The Income Tax Department has sent nudge notices to people holding residential and commercial property in the United Arab Emirates, asking eligible taxpayers to disclose foreign assets through FAST-DS 2026 before the scheme closes on December 31, 2026.
Finance Ministry sources said the department recently contacted selected taxpayers who had invested in UAE property. The notices also reach non-residents and Indian individuals with assets abroad.
They are not tax demand notices. A communication alone does not establish that a property came from undisclosed income or that tax is owed.
The Foreign Assets of Small Taxpayers-Disclosure Scheme, 2026 gives eligible taxpayers a one-time route to declare certain foreign assets and income and make the prescribed payment. The government introduced it under Chapter IV of the Finance Act, 2026.
Eligible taxpayers can complete the process online through the income tax e-filing portal. The scheme provides two routes, depending on the asset’s value, reporting history and funding source.
The funding source determines which disclosure route applies
| Route | Who may use it | Payment and limit |
|---|---|---|
| Undisclosed asset or income | A declaration covering an asset or foreign income not offered to tax, within the scheme’s aggregate limit | Up to Rs 1 crore in aggregate. Tax is 30% of fair market value or undisclosed income, plus an equal additional amount, making the effective payment 60%. |
| Asset omitted from the return | An eligible asset bought with income already taxed in India, or income earned while the taxpayer was a non-resident, but left off the relevant return schedule | Assets valued up to Rs 5 crore can qualify for a flat Rs 1 lakh fee, subject to conditions. The alternative is the Rs 10 lakh annual penalty prescribed under the Black Money Act. |
The routes distinguish an unreported asset or income from an asset whose funding was already taxed, or arose while its owner was a non-resident. The second route addresses an omission from the return schedule; it does not erase the need to meet the scheme’s eligibility conditions.
A valid declaration gives immunity from further assessment, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The scheme is described as online, trust-based and self-declaratory.
Form 1 starts an online process that ends with a separate payment order
A taxpayer must file Form 1 with the required valuation and supporting evidence through the e-filing portal. The online filing route appears under e-File and Income Tax Forms.
After the department accepts a valid declaration, it issues an order setting out the amount payable. Taxpayers then use the Order Copy of Form 2 and challan ITNS 289 through the e-Pay Tax service. The system pre-fills Assessment Year 2026-27 for FAST-DS payments.
Payment can be made before logging in or through a registered e-filing account. The pre-login option requires a valid PAN, the Form 2 order copy, a payment method and a valid mobile number for a one-time password. The logged-in option requires a registered user and the order copy.
Payment Gateway service is available only through authorized banks. Customers using other banks can pay through the Reserve Bank of India’s NEFT or RTGS facility.
The portal shows some overseas reports but not every information stream
Taxpayers can now view and download foreign-jurisdiction asset information mapped to their PAN through the portal. The reports come through the Automatic Exchange of Information framework, commonly referred to as CRS and FATCA, and cover 2022 to 2024.
The displayed records are limited to information received from CRS and FATCA signatories. The department has not displayed data received through other multilateral frameworks, citing risk factors and non-disclosure commitments. It also gathers intelligence from other sources.
The portal records can help taxpayers compare foreign reports with their Indian returns. They do not necessarily capture every detail needed to establish ownership, funding or the tax treatment of a property.
A tax review should trace ownership, funding and income year by year
Chartered Accountant Suresh Surana advises property owners to assess their Indian tax-residency status for each relevant year before deciding whether an omission qualifies for the scheme. He recommends reconciling legal and beneficial ownership, the acquisition date and funding source with the disclosures made in income tax returns.
The review should also check supporting documents, rental income, any sale or transfer, and foreign tax paid or relief claimed. Surana says taxpayers should distinguish an asset bought with explained funds but not reported from an asset or income whose source or tax treatment remains in question.
That distinction can affect eligibility and the amount payable. If FAST-DS does not apply or is unsuitable, Surana advises assessing other corrective options under the applicable law and responding to the department.
Regional committees and outreach are part of the department’s next steps
About 1,100 taxpayers have applied so far, Finance Ministry sources said. Participation has been below expectations, with the scheme’s limitations cited as a factor.
At a high-level meeting on October 23, 2026, the department decided that it may share information from other sources with relevant taxpayers where possible. That could give more taxpayers a chance to review their records and consider a declaration.
The department has also planned outreach for taxpayers, employers, educational institutions, professional bodies and industry associations. The Central Board of Direct Taxes has formed a committee in each region under the Principal Chief Commissioner of Income Tax to address questions and concerns about the scheme.
