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NRI Foreign Asset Disclosure Scheme 2026 (FAST-DS) explained: RNOR eligibility test, Category A/B limits, FEMA risk, and country rules for US, UK, UAE.
The NRI Foreign Asset Disclosure Scheme 2026, officially called FAST-DS, lets eligible taxpayers regularise undisclosed foreign assets for a reduced payment. But here's the catch nobody tells NRIs clearly: if you're an NRI with a foreign bank account, an old 401(k), or RSUs your CA never put in Schedule FA, most of this scheme doesn't even apply to you while you're NRI or RNOR — only to years you were a Resident.
FAST-DS stands for the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 — a one-time, six-month window letting eligible taxpayers regularise undisclosed foreign assets or income for a reduced payment plus statutory immunity.
Here's where the numbering gets confusing. FAST-DS isn't part of the Income-tax Act, 2025, no matter what some portals claim. I checked this myself on the Income Tax Department's own section-lookup page: Section 130, the scheme's short title clause, sits under "Finance Acts, Year 2026," Chapter IV — not the Income-tax Act, 2025. So FAST-DS runs on Sections 130–144 of the Finance Act, 2026, and it works within the separate Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA).
This article's governing law: FAST-DS's own numbers (Sections 130–144) belong to the Finance Act, 2026. The penalty framework it replaces (BMA Sections 3, 41, 42, 43, 49, 50) sits under the Black Money Act, 2015, which the 1961→2025 Act transition hasn't touched.
This is the single most important question for NRIs, and most guides skip right past it. Who exactly does this scheme cover?
Applies to | Does NOT apply to |
|---|---|
Resident and Ordinarily Resident (ROR) taxpayers with undisclosed foreign assets or income from a year they were Resident | Non-residents (NRIs), for years they held NRI status |
Currently-NRI taxpayers, but only for years they were Resident when the asset was acquired or the income was earned | RNOR taxpayers, for the years they qualified as RNOR |
Resident individuals, HUFs, firms, and companies | Cases already under search, survey, or prosecution |
Here's why. The Black Money Act only applies to a taxpayer who is Resident and Ordinarily Resident. RNOR gets carved out of the BMA's own "assessee" definition — so during your RNOR years, you carry no foreign asset disclosure obligation under the BMA at all, and FAST-DS has nothing to fix for that period. What actually matters is your status in the year the asset came in, not your status today — so if you were Resident that year but you're NRI now, the exposure still follows you. Read more on the mechanics in Toolisky's RNOR status guide for NRIs returning from the US.
So the real question isn't "does FAST-DS apply to me" — it's "was I Resident (not RNOR, not NRI) in the year this asset should have been disclosed?" If no, you likely need nothing for that year. If yes, even for one of several years you held the asset, FAST-DS covers that year's exposure.
One genuinely unsettled point: whether OCI cardholders who were never Indian tax residents can use the scheme. Neither the Finance Act text nor CBDT releases address this [VERIFY: OCI eligibility under FAST-DS 2026 — check CBDT FAQs once issued].
The scheme splits declarants into two categories based on whether tax was ever paid on the underlying income.
Category A — never disclosed, never taxed. Your foreign income or asset was neither reported nor taxed anywhere in your Indian return. You're eligible up to ₹1 crore aggregate. Pay 30% tax on the fair market value (as on 31 March 2026) plus a 30% additional charge, so 60% total — a lot better than the 120% you'd owe under the standard Black Money Act route.
Category B — taxed, but Schedule FA missed. The income was genuinely taxed in India already (this happens a lot with ESOPs and RSUs, where TDS was deducted at source), but the asset itself never made it into Schedule FA. Eligible up to ₹5 crore. Payment is a one-time flat fee, widely reported as ₹1 lakh, though CBDT hasn't formally notified the exact figure yet [VERIFY: exact Category B fee amount and any slabs — CBDT rules pending]. Both thresholds and the 60% figure trace back to the Union Budget 2026-27 direct tax highlights on PIB.
Category | Covers | Limit | Payment |
|---|---|---|---|
A | Never disclosed, never taxed | ≤ ₹1 crore | 30% tax + 30% charge = 60% |
B | Taxed, only Schedule FA missed | ≤ ₹5 crore | Flat fee, ~₹1 lakh [VERIFY] |
A separate, standalone relief sits outside these two categories: no prosecution for undisclosed foreign movable assets (excluding immovable property) if the aggregate value is under ₹20 lakh, applied retrospectively from 1 October 2024. No penalty applies either in that band.
Has the window actually opened? As of this writing (22 July 2026), I could not confirm a Gazette notification triggering the six-month window. Multiple sources through June 2026 stated commencement was still pending, and no CBDT notification confirming a start date has surfaced in my research session. Track this yourself on the Income Tax e-Filing portal before filing anything — a declaration made before the official notification date is invalid [VERIFY: FAST-DS 2026 commencement notification — check egazette.gov.in and incometaxindia.gov.in/notifications].
For a side-by-side on both categories with more worked math, Toolisky also has a dedicated FAST-DS 2026 eligibility breakdown.
Hardly any consumer-facing guide mentions this, and for NRIs, it's a big deal. FAST-DS gives you immunity from Income-tax Act and Black Money Act penalties and prosecution. It does not stretch to cover violations under the Foreign Exchange Management Act (FEMA).
Say your asset was funded through a FEMA breach — remittances that went over the Liberalised Remittance Scheme (LRS) cap, or money routed outside RBI's permitted channels. A FAST-DS declaration settles your tax exposure, but your FEMA exposure stays exactly where it was. RBI and the Enforcement Directorate handle FEMA contraventions on a completely separate track, with penalties running up to three times the amount involved. Before you file under FAST-DS, get a CA or FEMA specialist to check whether the funding of the asset is clean, not just whether it was disclosed. RBI's own FAQs on accounts and remittances for residents and non-residents are a good starting reference.
United States (401(k), IRA, RSUs). These become foreign financial assets for Schedule FA the moment you're Resident. Tax already paid on RSU vesting via Form 16, but the brokerage account never in Schedule FA, is Category B. See Toolisky's 401(k) tax guide for NRIs (Section 89A/158).
United Kingdom (pensions, ISAs). UK pensions and ISAs held during NRI years fall outside disclosure for that period. The obligation starts only once you're Resident; UK tax paid can usually be claimed via DTAA and Form 67.
UAE (property, bank balances). Since the UAE levies no personal income tax, "already taxed" rarely applies — most undisclosed UAE assets land in Category A, not B, since no tax was paid anywhere on the underlying income.
Example 1 — the common case. Ramesh worked in Dubai for six years, returned to Pune in 2023, and became Resident. He held a UAE bank account with ₹35 lakh, never reported after becoming Resident, with no tax paid anywhere on the interest. Never disclosed or taxed means Category A. Payment: 30% of ₹35 lakh (₹10.5 lakh tax) + 30% of ₹35 lakh (₹10.5 lakh charge) = ₹21 lakh total. Without FAST-DS: 120% of ₹35 lakh, ₹42 lakh, plus prosecution risk.
Example 2 — the edge case most guides skip. Farida returned from the US in 2022, cleared RNOR by FY 2024-25, and became full ROR from FY 2025-26. Her US 401(k), worth ₹1.8 crore, correctly wasn't taxed during RNOR, but she missed both Form 10-EE and Schedule FA in her first ROR-year return. Since the only lapse is the missing disclosure, not unpaid tax, she qualifies for Category B — a flat ₹1 lakh fee covers it, since her asset sits well under the ₹5 crore ceiling.
Since the declaration form hasn't been notified yet, here's the formula to work with:
Category A: Payable = 30% × fair market value (or undisclosed income) + 30% × the same base. In short, FMV × 0.60.
Category B: A flat compounding fee applies per declaration, regardless of asset value, as long as you're within the ₹5 crore ceiling.
Before the window opens:
List foreign assets held during Resident years only — exclude NRI or RNOR years.
Check whether tax was paid on the underlying income (Category B) or not (Category A).
Get the FMV as on 31 March 2026 for each asset.
Confirm your FEMA funding route is clean, separately from the tax question.
Watch the Income Tax e-Filing portal for the notification.
You held the asset across NRI, RNOR, and Resident years. Only the Resident-year portion needs FAST-DS. Work out which years you were Resident using the RNOR tests, and declare only that exposure.
You're unsure if FEMA is clean. Get this checked before filing — a FAST-DS declaration doesn't shield separate FEMA proceedings, which run on RBI's own compounding timeline.
You missed the six-month window once it opens. Full Black Money Act exposure returns: 120% liability plus prosecution risk, with no extension indicated for this cycle.
PAN and travel records establishing Resident/NRI/RNOR status by year
Foreign bank statements or account-opening documents per asset
ESOP/RSU vesting statements, Form 16, or Form 26AS showing tax paid (Category B)
Property deeds for foreign immovable assets
Prior ITRs and Schedule FA filings, or proof none was filed
FMV valuation as on 31 March 2026, once the methodology is notified
Digital copies are expected to be accepted once e-filing opens [VERIFY: confirm once the declaration form is notified].
Staying outside FAST-DS means falling back on the Black Money Act, 2015 in full. Under Sections 42-43, a Resident who fails to report a foreign asset faces a ₹10 lakh penalty per year, waived only if total foreign movable assets are under ₹20 lakh. Sections 3 and 41 impose a flat 30% tax plus a 90% penalty, for 120% total exposure, no deductions allowed. Sections 49-50 carry criminal prosecution of 3-10 years, relaxed only where undisclosed movable assets total under ₹20 lakh.
Only for years you were Resident, not your NRI years. If you acquired the asset or earned the income entirely while NRI, the BMA never applied to that period, so there's nothing to regularise there.
Yes, but only for years after RNOR ends and you become full Resident and Ordinarily Resident. RNOR years are exempt from the BMA entirely, so FAST-DS has no role there.
That it's broadly "for NRIs." It isn't — it's for Resident taxpayers with legacy non-disclosure. The NRI angle matters only because so many current NRIs and RNOR-turned-Resident people have this exact gap once their status changes.
No. It grants immunity from Income-tax Act and Black Money Act penalties and prosecution only. FEMA contraventions like LRS-limit breaches are handled separately by RBI and the Enforcement Directorate.
The tax and FEMA tracks run independently, so a pending FEMA compounding case shouldn't by itself block a FAST-DS declaration, but confirm with a professional given how fact-specific FEMA outcomes are [VERIFY: interaction between pending FEMA compounding and FAST-DS eligibility].
That's Category B. The flat fee is a one-time payment covering all years of that lapse, not a per-year charge.
Yes. Vested ESOPs and RSUs from foreign employers count as foreign financial assets, regularised under the relevant category depending on whether tax was already paid.
Not established yet. Eligibility runs on tax residency, not OCI status, and CBDT hasn't clarified this.
Full Black Money Act provisions apply: 120% liability, per-year ₹10 lakh penalties, and prosecution risk, with no further amnesty confirmed for this cycle.
Declare within the notified window and qualify (Resident years only), and you get 60% (Category A) or the flat fee (Category B). Miss the window or fall outside eligibility, and the BMA's full 120% liability and prosecution provisions apply by default.
Map out exactly which years you held each foreign asset as NRI, RNOR, or Resident — that alone tells you how much of your holding actually needs the NRI Foreign Asset Disclosure Scheme 2026. Toolisky's FAST-DS 2026 eligibility breakdown can help you work out your category and rough amount once you've sorted your years. Track the real commencement date only on the official Income Tax e-Filing portal.
For educational purposes only. Verify all figures at official sources before acting. Toolisky is not affiliated with any government body. Consult a qualified CA or legal professional before making compliance decisions. See toolisky.com/accuracy-and-limitations.
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