Tax audit reports for the year ended 31 March 2026 were due on 21 October, and the returns of audited clients now follow on 21 November, after the CBDT extended both dates, as All India Radio reported. For many CAs those two dates sit beside a third. FAST-DS 2026, the one-time scheme that lets small taxpayers declare foreign assets and income missing from earlier returns, closes on 31 December 2026. The Income Tax Department has already emailed taxpayers whose foreign holdings appear in data it receives from other countries, and the questions are now reaching advisors.
The useful work over the next ten weeks is not to push every such client into the scheme. It is to work out which of three kinds of gap each client has, because each leads to a different answer and cost. Clients who sent money abroad under the Liberalised Remittance Scheme have the most to check, since their remittances, and the TCS collected on them, already sit in the Department's records, as our guide to TCS on foreign remittance explains. What often is not on record is the asset the money bought.
What FAST-DS 2026 offers and who can use it
The scheme sits in Chapter IV of the Finance Act, 2026. Its rules were notified on 14 August 2026 and it opened on 16 August, according to the Income Tax Department's FAST-DS FAQs. Residents can use it for any year in which they were resident. Non-residents and RNORs can also use it, as long as they were resident in the year the income arose or the asset was bought. "No declaration can be filed after this date," the FAQs say of 31 December 2026.
A valid declaration gives immunity from further tax, penalty and prosecution under the Black Money Act for the asset or income declared, and the declared amount is not added to total income. The trade-off is finality. A client who declares cannot then seek rectification, revision or relief on assessments already made for that item, and amounts paid are not refunded.
Why the emails arrived now
India receives account data from overseas financial institutions under the Common Reporting Standard and, for the US, under FATCA. In July 2026 the Department began showing this data in each taxpayer's Annual Information Statement, under a Foreign Assets Information report. Its office memorandum of 17 July 2026 says the report covers calendar years 2022 to 2024, with calendar year 2025 to be added once the data arrives in September or October 2026.
On 25 September 2026 the Department followed with emails that open "Our records indicate that you may have overseas financial interests", according to TaxGuru. The email describes itself as an advisory, not a legal notice. The memorandum also warns that the AIS data is not a complete record of foreign assets. A client whose report looks empty may still have something to report in Schedule FA, the part of the return that lists foreign assets.
The three kinds of gap an advisor will find
The first kind is no gap at all. The AIS report matches what the client has shown in Schedule FA and Schedule FSI year after year, so there is nothing to declare. The task here is to reconcile the two, mark any wrong AIS entries through the feedback options on the portal, and keep a note on file.
The second kind is the one LRS investors most often fall into. The money was taxed in India, or earned while the client lived abroad, but the asset it bought never appeared in Schedule FA. The FAQs place this in a separate category with a flat fee of ₹1 lakh, provided the asset is worth ₹5 crore or less on 31 March 2026. For example, a salaried client who remitted ₹40 lakh under LRS to buy US shares, paid TCS on it, and then left the holding out of Schedule FA would usually be in this category. Above ₹5 crore the client cannot use it at all.
The third kind is income or assets that were never taxed in India. Here the scheme charges tax at 30 per cent of the asset value or income, plus an additional amount equal to that tax, with a combined ceiling of ₹1 crore. The Department's own FAQs give the arithmetic. A client with a ₹60 lakh foreign bank account and ₹20 lakh of undisclosed foreign income would pay ₹24 lakh of tax and a further ₹24 lakh, or ₹48 lakh in all. Outside the scheme, TaxGuru notes, the Black Money Act can reach 120 per cent of the value once penalties are added.
How valuation can move a client between categories
The ceilings are hard limits, so valuation can decide eligibility. Most assets are valued at the higher of cost and open-market value on 31 March 2026, converted at the RBI reference rate. Quoted shares use the higher of cost and the average of the day's high and low price, and foreign property needs a valuer's report from the country where it sits.
Foreign bank accounts are the trap. They are valued at the total of all deposits since the account was opened, not at the current balance, although money withdrawn and deposited again is not counted twice. A returning professional with a modest balance in an old salary account abroad may find that ten years of deposits push the figure past ₹1 crore. Separately, the Black Money Act penalties for small holdings do not apply where foreign assets other than immovable property total ₹20 lakh or less, but that relief does not remove the duty to report them.
What advisors should do before 31 December
The sequence below works for most clients. The December deadline is for filing the declaration, while payment follows a Department order and can run into 2027.
- Download each client's Foreign Assets Information report from the Compliance Portal in AIS and compare it, year by year, with the Schedule FA and Schedule FSI already filed.
- Place every gap in one of the three kinds above, and record why.
- Value each asset under the scheme's rules, gathering bank statements from account opening, valuer reports, residency records and proof of the source of funds.
- File Form 1 well before 31 December, then pay within two months after the end of the month in which the Form 2 order arrives. A further two months is allowed at 1 per cent simple interest a month, after which the benefit lapses.
- For audited clients, make sure the return due on 21 November shows every foreign holding in full, so that no new gap opens for the current year.
The scheme carries its own risk. A declaration that turns out to contain a false material particular can be treated as void, and the money paid is not returned. That is a reason to declare only once the facts and valuations are checked, and to leave each client's Indian tax position with the client and their CA. The same reporting discipline applies to clients who own US shares, as our checklist on tax on US stocks in India sets out.
It applies equally to private property abroad. A client who holds US commercial real estate through a blocker corporation, a US company that owns the property interest on the investor's behalf, holds shares in a foreign company, and those shares belong in Schedule FA. Our explainer on US commercial real estate investment for advisors describes that structure. Advisors who introduce eligible clients through Raveum's partner page will see the division of work in practice, because Raveum handles KYC, agreements and US tax forms, while the Indian return stays with the client and their CA.
The three dates in the calendar point to one piece of work. The emails are a prompt, not a verdict, and for most clients the right response is a careful reconciliation rather than a declaration. For the minority with a real gap, FAST-DS 2026 costs far less than the Black Money Act would later, but only if the gap is sorted correctly first. The remittance side of the same client file is covered in our guide to TCS on foreign remittance.
Frequently asked questions
What is FAST-DS 2026 and when does it close?
FAST-DS 2026 is a one-time scheme under the Finance Act, 2026 that lets eligible taxpayers declare foreign assets or income left out of earlier returns. It opened on 16 August 2026 and closes on 31 December 2026, after which no declaration can be filed. Payment follows a Department order and can fall due in 2027.
Is the income tax email about overseas financial interests a notice?
No. The emails sent from 25 September 2026 describe themselves as an advisory, not a legal notice. They are based on account data India receives from other countries. A client should check the Foreign Assets Information report in AIS against past returns, preferably with their CA, before deciding whether any action is needed.
Can a returning NRI use FAST-DS for assets bought abroad?
Yes, in many cases. The scheme is open to non-residents and RNORs who were resident in India in the year the income arose or the asset was acquired. Assets bought from income earned while non-resident but left out of Schedule FA usually fall in the ₹1 lakh fee category, provided their value is ₹5 crore or less.
How much does a client pay under FAST-DS 2026?
It depends on the category. For untaxed foreign assets or income up to ₹1 crore, the client pays tax at 30 per cent plus an equal additional amount, so 60 per cent in effect. For assets bought from taxed income or while non-resident but not reported, up to ₹5 crore, the amount is a flat ₹1 lakh fee.
What are the risks of filing a FAST-DS declaration?
A declaration is final. The client cannot seek revision or relief on assessments already made for the item declared, and amounts paid are not refunded. A declaration containing a false material particular can be treated as void, which removes the immunity. Valuation errors can also push a client past the ceilings, so each figure should be checked first.
Do clients with US real estate investments need to report them in Schedule FA?
Yes. A resident client who holds US property through a blocker corporation holds shares in a foreign company, which belong in Schedule FA every year. The investment itself also carries risks, including loss of capital, illiquidity, falling property values, unpaid distributions and currency movements, so suitability should be reviewed alongside the reporting.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
