FAST-DS 2026 — The ₹1 Lakh Fix for a Missed Schedule FA on Your RSUs and ESPPs

Every filing season we open a client's Fidelity or E*TRADE statement, tick off the perquisite in Form 16, tick off the capital gains in Schedule CG, and then find Schedule FA has been blank for five straight years. The tax was paid. The disclosure was not made. Until now the only honest answer to that client was ₹10 lakh a year under the Black Money Act. The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 changes that answer to a flat ₹1 lakh — for anyone who acts before 31 December 2026.

What FAST-DS Actually Is

FAST-DS sits in Chapter IV of the Finance Act, 2026, at Sections 130 to 144. The machinery comes from the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026, notified by G.S.R. 732(E) dated 14 August 2026 (Notification No. 114/2026). It is a one-time window, not a permanent facility.

The whole process is electronic. The prescribed authority is the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems). Your jurisdictional Assessing Officer does not process the declaration, though he is required to take it into account if an assessment for that year is already running.

Date	What It Means
16 August 2026	Scheme came into force. No declaration filed before this date counts.
31 March 2026	Valuation date. Every asset is valued as it stood on this day, whatever happened afterwards.
31 December 2026	Last date. Form 1 cannot be filed after this, and there is no extension mechanism in the Rules.

Notice the oddity in the middle. The valuation date sits before the scheme opened. So the number you declare is frozen at 31 March 2026 even if the shares have doubled since, or crashed.

Who Can Declare — Including Non-Residents and RNOR

An assessee can declare if he is resident in India under Section 6 of the Income-tax Act, 1961 in the relevant previous year. That is the straightforward case.

The scheme also reaches people who are no longer resident. A non-resident, or a resident but not ordinarily resident under Section 6(6), can declare provided he was resident in India in either of these years:

• the previous year to which the undisclosed foreign income relates; or
• the previous year in which the undisclosed foreign asset was acquired.

This matters a lot in practice. A software engineer who worked in Bengaluru until 2022, accumulated RSUs, moved to Singapore or Dubai in 2023 and is now a non-resident can still come clean for the years he was resident. Form 1 has a field for residential status in the year of acquisition, and a passport upload requirement that kicks in when you claim non-residence for any declared year.

On What Grounds Can a Declaration Be Made

Any one of these three situations opens the door:

• you failed to furnish a return under Section 139 at all;
• you filed a return but did not disclose the asset or income in it; or
• the asset or income has escaped assessment within the meaning of Section 147.

The second limb is the one that catches almost every RSU holder. The return was filed. The salary was right. The capital gains were right. Schedule FA was left empty.

The Two Tracks — 60% of Value vs a Flat ₹1 Lakh

Section 133 contains a table with two serial numbers. Everything about your cost turns on which one you fall into, and the gap between them is enormous. Read this table twice.

	Table Sl. No. 1	Table Sl. No. 2
What it covers	Undisclosed foreign asset, or undisclosed foreign income, that was never offered to tax	Foreign asset already taxed, or acquired while non-resident, but never declared in the relevant schedule of the return
Ceiling	₹1 crore aggregate (asset value on 31.03.2026 plus undisclosed income)	₹5 crore aggregate asset value on 31.03.2026
Amount payable	30% tax plus a penalty equal to that tax. Effectively 60% of value.	Flat fee of ₹1,00,000
Form 1 type code	Types 1 and 2	Types 3 and 4

Both tracks can sit inside one Form 1. Part C of the form has separate lines for the Track 1 combined value (capped at ₹1 crore) and the Track 2 combined value (capped at ₹5 crore), and Part D adds the two amounts payable together at row 7.

The RSU and ESPP Track, in Plain English

Here is the part of the scheme most commentary has skipped, and the reason we wrote this article at all.

Form 1 asks you to pick one of four types of asset or income. Type 4 reads: an asset located outside India acquired from income which has been offered to tax under the Income-tax Act, 1961 by the assessee, but such assets were not declared by him in the relevant schedule in the return of income.

Read that against the position of a typical Indian employee holding foreign stock:

• RSUs vested. The employer valued the perquisite under Section 17(2)(vi), added it to Form 16 and deducted TDS on it. Income offered to tax.
• Some shares were sold. Capital gains were computed and reported in Schedule CG. Income offered to tax.
• The shares sitting in the Fidelity, Morgan Stanley, Schwab, EquatePlus, Computershare, Merrill or UBS account were never entered in Schedule FA. Asset not declared in the relevant schedule.

That is Type 4, word for word. Which routes to Table Sl. No. 2. Which is a flat ₹1 lakh — whatever the number of years, whatever the number of brokers, whatever the number of tickers — so long as the aggregate value on 31 March 2026 stays under ₹5 crore.

Type 3 covers the adjacent case: shares acquired from income that arose outside India while the assessee was a non-resident, not declared in Schedule FA after he became resident. Same table, same ₹1 lakh. This is the returning NRI who kept a US brokerage account from a previous stint abroad.

Valuation Under Rule 3, Asset by Asset

Rule 3 prescribes a method for each class of asset. The pattern repeats: fair market value is the higher of cost of acquisition and an open market figure, and where no market valuation is carried out, the indexed cost of acquisition is deemed to be the fair market value.

Asset	Fair Market Value on 31.03.2026	Valuation Report?
Quoted shares and securities	Higher of cost of acquisition and the average of the lowest and highest price quoted on an established securities market on 31.03.2026	No
Quoted shares, no trade on 31.03.2026	Average of lowest and highest price on the nearest preceding date on which they traded	No
Unquoted equity shares	Higher of cost and the formula value (A + B − L) × PV ÷ PE	Yes, if formula route used
Unquoted shares other than equity	Higher of cost and open market price on 31.03.2026	Yes
Immovable property	Higher of cost and open market price, valued by a valuer recognised by the government of the country where the property is located	Yes
Bullion, jewellery, precious stones	Higher of cost and open market price on 31.03.2026	Yes
Artistic work, paintings, sculptures, archaeological collections	Higher of cost and open market price on 31.03.2026	Yes
Account with a bank	Sum of all deposits from the date of opening to 31.03.2026, with two exclusions	No
Interest in a foreign firm, AOP or LLP	Net assets allocated first in capital ratio, residue per the agreement or the profit-sharing ratio	Effectively yes
Any other asset	Higher of cost or amount invested, and arm's length open market price on 31.03.2026	Yes
Asset sold before 31.03.2026	Higher of cost of acquisition and the sale price — Rule 3(2)	No

What Counts as an Established Securities Market

Explanation 1 to Rule 3 defines this tightly. An established securities market is an officially recognised exchange, supervised by a governmental entity in the country where it is located, with annual value of shares traded exceeding one billion US dollars in each of the three calendar years immediately preceding the valuation date. The NYSE, NASDAQ, LSE, Euronext, SIX and the Tokyo Stock Exchange all clear that bar without argument.

The same Explanation defines a quoted share as one with a meaningful volume of trading on an ongoing basis, meaning trades on at least sixty business days during the prior calendar year, with the aggregate traded volume for the class reaching at least ten per cent of the average shares outstanding. Standard mega-cap employer stock passes easily. A thinly-traded foreign small cap may not, and then the unquoted route applies with its valuation report.

Sold Before the Valuation Date

Rule 3(2) is the sting for anyone who assumed a clean exit solved the problem. Where an asset other than a bank account was transferred before 31 March 2026, its fair market value is the higher of cost of acquisition and the sale price. If it was transferred without consideration or for inadequate consideration, the value is the higher of cost and the fair market value on the date of transfer, which shuts the obvious gifting escape.

The Exchange Rate Trap — RBI Reference, Not SBI TT

If you file RSU returns regularly, you have Rule 115 of the Income-tax Rules burned into your workflow: SBI TT Buying rate, last working day of the month preceding the transaction month. Put that aside for FAST-DS. It does not apply here.

The permitted currencies are those designated by the Reserve Bank under the Foreign Exchange Management (Deposit) Regulations, 2016. USD, EUR, GBP, JPY, CHF, SGD, AUD, CAD and HKD are all covered, which handles the overwhelming majority of employee stock plans. If the central bank of the relevant country does not publish a local-currency-to-USD rate, the proviso to Rule 3(5) allows a rate specified by any other bank regulated under the laws of that country.

The 20% Variance Safe Harbour

Rule 5(2) gives useful cover. Where the fair market value of an asset declared in Form 1 differs from the value later determined by an Assessing Officer during any assessment or inquiry, the declaration is not to be treated as invalid or void on grounds of misrepresentation, suppression of facts, or furnishing false material particulars, purely because of that difference, provided the difference does not exceed twenty per cent of the declared value.

Two limits on that comfort. The safe harbour excludes bank accounts entirely. And it protects only against invalidation on the ground of variance. It is not a licence to under-declare by nineteen per cent.

Bank Accounts Are Valued on Deposits, Not Balance

This is the harshest rule in the scheme, and the one clients find hardest to believe. Under Rule 3(1)(e), the value of an account with a bank is the sum of all deposits made into it from the date it was opened until 31 March 2026. Not the closing balance. Not the peak balance. Every deposit, added up, across the entire life of the account.

Two exclusions soften it:

• Where the account was declared earlier under Chapter VI of the Black Money Act, 2015 and tax and penalty were charged on the value so computed, only deposits made since the date of that earlier declaration are aggregated.
• Where a deposit is made from the proceeds of a withdrawal from the same account, that deposit is left out. This stops churn inflating the number.

Is a Brokerage Account a Bank Account?

Practically, this question decides whether an RSU holder is looking at a manageable number or an absurd one. Rule 3(1)(e) speaks of an account with a bank. A stock plan account with Fidelity, Morgan Stanley, Charles Schwab, Computershare, Merrill or EquatePlus is a broker or transfer agent account, not a bank account, and none of these plan administrators is a bank in the relevant sense for a stock plan participant account.

On that reading, the shares in the account are valued under Rule 3(1)(c) as quoted shares and securities, and any residual cash balance falls under Rule 3(1)(g) as any other asset. That produces a rational figure. Treating the account as a bank account and summing every credit since inception would capture every vesting, every dividend and every sale proceed, which grossly overstates the position and, in many cases, would push a taxpayer over the ₹5 crore cliff for no reason found in the statute.

Rule 3(3) — Stopping the Same Money Being Counted Twice

Where a new asset was acquired out of the sale proceeds of an old asset, or out of a withdrawal from a bank account, the fair market value of the old asset or the bank account is reduced by the amount reinvested. Without this, a single pool of money that moved from property to bank to property would be counted three times.

The same principle applies to income. Where undisclosed foreign income of ₹70 lakh earned in 2022 was used to buy a foreign immovable property for ₹60 lakh in 2023, and that property is worth ₹80 lakh on the valuation date, the income is declared at ₹10 lakh and the property at ₹80 lakh.

Forms 1 to 4 and the Payment Clock

Four forms, in sequence, all electronic.

Form	Who Files It	Timing
Form 1 — declaration	Declarant	Between 16.08.2026 and 31.12.2026
Form 2 — order determining amount	Income-tax authority	Within one month from the end of the month in which the declaration was made
Form 3 — intimation of payment	Declarant	Within the period allowed for payment, with proof of payment attached
Form 4 — order certifying payment	Income-tax authority	Within one month from the end of the month in which Form 3 was received

What Form 1 Demands

Part A takes basic details: name, address, PAN, and passport number with an upload where non-residence is claimed for any declared year. Part B takes the type of asset or income, the relevant previous year of acquisition or earning, residential status in that year, an upload of documents evidencing acquisition, and the nature of the asset from the list A1 to A6 plus I1 for income. Part C summarises values against the two ceilings. Part D computes the amount payable.

The Annexure to Form 1 goes deep. For shares and securities alone it asks for issuer name, number of shares, type of security, the established securities market where quoted, country of that market, names under which held, cost of acquisition, dates of acquisition, the Rule 3 determined value, date of valuation and final fair market value. Reconstructing that across six years of vesting lots is not a one-evening job, which is a practical argument for starting well before December.

The verification carries a specific certification that Section 140 of the Finance Act, 2026 is not attracted. Section 140 is the provision that puts the scheme out of reach in the situations set out in Section 11 below. That is a personal certification by the declarant, so it needs to be checked properly and not signed reflexively.

The Payment Clock

What Immunity You Get, and What You Do Not

Form 4 certifies three things once payment is made: the sum paid in full and final settlement, the validity of the Form 1 declaration for the purposes of Section 139 of the Finance Act, 2026, and immunity from levy of any further tax or penalty and from prosecution for any offence under the Black Money Act, 2015.

What You Get

• No further tax or penalty under the Black Money Act on the declared income or asset.
• No prosecution for any offence under the Black Money Act in respect of what was declared.
• The declared income, or the amount of investment in the declared asset, is not included in your total income under the Income-tax Act, 1961 or the Black Money Act, 2015.
• Where an assessment under either Act is already pending for the relevant year, the Assessing Officer is required to take the declaration into account while finalising it.

What You Do Not Get

• Any rectification or revision of an assessment already made under the Income-tax Act, 1961 or the Black Money Act, 2015 in respect of the declared income or asset.
• Any set-off or relief in an appeal, reference or other proceeding relating to such an assessment.
• Any refund of what you pay under the scheme, in any circumstances.
• Immunity under the Prevention of Money-laundering Act, 2002, which is dealt with separately and adversely in the exclusions.

Where the Scheme Does Not Apply

Two hard exclusions:

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

The second one rewards speed. If a notice under the Black Money Act has landed but the assessment is still running, the door is open and the Assessing Officer must take the declaration into account. Once that assessment is completed, the door closes for that year.

Should You Declare? A Working Framework

Four questions, in order.

1. Do You Actually Have a Schedule FA Gap?

Pull the last six ITRs. For each calendar year in which you held foreign shares at any point, check for Table A2 and Table A3 entries. A blank Schedule FA in a year when you held even one share is a gap. A partially filled Schedule FA that omitted one broker is also a gap.

2. Which Track Are You In?

If the money that bought the asset was taxed in India, or arose abroad while you were non-resident, you are in Track 2 at ₹1 lakh. If the money was never offered to tax, you are in Track 1 at 60%. Be honest about this classification, because Form 1 asks you to pick a type and the verification is signed by you.

3. Are You Inside the Ceiling?

Value everything on 31 March 2026, taking the higher of cost and market in each case, converting at the RBI reference rate. Add it up. Over ₹5 crore on Track 2 or over ₹1 crore on Track 1, and the scheme is closed to you entirely, at which point the conversation moves to an updated return and voluntary Black Money Act exposure management — a different article.

4. Can You Assemble the Annexure in Time?

Form 1's Annexure wants lot-level detail: dates of acquisition, cost of acquisition, issuer, exchange, and the Rule 3 value. If your broker statements are scattered across six years and two or three platforms, that reconstruction is the long pole. Start it now, not in December.

Frequently Asked Questions

The first six groups follow the CBDT's own FAQ sequence, restated. The RSU and ESPP group at the end covers questions the official FAQ does not reach.

A one-time voluntary disclosure scheme in Chapter IV, Sections 130 to 144 of the Finance Act, 2026. It lets eligible taxpayers declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, against payment of a specified tax or fee.

16 August 2026.

31 December 2026. No declaration can be filed after that date.

31 March 2026. Fair market value of every asset declared is computed as on that day.

The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems). The entire process runs online.

Either a person resident in India under Section 6 of the Income-tax Act, 1961 in the relevant previous year, or a non-resident or RNOR under Section 6(6) who was resident in India in the previous year to which the undisclosed foreign income relates, or in the previous year in which the foreign asset was acquired.

Yes, provided you were resident in India in the year the income relates to, or in the year the asset was acquired.

It is expressly covered. The definition of assessee brings in both non-resident and RNOR persons meeting the residency test above. Form 1 has a field to state residential status for the year of acquisition or earning.

Where you failed to furnish a return under Section 139; or filed a return but did not disclose the asset or income in it; or the asset or income escaped assessment within the meaning of Section 147.

Yes, any previous year, so long as the income or asset falls within the Table in Section 133 and stays inside the monetary ceilings and other conditions.

Sl. No. 1 of the Section 133 Table covers an undisclosed foreign asset or undisclosed foreign income that was never offered to tax. Sl. No. 2 covers a foreign asset that was already offered to tax, or was acquired while the assessee was a non-resident, but was not declared in the relevant schedule of the return.

An asset outside India, including a financial interest in any entity, held in your own name or in respect of which you are the beneficial owner, where you have no explanation about the source of investment or the explanation is unsatisfactory in the opinion of the Assessing Officer.

Income from a source outside India that was chargeable to tax in India but was not offered to tax.

The undisclosed foreign asset value on 31 March 2026 plus the undisclosed foreign income must not exceed ₹1 crore in aggregate.

The aggregate value of the foreign assets must not exceed ₹5 crore.

No. Crossing the ceiling makes you ineligible for the scheme, not partially eligible. The Rules illustrate this with a ₹2.5 crore mutual fund and ₹4 crore of quoted shares.

Tax at 30% of the value of the undisclosed asset or of the undisclosed foreign income, plus a penalty equal to that tax. Effectively 60% of value, as Part D row 5 of Form 1 states directly.

A foreign bank account valued at ₹60 lakh and undisclosed foreign income of ₹20 lakh. Tax is ₹18 lakh plus ₹6 lakh, so ₹24 lakh. Penalty at 100% of tax is another ₹24 lakh. Total ₹48 lakh.

A flat fee of ₹1 lakh, so long as the aggregate value of the assets does not exceed ₹5 crore.

Per declaration. Row 6 of Part D of Form 1 asks you to enter Nil or ₹1 lakh against the combined value of all Sl. No. 2 assets. Multiple holdings, multiple brokers and multiple years still attract a single fee.

Yes. Part C of Form 1 has separate summary lines for each, subject to their own ceilings, and Part D row 7 adds the two amounts together.

The higher of cost of acquisition and the price the asset would ordinarily fetch if sold in the open market on the valuation date, supported where relevant by a report from a valuer recognised by the government of the country where the asset is located. Where no such market valuation is carried out, the indexed cost of acquisition is deemed to be the fair market value.

The higher of cost of acquisition and the average of the lowest and highest price quoted on an established securities market on 31 March 2026.

Use the average of the lowest and highest price on the nearest preceding date on which the shares actually traded on that market.

The sum of all deposits made into the account from the date it was opened to 31 March 2026. Deposits funded out of a withdrawal from the same account are excluded to avoid double counting. Where the account was declared earlier under Chapter VI of the Black Money Act, 2015 and charged to tax and penalty, only deposits made since that declaration are aggregated.

Rule 3(3) reduces the fair market value of the old asset or bank account by the amount reinvested in the new asset, so the same money is not counted twice.

Indian rupees. Where the value is expressed in a currency designated by the RBI under the Foreign Exchange Management (Deposit) Regulations, 2016, it is converted at the RBI reference rate on the valuation date. Where it is not a designated currency, it is first converted into US dollars at the rate specified by the central bank of the country where the asset is located, and that dollar value is then converted at the RBI reference rate.

Not for that reason alone, provided the variance does not exceed twenty per cent of the declared fair market value. Rule 5(2) gives this protection for assets other than bank accounts.

Electronically in Form 1 to the prescribed income-tax authority, under digital signature where the return of income requires one, and otherwise through an electronic verification code.

Yes. The relevant parts of Form 1 and its Annexure are designed to be repeated as many times as required.

Yes. Form 1 requires upload of documents evidencing acquisition of the asset or earning of the income, plus a valuation report where valuation was carried out — for immovable property, jewellery, artistic work, unquoted shares and securities, or any other asset.

After electronic verification, the income-tax authority issues an order in Form 2 stating the amount payable, within one month from the end of the month in which the declaration was made.

Two months from the end of the month in which the Form 2 order is received, without interest. A further two months are allowed with simple interest at 1% for every month or part of a month of delay. Beyond four months from the end of the month of the order, the benefit of the scheme is lost for that declaration.

Immunity from further tax or penalty and from prosecution under the Black Money Act, 2015 in respect of the declared income or asset. The declared income, or the amount invested in the declared asset, is not included in total income under the Income-tax Act, 1961 or the Black Money Act, 2015. You cannot, however, claim rectification, revision, set-off or relief in respect of an assessment already made, and nothing paid under the scheme is refundable.

Type 4 in Form 1, which routes to Table Sl. No. 2. The description is an asset located outside India acquired from income already offered to tax under the Income-tax Act, 1961, not declared in the relevant schedule of the return. The amount payable is a flat ₹1 lakh, subject to the ₹5 crore ceiling.

Type 3, which also routes to Table Sl. No. 2 and the same ₹1 lakh fee. It covers an asset acquired from income accruing outside India during a period of non-residence, not declared in the relevant schedule after becoming resident.

RBI reference rate on 31 March 2026, under Rule 3(4). Rule 115 of the Income-tax Rules, with its SBI TT Buying rate on the last working day of the preceding month, governs your ordinary ITR computation and has no application here. Do not carry one workbook into the other.

A stock plan account with a broker or transfer agent is not an account with a bank. The shares are valued as quoted shares and securities under Rule 3(1)(c), and any residual cash balance falls under Rule 3(1)(g) as any other asset. Treating it as a bank account and summing every credit since inception would sweep in every vesting, dividend and sale proceed, which the Rule does not contemplate.

No. Rule 3(2) values an asset transferred before the valuation date at the higher of its cost of acquisition and the sale price. Exiting the position does not undo the disclosure failure for the years you held it.

No. Every valuation method takes the higher of cost of acquisition and market value. If you vested at $260 and the stock sits at $215, the declared figure is built on $260.

The FMV taken into account for the perquisite when the shares were allotted, in line with Section 17(2)(vi) read with Section 49(2AA). That is the figure to use as cost of acquisition in the Rule 3 comparison, not the discounted price you actually paid.

No. Quoted shares are valued from published market prices on the established securities market. Valuation reports apply to immovable property, jewellery, artistic work, unquoted shares and securities, and residuary assets.

This one is genuinely unsettled. An unexercised option is a right rather than a holding of shares, and the Section 133 Table speaks of assets located outside India. Schedule FA has historically been filled for such rights, which argues that the scheme reaches them too, and Rule 3(1)(g) on any other asset would then supply the valuation method. Take specific advice on your grant terms before deciding.

The scheme does not require it, and Section 134 provides that the declared income or investment is not included in total income under the Income-tax Act, 1961. Where an assessment for the relevant year is already pending, the Assessing Officer is required to take the declaration into account while completing it. What the scheme does not do is reopen or correct an assessment already completed.

Yes. Note 5 to Form 3 states that payments under the scheme can be made in parts, and Part B of Form 3 is structured to record a part payment made by the initial due date and the balance afterwards, with interest computed on the outstanding portion.

Section 43 of the Black Money Act, 2015 carries a flat penalty of ₹10 lakh for failing to disclose a foreign asset in the return, applied for each assessment year in which the lapse occurred. Section 42 carries the same amount where no return was furnished at all. Prosecution provisions sit alongside. Note that a proviso inserted with effect from 1 October 2024 excludes assets other than immovable property where the aggregate value does not exceed ₹20 lakh, so small holdings may already be outside the penalty. That relief does not help a typical multi-year RSU position.

The window shuts. There is no extension mechanism in the Rules, and the Black Money Act position applies in full.

Summary

• FAST-DS runs from 16 August 2026 to 31 December 2026, with everything valued as on 31 March 2026
• Track 1 (never taxed) costs 60% of value, capped at ₹1 crore aggregate
• Track 2 (taxed but never disclosed in Schedule FA) costs a flat ₹1 lakh per declaration, capped at ₹5 crore aggregate
• Almost every RSU and ESPP holder with a blank Schedule FA sits in Track 2, at Form 1 type 3 or type 4
• Both ceilings are cliffs — crossing them removes eligibility rather than capping the benefit
• Conversion is at the RBI reference rate on 31 March 2026, not the Rule 115 SBI TT rate
• Fair market value is always the higher of cost and market, so a fallen share price does not reduce the number
• Selling before the valuation date does not remove the asset from the declaration
• Payment falls due two months from the end of the month of the Form 2 order, extendable by two months at 1% per month, and the benefit lapses beyond four months
• Immunity covers the Black Money Act — it does not cover PMLA, and it does not reopen a completed assessment