FAST-DS 2026: Sixty Days to Fix Undisclosed Foreign Assets — A Guide for RSU Holders and Returning NRIs

Every year, Indian residents with RSUs, ESPPs, US brokerage accounts or old overseas bank accounts are required to list those holdings in Schedule FA of their income-tax return. Many never did — often not from any intent to hide anything, but because nobody told them. The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS) is the government's one-time offer to clean that up on defined terms.

The details below are drawn from the CBDT notification as reported by the sources listed at the end, and from the department's own FAQ as quoted in the press. They are secondary sources, so confirm the specifics against the notification and the official FAQs before filing. Nothing here is tax advice for your situation.

1. What the Scheme Is

FAST-DS is a one-time, voluntary scheme created under Chapter IV of the Finance Act, 2026, announced in the 2026–27 Budget. The CBDT notified it through Notification No. 114/2026 dated August 14, 2026, effective August 16, 2026. Declarations are filed online, and assets are valued as at March 31, 2026 under the scheme's valuation rule. A valid declaration, with the prescribed payment, gives immunity under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 for the income or asset covered.

2. Who It Is Meant For

A person who was resident in India in the relevant year and meets the conditions can use it. Someone who is now a non-resident or RNOR can also qualify if they were resident when the income arose or the asset was acquired; residence is tested year by year. The department's FAQ names the typical cases:

• Employees of multinational companies who received foreign RSUs or ESOPs.
• Former students who kept overseas bank accounts after returning.
• Returning NRIs with foreign savings, brokerage balances or insurance policies.
• Employees who were deputed abroad.

3. The Two Categories

*Measured as at March 31, 2026. If the same asset stayed undisclosed across several years, the ₹1 lakh fee is reported to apply once, for the first year of non-disclosure.

Two worked examples

• The department's own example (Category 1): an undisclosed foreign bank account of ₹60 lakh plus undisclosed foreign income of ₹20 lakh is ₹80 lakh in total. At 60%, the payment is ₹48 lakh.
• The common RSU case (typically Category 2): an employee whose RSUs vested while resident, with the vest value already taxed as salary in India, but whose resulting US shares were never listed in Schedule FA. The source of the asset is taxed income; only the disclosure was missed. The cost is the flat ₹1 lakh, provided the aggregate stays within ₹5 crore. Which category applies depends on your facts, and that call belongs with a chartered accountant.

4. What Immunity Covers — and What It Does Not

• Covered: further tax, penalty and prosecution under the Black Money Act for the specific income or asset declared. The declared income, or the amount invested in the asset, is reported to be excluded from total income for the relevant purposes.
• Conditional: immunity is not complete on filing Form 1 alone. It depends on a valid declaration, the prescribed payment and finishing the process. A declaration can be invalidated if material particulars are false.
• Excluded: assets that are proceeds of crime under the Prevention of Money Laundering Act, 2002, and cases where a Black Money Act assessment for the relevant year is already complete.
• Not a reset button: FAST-DS addresses specified past omissions. It does not replace Schedule FA reporting going forward. Every future return still has to disclose your foreign holdings.

5. The Process, Step by Step

1. Form 1 — the online declaration with supporting documents, filed between August 16 and December 31, 2026.
2. Form 2 — the order stating the amount payable, issued within one month from the end of the month in which Form 1 was filed.
3. Payment — through the prescribed challan (ITNS 289). The official FAQ warns that a payment under the wrong minor head cannot be corrected or refunded. Press coverage reports a two-month payment window, extendable by two further months at 1% simple interest per month.
4. Form 3 — intimation of payment, within four months from the end of the month of Form 2.
5. Form 4 — the certificate confirming the declaration and payment, issued after verification.

6. What Happens If You Do Nothing

Under the Black Money Act, failing to disclose a foreign asset can attract a penalty of ₹10 lakh per year, and undisclosed foreign income can be taxed at 30% with a further penalty of three times the tax, with prosecution risk in serious cases. There is a relaxation: since October 1, 2024, the ₹10 lakh penalty is not applied where total foreign assets, other than immovable property, are ₹20 lakh or less, and bank accounts whose balance never exceeded ₹5 lakh during the year are also outside it. If your holdings are small and all your income was taxed, you may be in that safe zone — but that is a conclusion to confirm, not assume.

The department has also been running NUDGE-style campaigns, sending SMS and email alerts to taxpayers whose foreign holdings surfaced through information received from other countries. An empty-looking AIS (Annual Information Statement) is not a clean bill of health.

7. A Sixty-Day Checklist

• This week: list every foreign account and holding you have had since you became resident — US brokerage, employer stock-plan accounts, bank accounts, insurance, old student accounts.
• By mid-November: gather broker statements, annual tax forms, grant and vest histories, and your Form 16 perquisite details. Pull your past Schedule FA filings and compare them line by line.
• Establish residence year by year and the source of funds for each asset, so the category can be decided.
• Engage a chartered accountant early. Valuation as at March 31, 2026 follows a prescribed method, and foreign-currency amounts need prescribed conversion rates; current market value or cost should not simply be used.
• Aim to file by mid-December, not December 31. Portals slow down in the final days and a payment under the wrong head cannot be undone.
• Fix the habit: from your next return, report all foreign assets in Schedule FA every year, even if they earned nothing and even if you sold nothing.

The Bottom Line

If you are an Indian resident holding US shares through an employer or a broker and you have never reported them, this window is the most favourable terms you are likely to see: for the common RSU case, a flat ₹1 lakh against an exposure measured in lakhs of rupees of penalty per year. It is also a closing window — December 31 is a firm date, and the paperwork takes weeks, not days. The first step costs nothing: write down what you hold, where, and since when.