Direct Taxation

September 2026

Introduction

by Anjali Darak

Senior Manager - Direct Tax

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS) is a one-time voluntary disclosure initiative introduced by the Government of India to encourage compliance in respect of foreign assets and foreign income.

Effective from 16 August 2026, the scheme provides eligible taxpayers with an opportunity to regularise specified non-disclosures relating to overseas assets and income within a prescribed time frame.

The scheme has been enacted under Chapter IV of the Finance Act, 2026 and operates in conjunction with the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026. It is particularly relevant for taxpayers who may have inadvertently failed to disclose foreign assets, foreign bank accounts, investments, ESOPs, RSUs or overseas income in their income-tax returns.

Subject to prescribed conditions, the scheme offers significant relief in the form of immunity from tax consequences, penalties and prosecution under the Black Money Act, 2015 in respect of valid disclosures.

The framework distinguishes between undisclosed foreign income/assets and assets that were acquired from taxed income but omitted from reporting requirements. Given the strict eligibility conditions, valuation rules and filing timelines, taxpayers should carefully assess their position before making a declaration.

This article provides an overview of the key provisions, eligibility criteria, valuation methodology, compliance process and benefits available under FAST-DS 2026.

Coming to this month’s, Taxation Times, here’s what we have:

An article on “Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS)”
Case Laws from various courts & jurisdictions
Tax Compliance Calendar – September 2026
Circulars & Notifications – August 2026
Tax News from around the world

We hope that you find this month’s edition of the Taxation Times useful. In case you have any feedback or need us to include any information to make this issue more informative, please feel free to write to us at info@uja.in

Happy Reading!

Best Regards,
UJA Tax Team

What is the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS)?

1. Introduction

The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), effective from 16th August to 31st December 2026, gives eligible taxpayers a one-time window to voluntarily declare undisclosed foreign assets and income under Chapter IV of the Finance Act, 2026. It covers two categories: undisclosed foreign assets/income up to ₹1 crore (60% levy) and assets already taxed or acquired while non-resident, up to ₹5 crore (flat ₹1 lakh fee). A valid declaration and payment grants immunity from tax, penalty, and prosecution under the Black Money Act, 2015 – making professional guidance essential before filing. For complete details, refer to the CBDT Official FAST-DS 2026 FAQ Document.

FAST-DS 2026 Has Commenced – Effective From 16th August 2026

The Government has notified a one-time voluntary disclosure scheme under Chapter IV (Sections 130 to 144) of the Finance Act, 2026, read with the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026.

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS) provides a limited window for eligible taxpayers to declare specified foreign assets and foreign income and avail immunity under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Important Dates

Scheme comes into force: 16th August 2026
Last date for filing declaration: 31st December 2026
Valuation date for computing Fair Market Value (FMV): 31st March 2026
No declaration can be filed after 31st December 2026.

Who is Eligible to Make a Declaration?

An “assessee” eligible under the scheme includes:

A person who is resident in India in the relevant previous year, as per Section 6 of the Income-tax Act; or
A Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR) who was resident in India:
- in the previous year to which the undisclosed foreign income relates; or
- in the previous year in which the undisclosed asset located outside India was acquired.
Important: Even a person who is presently a non-resident may be eligible to declare an asset/income if the prescribed residency condition for the relevant year is satisfied.

On What Grounds Can a Declaration Be Made?

A declaration may be made where the assessee:

has failed to furnish a return under Section 139; or
has failed to disclose the asset/income in a return filed before commencement of the scheme; or
such assets or income has escaped assessment under Section 147.

A declaration can be made for any previous year, subject to the prescribed monetary thresholds and other conditions of the scheme.

Two Categories of Declaration – Section 133

Category 1- Undisclosed Foreign Asset / Undisclosed Foreign Income

Aggregate of:
- FMV of undisclosed foreign asset as on 31.03.2026, plus
- undisclosed foreign income
Limit: ≤ ₹1 crore
Amount payable: 30% tax + equal amount
Effective total: 60% of the value/income

Valuation of Assets – Rule 3

Key Principles

The Fair Market Value (FMV) is generally the higher of:

Cost of acquisition
Open market price as on the valuation date, supported by a recognised valuer report from the country where the assets are located.

Where market valuation is not carried out, the indexed cost of acquisition is deemed

to be the FMV.

Specific Valuation Rules Apply To:

Bullion, jewellery, precious stones and artistic works
Quoted and unquoted shares & securities
Immovable property situated outside India
Foreign bank accounts, including prescribed exclusions to avoid double counting
Interest in foreign partnership / AOP / LLP
Residuary assets

All values are required to be reported in Indian Rupees.

Foreign currency conversion shall be made as per the prescribed method using

the RBI reference rate applicable on the valuation date.

A variance of up to 20% between the declared FMV and the value subsequently determined by the Assessing Officer, for assets other than bank accounts, will not by itself invalidate the declaration.

Filing & Payment Process

Step 1: File the declaration electronically in Form 1, along with supporting documents and valuation reports wherever applicable. Multiple assets/income can be declared in a single Form 1.

Step 2: The Income-tax authority issues Form 2, determining the amount payable, within one month from the end of the month in which the declaration is made.

Step 3: Make payment within two months from the end of the month in which Form 2 is received.

Step 4: A further extension of up to two months is available on payment of simple interest @ 1% per month or part thereof.

Step 5: The outer limit for payment is four months from the end of the month in which Form 2 was passed. Beyond this period, the benefit of the scheme is lost.

Step 6: After payment, file Form 3 along with proof/intimation of payment.

Step 7: The authority issues Form 4 – Certificate of Payment.

The entire process is online and administered by the Principal DGIT (Systems) / DGIT (Systems).

Benefits & Immunities on Valid Declaration + Payment

Subject to fulfilment of the prescribed conditions:

Immunity from further tax, penalty and prosecution under the Black Money Act, 2015 in respect of the declared income/asset.
The declared income or amount of investment in the declared asset shall not be included in the total income of the taxpayer under the Income-tax Act or the Black Money Act.
Where assessment proceedings are already pending, the Assessing Officer is required to take the declaration into account while finalizing the assessment.

Important Restriction*

No rectification, revision, set off or any other relief can be claimed in respect of income/asset already assessed once declared under the scheme.

Situations Where the Scheme is Not Available

The scheme does not apply to:

Any income or asset representing proceeds of crime in respect of which proceedings under the Prevention of Money-laundering Act 2002 have been initiated or are pending.
Any income or asset relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act, 2015.

Frequently Asked Questions (FAQ)

Q1. What is FAST-DS 2026?

FAST-DS 2026 is a one-time voluntary disclosure scheme under Chapter IV (Sections 130–144) of the Finance Act, 2026, allowing eligible taxpayers to declare undisclosed foreign assets and income and avail immunity under the Black Money Act, 2015.

Q2. Who is eligible to file a declaration under FAST-DS 2026?

Residents under Section 6 of the Income-tax Act, as well as Non-Residents (NR) or RNORs who were resident in India in the relevant year the asset was acquired or the income arose, are eligible — even if presently non-resident.

Q3. What is the last date to file a declaration under FAST-DS 2026?

The scheme came into force on 16th August 2026, and declarations must be filed by 31st December 2026. No declaration is accepted after this date.

Q4. How much tax is payable under FAST-DS 2026?

For undisclosed foreign assets/income up to ₹1 crore, the payable amount is 30% tax plus an equal amount, totaling 60% of the value. For assets already taxed or acquired while non-resident (up to ₹5 crore), a flat fee of ₹1 lakh applies.

Q5. Does FAST-DS 2026 give immunity from prosecution under the Black Money Act?

Yes. A valid declaration with full payment grants immunity from further tax, penalty, and prosecution under the Black Money Act, 2015, for the declared income/asset, subject to prescribed conditions.

Professional Note

This is a time-bound opportunity for eligible taxpayers.
Taxpayers should carefully evaluate their facts, determine eligibility, compute the valuation correctly and ensure that the declaration is filed within the prescribed window.
Professional advice is strongly recommended before filing the declaration, particularly in cases involving multiple foreign assets, historical transactions, residency issues or valuation complexities recheck all the information twice with respect to other acts.
Don’t let the FAST-DS 2026 window close on unresolved foreign asset disclosures.
Talk to UJA Global Advisory for expert help with eligibility, valuation and filing – and get complete immunity with zero compliance risk. Get in touch today for a confidential consultation.

Case Laws

July 2026

[2026] 189 taxmann.com 556 (Mumbai - Trib.) IN THE ITAT MUMBAI BENCH 'B'
Manish Pushkar Dayal Singhal v. Income-tax officer [12-08-2026]

FACTS :

The assessee, an individual running proprietary concern D.M. Sales Corporation engaged in manufacturing and selling packaging materials, filed return under section 139(1) for AY 2022-23 declaring income of Rs. 3.72 lakhs. The case was selected for CASS scrutiny and assessment under section 143(3) read with section 144B was completed without variation.
During assessment, the AO noted from GSTR-1 that total invoice value was Rs. 11.59 crores inclusive of GST, exceeding the Rs. 10-crore threshold under section 44AB, and initiated penalty proceedings. Relying on section 145A(ii), the AO treated sales inclusive of taxes for determining tax-audit liability and levied Rs. 1.50 lakhs penalty under section 271B.

On appeal, the assessee contended that taxable value was about Rs. 9.83 crores and below the section 44AB threshold. The CIT(A) held that the assessee failed to establish turnover below the prescribed limit and confirmed the penalty.
On appeal to the Tribunal, the assessee contended that GST collected on behalf of Government should not form part of turnover, relying on the ICAI Guidance Note and exclusive method of accounting, and that he had acted under a bona fide belief. The Department contended that section 145A(ii) required inclusion of taxes and that ICAI guidance could not override the Act; it also argued that turnover exceeded Rs. 10 crores even excluding GST.

HELD I:

This is a penalty matter, and the broad issue which needs to be addressed in this context is whether or not the appellant’s failure to get his accounts audited was based on a bona fide belief that he was not liable for tax audit during the year under consideration.
The ICAI Guidance Note on Tax Audit lays down that if GST or any other tax is included in the sale price, no adjustment in respect thereof should be made for considering the quantum of turnover. Tribunal has also seen how the Courts have opined that there is no reason to not accept the meaning of the term ‘turnover’ given by the ICAI.
In this scenario, where two views may be possible, it would be difficult to completely brush aside the appellant’s contention that he was under a bona fide belief that he was not liable to get his accounts audited under section 44AB. Nothing has been brought on record to establish that the appellant deliberately, knowingly or with mala fide intention failed to comply with the requirements of section 44AB.
The present facts and circumstances, therefore, do not warrant the belief that the appellant’s failure to obtain the impugned tax audit report was intentional or contumacious. Accordingly, the explanation offered by the appellant of having acted under bona fide belief amounts to reasonable cause. [Para 8]

In view of the above, the Assessing Officer is directed to delete the penalty levied under section 271B in the appellant’s case. [Para 9]

In Favour of: The assessee

[2026] 189 taxmann.com 494 (Delhi - Trib.) IN THE ITAT DELHI BENCH 'E'
Mysim Therapeutics (P.) Ltd. v. Income-tax Officer [AUGUST 11, 2026]

FACTS:

The assessee, a private limited company, filed its return of income for A.Y. 2022-23 on 19-11-2022, whereas the due date under section 139(1) was 7-11-2022. Form 10-IC and the return were filed after the due date. CPC denied the assessee’s option to be taxed under section 115BAA and processed the return applying 30 per cent tax; the assessee asserted that the normal rate applicable to domestic companies having turnover below Rs. 400 crores was 25 per cent.
The assessee filed a rectification application under section 154, stating that it had intended to opt for section 115BAA and had tried to file Form 10-IC on 7-11-2022 but could not do so due to a technical glitch. The income-tax portal showed that Form 10-IC was created and saved on 7 November 2022, after which the assessee filed Form 10-IC and the return claiming the benefit of section 115BAA.

The Deputy Director of Income-tax, CPC, Bengaluru, passed an order under section 154 dismissing the rectification application and confirming denial of the benefit under section 115BAA.
On appeal, the JCIT(A) upheld the dismissal of the rectification application and the consequent denial of the benefit under section 115BAA.
On appeal to the Tribunal.

Held :

The assessee has made all efforts to file Form 10-IC and that evidence is available on record. In view of the CBDT Circular No.6/2022 dated 17-3-2022 which is for the preceding year, it is applied in this year also for the reason that the assessee has genuinely tried to file Form 10-IC on the due date which was not done due to a technical glitch, whether with the income tax portal or with the computer system of the assessee.
This action of the assessee trying to file Form 10-IC has been proved by showing the date on the income tax portal i.e., 7-11-2022. In view of these facts, the claim of the assessee is allowed and the Assessing Officer is directed to assess the assessee under section 115BBA and allow consequential relief. [Para 5]
In the result, the appeal of the assessee is allowed. [Para 6]
In Favour of: The Assessee

[2026] 189 taxmann.com 381 (Delhi) HIGH COURT OF DELHI
Delhi Tax Bar Association v. Union of India [AUGUST 10, 2026]

Facts :

The assessee, Delhi Tax Bar Association, filed writ against the Income-tax Department wherein interim order was passed directing that returns filed by High Court and Supreme Court Judges under new tax regime should not be processed.
Consequently, respondent-Income-Tax Department moved an application seeking modification of paragraph 17 of the interim order in Delhi Tax Bar Association vs. Union of India.

HELD:

While highlighting that the processing of the Income-Tax Returns is done electronically, through computer generated programming at CPC level and that the software by itself cannot identify which return belongs to a sitting judge of High Court or the Supreme Court, the respondent submitted that if strict compliance of para no. 17 of the order is to be made, the processing of the returns filed by all the assessees is required to be stopped. [Para 3]
It is deemed appropriate to request the Private Secretaries of Hon’ble Judges, who have filed their income-tax returns under the new regime in furtherance of the interim order passed by the Court, to send following details through email to Mr. N. Sairaj [cpc.judicial@incometax.gov.in] [Mob. No:- 8073850090] latest by 18.08.2026:- (i) Name of Hon’ble Judge; (ii) Assessment Year; (iii) Permanent Account Number (PAN); (iv) Date of filing Return; (v) Acknowledgment Number (of Return). [Para 5]
It shall be required of the respondents not to process returns of the judges qua whom such intimation has been received. [Para 6]
It is further ordered that in case any Hon’ble Judge now proposes to file a return/revised return under the new regime in furtherance of the interim order dated 22-07-2026, his/her Private Secretary may also send details, as mentioned in para no. 5 above, within 12 hours of the return having been filed. [Para 7]
It is informed by respondent that the returns are automatically processed and there is every likelihood that by the end of August, 2026, about 98 per cent of the returns would be processed without human intervention. The Court, therefore, orders that:- (a) in case the returns of the Judges covered by the order dated 22.07.2026 and this order have been processed and some demand has been created/raised, the same would be kept in abeyance, pending adjudication of the instant writ petition. (b) If some amount is found refundable, the same shall not be refunded. And in case, the amount has already been refunded, the same shall remain subject to outcome of the present writ petition. [Para 8]
The application stands disposed of, accordingly. [Para 9]

In Favour of: The Assessee

Circular & Notifications August 2026

A. Notifications

NOTIFICATION NO. 114/2026:

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (Chapter IV, sections 130 to 144 of the Finance Act, 2026, read with the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026)

NOTIFICATION NO. 114/2026, DATED 14-08-2026

FAQ’s (Refer attached file).

B. PRESS RELEASE

The income tax department launces nationwide verification of suspicious foreign remittance, DATED 18-08-2026

Various representations are received by TPL Division since Income-tax Act, 2025 has come into force from 01.04.2026 requesting to furnish comments/inputs seeking clarification related to transition provisions under section 536.

In this regard, the undersigned is directed to forward the FAQs related to section 536 of the Income Tax Act, 2025 as per Annexure, for necessary action towards its issuance/publication.
This issue with the approval of the Member(L), CBDT.

Refer attached file

Tax Calendar August 2026

07th September 2026

Form 127: Declaration under section 394(2) of the Act to be made by a buyer for obtaining goods without collection of tax received in the month of August, 2026
Statutory Forms Filling Due Date: Due date for deposit of Tax deducted/collected for the month of August, 2026. However, all sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income tax Challan.

14th September 2026

Form 132: Due date for issue of Certificate under section 395(4) for tax deducted at source in the month of June, 2026

15th September 2026

Advance-Tax Instalment due date: Second instalment of advance tax for the tax year 2026-27 under Income Tax Act, 2025.
Form 1: Monthly statement to be furnished by a stock exchange in respect of transactions in which client codes been modified after registering in the system for the month of August, 2026
Form 137: Due date for furnishing of Form 137 by an office of the Government for TDS/TCS Book Adjustment Statement for the month of August, 2026.

30th September 2026

Form 141	Income Tax Act, 2025	Due date for furnishing of Challan-cum-statement of deduction of tax under section 393(1) [Table Sl. No. 2(i), 3(i), 6(ii) and 8(vi)] in the month of August, 2026.
Form 10	Income Tax Act, 1961	Statement to be furnished to the Assessing Officer/Prescribed Authority under clause (a) of the Explanation 3 to the third proviso to clause (23C) of section 10 or under clause (a) of sub-section (2) of section 11 of the Income-tax Act, 1961 (if the assessee is required to submit return of income on November 30, 2026).
Audit Report SWF	Income Tax Act, 1961	Audit report to be filed by the Sovereign Wealth Fund claiming exemption under clause (23FE) of section 10 of the Income -tax Act, 1961. (if due date of submission of return of income is October 31, 2026).
Form 10B	Income Tax Act, 1961	Audit report under clause (b) of the tenth proviso to clause (23C) of section 10 and sub-clause (ii) of clause (b) of subsection (1) of section 12A of the Income-tax Act, 1961, in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution. (if due date of submission of return of income is October 31, 2026).
Form 10BB	Income Tax Act, 1961	Audit report under clause (b) of the tenth proviso to clause (23C) of section 10 and sub-clause (ii) of clause (b) of sub-section (1) of section 12A of the Income-tax Act, 1961, in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution which is required to be furnished under clause (b) of the tenth proviso to clause (23C) of section 10 or a trust or institution which is required to be furnished under sub-clause (ii) of clause (b) of section 12A (if due date of submission of return of income is October 31, 2026).
Form 10CCB	Income Tax Act, 1961	Audit report under sections 80-I(7)/ 80-IA(7)/ 80-IB/ 80-IC/80-IAC/80-IE (if due date of submission of return of income is October 31, 2026)
Form 10DA	Income Tax Act, 1961	Report under section 80JJAA of the Income-tax Act, 1961 (if due date of submission of return of income is October 31, 2026
Form 10-IJ	Income Tax Act, 1961	Certificate to be issued by accountant under clause (23FF) of section 10 of the Income-tax Act, 1961 (if due date of submission of return of income is October 31, 2026)
Form 10-IL	Income Tax Act, 1961	Verification by an Accountant under sub-rule (3) of rule 21AJA Verification (if due date of submission of return of income is October 31, 2026).
Form 29B	Income Tax Act, 1961	Report under section 115JB of the Income-tax Act, 1961 for computing the book profits of the company (if due date of submission of return of income is October 31, 2026).
Form 29C	Income Tax Act, 1961	Report under section 115JC of the Income-tax Act, 1961 for computing Adjusted Total Income and Alternate Minimum Tax of the person other than a company (if due date of submission of return of income is October 31, 2026).
Form 3AC	Income Tax Act, 1961	Due date for filing audit report under section 33AB(2) (if due date of submission of return of income is October 31, 2026).
Form 3AD	Income Tax Act, 1961	Due date for filing audit report under section 33ABA(2) (if due date of submission of return of income is October 31, 2026).
Form 3AE	Income Tax Act, 1961	Audit Report under section 35D(4)/35E(6) of the Income- tax Act, 1961 (if due date of submission of return of income is October 31, 2026).
Form 3AF	Income Tax Act, 1961	Statement regarding preliminary expenses incurred to be furnished under proviso to clause (a) of sub-section (2) of section 35D of the Income-tax Act, 1961 by the assessee (if due date of submission of return of income is October 31, 2026).
Form 3CA_CD Form 3CB_CD	Income Tax Act, 1961	Due date for filing of audit report under section 44AB for the Assessment Year 2026-27 in the case of a corporate assessee or non-corporate assessee (who is required to submit his/its return of income on October 31, 2026).
Form 3CE	Income Tax Act, 1961	Audit report under sub-section (2) of section 44DA of the Income-tax Act, 1961 (if due date of submission of return of income is October 31, 2026).
Form 3CEA	Income Tax Act, 1961	Report of an accountant to be furnished by an assessee under sub-section (3) of section 50B of the Income -tax Act, 1961 relating to computation of capital gains in case of slump sale (if due date of submission of return of income is October 31, 2026).
Form 56F	Income Tax Act, 1961	Report under section 10AA of the Income -tax Act, 1961 (if due date of submission of return of income is October 31, 2026).
Form 66	Income Tax Act, 1961	Audit Report under clause (ii) of section 115VW of the Income-tax Act, 1961 (if due date of submission of return of income is October 31, 2026).
Form 9A	Income Tax Act, 1961	Application for exercise of option under clause (2) of the Explanation to sub-section (1) of section 11 of the Income – tax Act, 1961 (if the assessee is required to submit return of income on November 30, 2026).

Tax News from Around the World

China Intensifies Scrutiny of Offshore Wealth
China is reportedly undertaking a much broader examination of overseas wealth and unpaid taxes, including overseas capital gains, real estate, equities, cryptocurrencies and offshore trusts. Some investigations reportedly reach back many years.

Foreign Property is Becoming Part of the Transparency Conversation

The OECD has also developed a framework for the automatic exchange of readily available information on immovable property for tax purposes. Historically, foreign real estate was harder for tax administrations to identify than bank accounts, but international information exchange is increasingly addressing that gap.