has triggered a wave of queries from taxpayers holding undisclosed foreign assets, with many confused about whether coming clean under the government's new disclosure scheme could cost them 60% of the undisclosed assets or just ₹1 lakh. The answer depends entirely on the category under which the asset falls.

The FAST-DS allows eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets until December 31, 2026. The scheme has two distinct categories of declaration, each with very different financial implications.

"FAST-DS 2026 provides for 2 categories of declarations, depending on the nature and source of the foreign asset/income. Each category is subject to a prescribed aggregate monetary threshold and a corresponding tax/fee payable," RSM India, a tax and consultancy firm, said in a report.

The amount payable under both categories is summarised below:

Here, taxpayers should understand the following key words of the FAST-DS scheme:

• Undisclosed asset located outside India: This means an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in such asset or the explanation given by him is unsatisfactory in the opinion of the Assessing Officer.

• Undisclosed foreign income: This means the total amount of income of an assessee from a source located outside India which was chargeable to tax in India but has not been offered to tax under the ITA 1961.

What is the monetary threshold for declaration under FAST-DS?

According to RSM India, the monetary threshold under the scheme applies on an aggregate basis across all relevant previous years. "Accordingly, the ₹1 crore limit for Category 1 is to be tested by aggregating all undisclosed foreign income and foreign assets proposed to be declared and is not available separately for each previous year."

Similarly, the ₹5 crore limit for Category 2 applies to the aggregate value of eligible foreign assets covered under that category.

Decoding the calculation

The confusion stems from the fact that the same undisclosed asset can attract wildly different payouts depending on whether the asset was undisclosed for tax purposes or merely omitted from a reporting schedule.

The first category covers an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax. The aggregate value of such assets and income must not exceed ₹1 crore, computed as on the valuation date of March 31, 2026.

The amount payable here is the aggregate of two components: tax at 30% of the value of the undisclosed asset or income, and an additional amount equal to 100% of that tax. In effect, the total outgo works out to 60% of the declared value.

Extrapolating from this, a taxpayer with a single undisclosed foreign asset worth ₹1 crore would pay ₹30 lakh as tax and another ₹30 lakh as the additional amount, bringing the total to ₹60 lakh.

The second category is where the ₹1 lakh figure comes in. This covers "an asset located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant Schedule of the return".

For this category, the monetary threshold is significantly higher: The aggregate value of assets must not exceed ₹5 crore. The amount payable is a flat fee of ₹1 lakh.

So if a taxpayer bought a property abroad while he was a non-resident, using income that was already taxed in India, but failed to report it in the foreign assets schedule of his income tax return, the asset can be regularised for just ₹1 lakh, even if the property is worth ₹3 crore. However, if the same asset was acquired from income that was never offered to tax, it falls under Category 1, and the cost jumps to 60%.