Income Tax department nudges taxpayers to disclose overseas properties

Under the one-time FAST-DS scheme, eligible taxpayers can disclose specified foreign assets by 31 December, with tax and penalty relief for qualifying declarations.

NEW DELHI: The Income Tax Department has nudged select taxpayers who invested in residential and commercial properties in the United Arab Emirates (UAE) to disclose their overseas assets under a one-time compliance scheme, a senior government official said.

The move comes ahead of the 31 December deadline for the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), which gives eligible taxpayers an opportunity to disclose specified foreign assets and income that were not reported or taxed appropriately.

The department has also decided to share information about overseas assets with relevant taxpayers, wherever possible, to help them take advantage of the scheme, the official said.

The decision was taken at a high-level meeting on 23 October, the official added.

The department currently displays on its e-filing portal information received from foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework, including the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA).

Taxpayers can log in to the portal and download information about assets reported against their permanent account numbers (PANs) for 2022-2024.

However, the department also receives information under other multilateral frameworks and intelligence from other sources. Such information is not displayed on the portal because of risk-related factors or non-disclosure commitments, the official said.

The Central Board of Direct Taxes (CBDT), the department's apex policy-making body, has planned outreach programmes for taxpayers, corporates and employers, educational institutions, professional bodies and industry associations. It has also constituted a committee in each region under the principal chief commissioner of income tax to address taxpayers' queries and concerns.

Queries sent to the finance ministry's spokesperson remained unanswered until press time.

Scheme provisions

FAST-DS was introduced under the Finance Act, 2026, to provide a time-bound opportunity to eligible taxpayers to regularise specified past omissions relating to foreign assets and income. The scheme distinguishes between undisclosed assets and income, and certain assets acquired using income earned while the taxpayer was a non-resident or income already taxed in India but omitted from the relevant disclosure schedule.

For undisclosed foreign assets and income, eligible taxpayers must pay tax at 30% of the applicable value, along with an additional amount equal to the tax paid. This category is subject to an aggregate value limit of ₹1 crore.

A separate category covers specified foreign assets worth up to ₹5 crore acquired from income earned while the taxpayer was a non-resident or from income already offered to tax in India. Eligible declarations under this category attract a fixed fee of ₹1 lakh.

The scheme also allows taxpayers to report accounted foreign assets and income by paying a fee of ₹1 lakh, avoiding the penalty of ₹10 lakh for each year prescribed under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. A valid declaration provides immunity from further assessment, penalty and prosecution under the Act.

According to experts, the scheme could help taxpayers who acquired assets using explainable income but failed to report them in their returns regularise the omissions, while encouraging better future compliance.

“It will also help in better future compliance. There could be two positive externalities of this move — first, an increase in the tax base owing to declaration requirements that may now be better met under LRS; and second, it could lead to a deterrence in foreign property purchases owing to steep 20% TCS that could put the brakes on remittances under LRS and save some forex outflows,” said Ranen Banerjee, partner and leader, economic advisory, PwC India.

The Black Money Act was enacted to address undisclosed foreign income and assets held by resident taxpayers. FAST-DS provides a limited-time opportunity to eligible taxpayers to regularise specified past omissions.

About the Author

Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.