Rupee slump may push foreign holdings over FAST-DS 1-crore cap, raising tax bills

The Income Tax Department launched a voluntary disclosure window on August 16, allowing taxpayers to regularise foreign assets and income by paying a 60 % tax and penalty on amounts not exceeding 1 crore rupees. The scheme uses March 31, 2026 as the conversion date, and the rupee’s 14-33 % depreciation over the past three to seven years may cause many holdings to exceed the ceiling, leading to higher tax outgo. Former ICAI president Ved Jain argues that the valuation date for undisclosed assets also applies to income, while chartered accountant Ashish Karundia contends that income should be converted at the rate prevailing when it was earned.

Some taxpayers with undisclosed income above 1 crore are considering a split approach—using an updated return for the excess and FAST-DS for the remainder—to potentially save Rs 30-40 lakh. Chartered accountant Harshal Bhuta warns that any misstatement could render the FAST-DS filing void, exposing the taxpayer to penalties. The scheme also caps eligible foreign assets at 5 crore rupees, with valuation based on the higher of acquisition cost or market value, creating borderline cases that may affect eligibility.