A US account can fall into one of two very different FAST-DS 2026 categories. Avinash explains the difference, why residency status at the time matters and what to check before any declaration.
A US account can fall into one of two very different FAST-DS 2026 categories. Avinash explains the difference, why residency status at the time matters and what to check before any declaration.
Imagine a returning NRI who has worked in the United States for 15 years and has $200,000 in a Fidelity account. Someone warns this NRI that a new Indian scheme may mean a 60% payment on foreign assets that were not declared. The obvious reaction is to work out 60% of $200,000, which is $120,000. Avinash says this is only one part of the story.
FAST-DS stands for Foreign Asset Disclosure Scheme for Small Taxpayers 2026. It is a document the government issued in August 2026, and it creates a one-time window for eligible taxpayers to disclose certain overseas income and assets that have not been taxed or properly reflected in their Indian tax return. The Income Tax Department cites examples such as employees receiving ESOPs and RSUs, former students with dormant foreign bank accounts, non-residents returning with savings or insurance policies, and people who worked or were posted abroad.
FAST-DS is not just a 60% tax on foreign assets. The more useful first question is not how much tax you have to pay, but what kind of non-disclosure you have, because the scheme creates two separate categories. The figures and dates in this article are the ones Avinash gives, and the rules may change.
The first category is the one behind the headlines. It covers undisclosed foreign income or undisclosed foreign assets, where the aggregate value is up to ₹1 crore as on March 31, 2026. Two situations fall here: income from abroad that should have been taxed in India but was not declared, and a foreign asset for which the source of the investment cannot be explained. The payment is 30% tax plus an additional amount equal to 100% of that tax, which Avinash calls a penalty. Because 100% of 30% is 30%, the total comes to 60%, and that is where the 60% headlines come from.
Avinash works through a hypothetical case. If a relevant undisclosed asset is worth ₹50 lakh, then 30% of ₹50 lakh is ₹15 lakh of tax, and the penalty of 100% of that tax is another ₹15 lakh, so the total is ₹30 lakh.
The second category is a different situation. Here the income is already taxed and declared in India, the source of the funds can be explained, but the foreign asset was not declared in the relevant disclosure forms. The threshold for this category is ₹5 crore as on March 31, 2026, and the payment is a fixed amount of ₹1 lakh. The category is subject to that threshold and to other conditions, which should be checked against the scheme itself.
The table uses only the figures Avinash gives.
| Point | Category one | Category two |
|---|---|---|
| What it covers | Undisclosed foreign income or assets, such as income that should have been taxed in India but was not declared, or a foreign asset whose source of investment cannot be explained | Income already taxed and declared in India, with the source of funds explained, but the foreign asset not declared in the relevant disclosure forms |
| Threshold | Up to ₹1 crore as on March 31, 2026 | ₹5 crore as on March 31, 2026 |
| Payment | 30% tax plus a penalty equal to 100% of the tax, which is 60% in total | A fixed amount of ₹1 lakh |
Avinash follows Raj, a fictional character who worked in the US for 15 years. In the first version of his story, Raj has $150,000 in a Fidelity account, $15,000 in a Bank of America account, some corporate RSUs and an old 401(k). He returned to India a couple of years ago and later finds that some of his overseas assets were not properly disclosed or declared in his returns after he acquired resident status. Raj's first question is how much tax he has to pay, but Avinash calls that the wrong first question. For the 401(k) side of the move, see what happens to a 401(k) when you move to India.
In the second version, Raj earned the money while living and working in the US as a non-resident Indian. He paid payroll taxes in the United States, built up savings, bought shares and may have received RSUs from his employer. After he returned to India, he did not fully reflect some of these assets in his return, despite the reporting requirements. Avinash says this is a different situation from having unexplained foreign income. The asset may be perfectly legal, the source of the funds can be easily explained, and the income may already have been taxed abroad. The only problem is that the asset was not declared as a foreign asset.
Raj number one has foreign income that should have been taxed in India but was not, or an asset whose source of investment cannot be properly explained. That is potentially a 60% category, depending on the terms of the scheme and the ₹1 crore threshold. Raj number two earns money while living and working abroad, the income is already taxed and declared in India, and the funds can be explained, but the foreign asset was not declared in the relevant forms. That case falls in the ₹1 lakh category, subject to the ₹5 crore threshold and other conditions. Raj may not fall into the first category, but he might fall into the second.
Same brokerage account, but a completely different tax problem.
The channel has discussed RNOR many times, and Avinash says that is one reason people get confused. RNOR means resident but not ordinarily resident. Some people conclude that because they are an RNOR, their foreign assets do not matter in India, and Avinash calls that reasoning too simplistic. There are two separate questions to answer: was the foreign income taxed in India, and was it necessary to report a foreign asset? These are not necessarily the same question.
The scheme itself recognises that a person who is currently a non-resident or RNOR can potentially file a return as if they were a resident of India during the relevant period. That period is the one in which the foreign income arose or the foreign asset was acquired, so the status to check is not the status today. Avinash says to recreate the status at each of those points, and to check what was declared in the Indian return for each year. This is why the NRI, RNOR and ROR timeline becomes extremely important.
For the general rules on RNOR, read what RNOR status means in India, including its benefits, duration and rules. To see how NRI, RNOR and ROR status can change, read how to tell which status applies to you and when it changes. The site also has an RNOR status calculator.
Avinash warns against assuming that the amount in an old account is the figure for reporting. His example is an old bank account with $8,000 left in it. The scheme specifies how valuation applies depending on the type of asset. If the account has been held for 10 to 15 years, do not take today's balance as the value for the report. Instead, you may have to reconstruct the history and apply the method the scheme gives for that kind of asset. For background on how foreign assets are treated for returning NRIs, see returning NRIs and foreign assets under RBI and FEMA rules.
This matters especially for old payroll accounts, dormant accounts, brokerage accounts, ESOPs or RSUs, insurance policies and other legacy foreign assets. Avinash's second example is $100,000 in a Charles Schwab account. Do not assume the reporting amount will be $100,000, because different assets have different valuation rules. You therefore need to distinguish between your account balance and the value that is relevant for the report.
Avinash says he would not try to calculate the liability with a simple online search or calculator, and that you need to work with an accountant who specialises in cross-border matters.
Avinash's advice for anyone with foreign assets is to avoid starting on the form. Instead, start by answering five questions, which can completely change the FAST-DS analysis.
The fourth and fifth questions test whether the income was already taxed and whether the asset was reported. Avinash uses RSUs to illustrate the fourth question, since the benefit may already be part of an Indian salary and taxed. The income question and the disclosure question are not necessarily the same question.
There are three things Avinash would not do. He describes the urge to fix an old brokerage account the same day.
That is why restoring the history comes before any declaration.
Avinash says that, if he were a returning NRI with a complicated history of foreign finances, he would start this week with a simple spreadsheet of four columns:
Do not calculate taxes yet and do not panic. The aim is to restore your history. Once the file is ready, take it to a qualified tax professional and ask a better question: which FAST-DS category, if any, applies to me? Avinash says that is a much better question than whether FAST-DS is a 60% tax.
Two points from earlier come back here. The source of the money matters, and so does the size of the account. For returning NRIs, the residency history may carry more weight than they expect. For the general filing side of a return to India, see how returning NRIs can file their Indian taxes correctly before a notice arrives.
FAST-DS is a one-time opportunity for eligible taxpayers to settle their foreign asset and income issues, with immunity from tax penalties and prosecution under the Black Money Act for declared assets. The scheme has been in effect since August 16, 2026, and the current window is open until December 31, 2026.
Avinash's advice is that anyone who has worked or studied abroad, or owned foreign stocks, should not ignore the scheme. Equally, the 60% headline should not cause panic. The first step is to work out which problem applies.
Avinash closes by inviting viewers with old foreign accounts to write FAST-DS in the comments, and says a follow-up with real scenarios may follow if there is enough interest.
The figures and dates above are the ones Avinash gives, and the rules may change. This is general information, not personal tax, legal or investment advice. Before making any declaration, confirm the position with a qualified tax professional, such as an accountant who specialises in cross-border matters.
Watch the full video on the Desi Return YouTube channel.
For help with the tax side of a return to India, see cross-border tax planning or India tax filing for NRIs and returnees.
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0:00 Imagine this. You worked in US for 15 years and you have $200,000 sitting in Fidelity. You earned that money while working in US. You paid your US taxes. You eventually moved back to India. And then somebody tells you India has a new scheme. If you didn't report your foreign assets, you might have to pay 60%. So you look at your $200,000 which is in your account and you think 60% of $200,000 is going to be $120,000 that you have to pay to Indian government. So before you panic No, not necessarily. And this is exactly why I want to make this video because FAST DS has been described as 60% foreign asset tax.
0:50 That's only one part of the story. There are actually two very different situations and depending on which one applies to you, the difference could be 60% versus 1 lakh. So let's break down using a few real world NRI situations. Let's dive in. FAST DS stands for Foreign Assets of [music] Small Tax Payers Disclosure Scheme 2026. This is something the government has released in August 2026. The government has created a one-time
1:23 Window for eligible taxpayers to disclose certain foreign income and foreign assets that were either not taxed or not properly reported in the Indian tax return. The Income Tax Department specifically gives some examples like employees receiving ESOPs, RSUs, former students with dormant foreign bank accounts, returning non-residents with foreign savings or insurance policies, and people who have worked abroad or were deputed overseas. So if you ever lived abroad, worked abroad, or studied abroad, this is worth understanding. But, here is the first important point. Fast DS is not simply 60% tax on foreign assets. Let's understand why.
2:10 Let's take a fiction example of Raj. Raj worked in US for 15 years. He has $150,000 in Fidelity [clears throat] account, $15,000 in Bank of America account, some company RSUs, and owned foreign case. He returned to India >> [music] >> couple of years ago. Now, Raj discovers that some of his foreign assets were not properly disclosed or reported in his Indian tax returns after becoming a resident ordinary resident. Raj hears about this Fast DS, and his first question is, "How
2:43 Much tax do I have to pay?" But, that's actually the wrong first question. The first question is, "What kind of non-disclosure [clears throat] do I have?" Because Fast DS essentially creates two buckets. Bucket one, this is the category that creates the scary headline. Suppose you have foreign income that should have been taxed in India, but was not offered to tax. Or, you have a foreign asset for which you can't explain the source of the investment. The scheme covers the undisclosed foreign income or assets
3:22 Where the aggregate value is up to 1 crore as of March 31st, 2026. And what do you pay? 30% tax plus an additional amount equal to 100% of the tax. So, effectively, it's 30% plus 30% and 60%. That's where the 60% headlines that you hear about. So, for example, if you have a relevant undisclosed asset value, let's say 50 lakhs. So, 30% of the 50 lakhs is going to be 15 lakhs, That is the tax, and the penalty, which is going to be 100% of the tax, which is another 15 lakhs. So, the total amount is going to be 30 lakhs, and that's a huge number. But, here is the critical question. Does Raj actually fall under bucket one?
4:08 Maybe not, but he might fall under bucket number two. Let's talk about it. Now, let's change Raj's story slightly. Raj earned this money while living and working in the US as a non-resident Indian. He paid [music] tax on his salary in the US. He accumulated savings. He bought shares. Maybe he received RSUs from his employer. Then, he returned to India. But, after being subject to relevant foreign asset reporting requirement, he didn't
4:37 Properly report some of these assets in his Indian return. That's a very different situation from having unexplained foreign income. The asset may be perfectly legitimate. The source is perfectly explainable. The income may already have been taxed abroad. The problem is simply that it was not reported on the foreign asset disclosure. And the FAST DS has a separate category for this, and this is the bucket number two. While the taxpayer was a non-resident, or if the income already offered to tax in India, but were not reported in the relevant Indian tax filing returns, and the threshold in that case is 5 crores as of March 31st, 2026.
5:25 And the FAST DS payment is going to be 1 lakh flat fee. Now, you can see why the headline FAST DS 60% tax can be extremely misleading. So, now ask yourself, are you Raj number one, or are you Raj number two? Raj number one, you have a foreign income that should have been taxed in India, but wasn't. Or do you have a foreign asset where the source of investment
5:51 Itself can't be properly explained. That's potentially a 60% bucket subject to scheme's conditions and a 1 crore threshold. If you are large number two, you earn the money while living and working abroad, the income is already taxed and offered to tax in India, the money is explainable, but the foreign asset was not reported in the relevant disclosure schedules. That's a 1 lakh bucket subject to 5 crore threshold and other conditions. Same foreign brokerage account, completely different tax problem. That
6:26 Is the key idea that I want you to take away. Now, let's bring in something that's extremely important for this written audience, R N O R, resident but are not ordinary resident. You might have heard us talk about R N O R multiple times on this channel, and here is why people get confused. They think, I'm an N O R, therefore, my foreign assets doesn't matter in India. That's too simplistic. You need to answer two questions. The first, was the foreign income taxable in India? And the second question, was the foreign asset required to be reported? Those are not necessarily the same question. And past DS itself recognizes that a person who is currently a non-resident or R N O R may potentially make a declaration as if they were resident in India during the relevant period when the foreign income arose or the foreign assets was acquired. So, don't look at what is my status today. You need to reconstruct what was my status when the
7:28 Foreign income arose. What was my status when the foreign asset was acquired?
7:33 >> What did I report each year's Indian tax return? That's why R N O R, R O R timeline becomes extremely important. Now, let's talk about old bank account trap. Let's say this is very relevant for former international students or people who have lived abroad. Let's assume you have an old bank account and you have $8,000 left in that account and you might think why should I care? Because don't automatically assume the number you see in the account today is the value that matters for fast D.S. The scheme has specification in terms of how the valuations would apply depending on the type of assets. So, if you have this account for 10 to 15 years, don't take today's balance and assume that is your fast D.S. value.
8:24 You might need to reconstruct the history and apply the prescribed valuation method. This is particularly important for people who have old salary accounts, dormant accounts, brokerage accounts, ESOPs or RSUs, insurance policies or even legacy foreign assets. So, the same thing applies even for the
8:43 Foreign investment accounts. Suppose you have 100,000 in your Charles Schwab account. Don't immediately assume that your fast D.S. value is going to be 100,000. Different assets has different valuation rules. That is the [music] key thing that I wanted to mention. The scheme provides or prescribes a method depending on the nature of the asset and the relevant valuation date. So, you need to distinguish what is my account balance from what is the value that's relevant for a foreign asset under fast D.S. That's why I wouldn't
9:17 Try to calculate fast D.S. liability using a simple Google search or an online calculator. You need to work with a cross-border C.A. who has the expertise. If you ever had a foreign assets, here is what I would do. Don't start filling out fast D.S. form. Start answering these five questions. First, when did I acquire the asset? Number two, where did the money come from? Savings, salary, >> RSUs, stock sale, inheritance, and so on. And question number three, what was my Indian residential status at the time? Non-resident, RNOR, or ROR? The fourth question, was the income already offered to tax? For example, with RSUs, was the relevant prerequisite income already included in your Indian salary and taxed? And question number five, did I actually report my foreign assets in the Indian tax return when I was required to? These five questions can completely
10:17 Change the FAST DS analysis. And here are the things that I wouldn't do. So, if you're watching this video and thinking, "Oh my god, I have an old Fidelity account and I need to fix it
10:28 Today." Wait. There are three things I wouldn't do at all. First, don't panic and sell your foreign investments. FAST DS is a disclosure scheme. Selling an asset doesn't automatically solve the underlying compliance history. Number two, don't transfer everything to India just because you heard about FAST DS. Moving money and resolving historical tax disclosures are two different things. And number three, don't make declaration before reconstructing your
10:57 Facts. The Income Tax Department says declaring a false particulars or material representation can be treated as a void. So, this is not a pay one lakh and forget about it. You need to get the facts right. So, what should you do? If I were a returning NRI with a complicated foreign financial history, here is what I would do this week. [music] I would create a simple Excel sheet, four columns. First column will be foreign assets, whether it is Fidelity, Charles Schwab, Bank of America, RSUs, and so on. Second column, when did you acquire it? Third column, source of money. And fourth column, has it been reported in India? That's it. Don't calculate tax yet. Don't panic. Just reconstruct your history.
11:44 Then take the file to a qualified cross-border tax professional and ask much better question. Which FAST DS category, if any, applies to me? >> That's a much better question than is FAST DS a 60% tax on foreign assets? So, let's wrap it up. FAST DS creates a one-time opportunity for eligible taxpayers to clean up their historical foreign assets and income issues with
12:12 Immunity from tax, penalty, and prosecution under the Black Money Act for the declared assets. And this scheme is now live from August 16, 2026 2026 with the current window running towards up December 31st, 2026. So, if you ever lived abroad, or worked abroad, studied, or had foreign shares, don't ignore this. But also, don't panic because you heard 60%. First, figure out which problem you actually have. Because [music] in FAST DS, there are two categories. The source of the money matters, and then the size of the account. And for returning NRIs, you residential status history can matter more than you think. So, if you have a old US, UK, Singapore, or any foreign account, and you might be wondering, does FAST DS apply to me?
13:06 Put FAST DS in the comments, and if there is enough interest, we'll do a follow-up video with actual NRI scenarios. US brokerage accounts, RSUs, 401Ks, old banks, R&R, and we will walk through each bucket and how it would be potentially valued, and what is the implications. Because that's where this is getting really interesting. And finally, if you are ever planning to return to India, consider subscribing because we share valuable information so that you can plan your return in a more compliant way. Thank you. Until next time. >> [bell]
Your RNOR window, retirement accounts, and move date planned as one sequence.
