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The Central Board of Direct Taxes' (CBDT) one-time disclosure scheme for small taxpayers with undisclosed foreign assets or income will come into force from August 16, giving eligible taxpayers until December 31, 2026, to make declarations and avail immunity from further tax, penalty and prosecution under the Black Money Act.
The Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS), 2026, allows eligible taxpayers to voluntarily declare certain undisclosed foreign assets, foreign income or overseas assets that were not reported in the relevant schedule of their income-tax returns, according to FAQs issued by the CBDT. For undisclosed foreign assets or foreign income that was not offered to tax, the aggregate value eligible for declaration must not exceed Rs 1 crore. "The aggregate value of the undisclosed asset located outside India (as on 31st March, 2026) and the undisclosed foreign income must not exceed 1 crore," the FAQs said. Taxpayers under this category will have to pay tax at 30 per cent of the value of the undisclosed foreign asset or income, along with an additional amount equal to the tax payable, effectively taking the total payment to 60 per cent. The scheme also covers foreign assets that were acquired from income already offered to tax or when the taxpayer was a non-resident but were not disclosed in the relevant schedule of the income-tax return. For such cases, assets located outside India with an aggregate value of up to Rs 5 crore can be declared by paying a flat fee of Rs 1 lakh. Taxpayers with foreign assets exceeding Rs 5 crore under this category will not be eligible. Declarations will have to be filed electronically in Form 1. March 31, 2026, has been fixed as the valuation date for determining the fair market value of assets. Supporting documents and valuation reports will have to be uploaded where applicable. After verification, the income-tax authority will communicate the amount payable through Form 2. Taxpayers will generally get two months to make the payment, with a further period of up to two months available on payment of simple interest of one per cent for every month or part of a month of delay. A valid declaration and payment will provide immunity from further tax or penalty and prosecution under the Black Money Act in respect of the declared income or asset, the FAQs said. (ANI)
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