Income-tax Return (ITR) Forms 2 and 3 contain Schedule FA for reporting foreign assets, income and beneficial ownership. This schedule was introduced to address tax evasion and money laundering and has been part of the ITR forms since FY 2011-12 (AY 2012-13). In this schedule, individuals (ordinarily resident in India) must provide information about their foreign assets and income, regardless of whether the income is taxable in India. Failure to provide accurate information in Schedule FA can result in a penalty of Rs 10 lakh. Additionally, the individual may face imprisonment for six months to seven years, along with fines.
To provide amnesty to small taxpayers, the Budget 2026 introduced the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (‘FAST Scheme’). This scheme, which came into force on 16th August 2026, provides a one-time voluntary disclosure window. A declaration can be filed under this scheme between 16th August and 31st December 2026, and no declaration can be filed after that date. For a taxpayer with a modest foreign bank account or an unreported overseas investment, this Scheme provides a last opportunity to avail immunity from penalty and prosecution for non-disclosure in Schedule FA in earlier years.
