At a glance
- The Income Tax Department is messaging taxpayers whose foreign assets it can see but whose ITR does not show them.
- Most people receiving it reported their salary correctly but left Schedule FA blank.
- You have until 31 December 2026 to revise this year's return and to use the FAST-DS scheme for earlier years.
- If your foreign assets are worth ₹20 lakh or less, the fix is usually simple and inexpensive.
If you got an email or SMS from the Income Tax Department about "overseas financial interests", do not panic and do not ignore it. You have until 31 December 2026 to set things right, and for most people the fix is straightforward.
The message reads like this:
"Our records indicate that you may have overseas financial interests (such as bank accounts, shares, or immovable property etc.) acquired in earlier years, that are required to be reported in Income Tax Return. Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), has been notified offering time-bound opportunity to the taxpayers to regularise foreign assets/income not reported in Income-tax Return. Declarations under FAST-DS are open till 31.12.2026."
This is not a demand notice and not a scrutiny case. It is a nudge. But it tells you the department already holds data on your foreign holdings, which is why acting on it matters.
Many people receiving this message have filed their ITR every year and reported their salary correctly. What they missed was Schedule FA, the foreign assets schedule. It is mandatory even if you never sold a share or earned a rupee abroad.
Who is getting this message
Almost every case we have handled this season falls into one of these groups:
- Employees of MNCs with RSUs or ESOPs. Shares vest into stock plan accounts with Morgan Stanley, E*TRADE, Schwab, Fidelity or EquatePlus. Even if the shares were sold the same week, the account and the shares must be reported.
- Investors using US stock apps. Platforms like Vested and INDmoney hold your shares with a foreign broker. That is a foreign asset.
- Returned NRIs. A bank account, pension, insurance policy or flat left behind abroad must be reported once you become resident again.
- Former students abroad. An old bank account from your study years counts, even with a small balance.
If any of these describes you, check your returns now, even if you have not received the message yet.
Why the department knows
India receives financial account data from over 100 countries under the Common Reporting Standard (CRS), and from the US under FATCA. Foreign banks and brokers report account holders, balances and income every year.
That data now shows in your AIS (Annual Information Statement) on the e-filing portal, under foreign assets information. When it does not match your ITR, the system flags you.
The rule most people miss is this: a resident and ordinarily resident individual must report every foreign asset held at any time during the year in Schedule FA. That includes shares, bank and custodial accounts, property and insurance. It applies even when the value is small, nothing was sold and no income was earned.
Watch the period: Schedule FA follows the calendar year (January to December), not the April–March financial year. Income such as dividends and capital gains still follows the financial year.
Mistakes we found while fixing these returns
| Mistake | What goes wrong | The fix |
|---|---|---|
| Filing ITR-1 | ITR-1 has no Schedule FA, so foreign assets cannot be disclosed at all | File ITR-2 (or ITR-3 if you have business income) |
| RSU perquisite shown, Schedule FA left blank | Salary is taxed correctly, but the shares and broker account are never disclosed | Report the shares (Table A3) and the custodial account (Table A2) |
| Ignoring "sell-to-cover" sales | The plan sells some shares automatically to pay tax. This is still a sale | Show it in Schedule CG. The gain or loss is usually small |
| Claiming the full foreign tax as credit | Germany deducts about 26% and the US 25% on dividends, but the treaty rate may be only 10% or 15% | Claim credit only up to the DTAA rate and reclaim the excess from the foreign tax office |
| Filing Form 67 after the ITR | The foreign tax credit can be denied | File Form 67 first, then the ITR |
| Wrong exchange rate or period | Values do not match broker data | Use SBI TT buying rates. Calendar year for Schedule FA, financial year for income |
Your options
The right route depends on the year, and on whether the money behind the asset was already taxed in India.
| Situation | Route | Cost | Deadline |
|---|---|---|---|
| Current year (AY 2026-27) missed Schedule FA or foreign income | Revised or belated ITR-2 | Tax on any missed income, plus interest | 31 Dec 2026 |
| Earlier year with foreign income not offered (dividends, sale gains) | Updated return (ITR-U) | Tax + interest + additional tax of 25% to 70% of it, rising with delay | Up to 48 months from the end of that AY |
| Asset bought from income already taxed in India (e.g. RSUs taxed in salary) or while you were non-resident. Value up to ₹5 crore | FAST-DS Category 2 | Flat fee of ₹1 lakh | 31 Dec 2026 |
| Income or asset never taxed in India. Value up to ₹1 crore | FAST-DS Category 1 | 30% tax + an equal additional amount (about 60% in total) | 31 Dec 2026 |
FAST-DS gives immunity from further tax, penalty and prosecution under the Black Money Act, 2015 for what you declare.
Good news for small holdings: since 1 October 2024, the ₹10 lakh Black Money Act penalty for not reporting foreign assets does not apply when your total foreign assets, other than immovable property, are worth ₹20 lakh or less. Many RSU holders and US-stock investors fall below this limit. For them, correcting the current return and offering any missed income may be enough, and the ₹1 lakh FAST-DS fee may not be worth paying. This is a judgement call for each case, so get it reviewed before deciding.
What to do now
- Check your AIS. Log in to the e-filing portal and open the foreign assets information in AIS. Note every account and holding shown.
- Collect your foreign statements. Broker or stock-plan statements, vesting and sale confirmations, dividend advices and foreign bank statements for each calendar year.
- Get your Form 16 and Form 12BA. These show the RSU or ESOP perquisite already taxed in salary, which becomes your cost for capital gains.
- List every year you held the asset. Compare each year's filed ITR with what you held. Note which years missed Schedule FA, and which also missed income.
- Fix the current year first. Revise or file AY 2026-27 in ITR-2 with Schedule FA, foreign income, Schedule FSI/TR and Form 67 before 31 December 2026.
- Decide on earlier years. Choose between ITR-U, FAST-DS Category 1 or 2, or relying on the ₹20 lakh relief, based on the value and on whether the income was taxed.
- Set a yearly reminder. As long as you hold any foreign asset, Schedule FA must be filled every year.
How efiletax can help
Our CA team has already fixed several of these cases this season for MNC employees holding RSUs and for US-stock investors. In each case we:
- read your broker and payroll statements and convert every figure at the correct SBI rate
- fill Schedule FA, Schedule CG, Schedule FSI/TR and Form 67 correctly
- check the DTAA rate so you claim only the credit that will hold up
- review earlier years and advise whether ITR-U, FAST-DS or no action is the right call
Got the message? Act before 31 December 2026.
Send us your AIS screenshot and broker statement on WhatsApp. We will tell you exactly what needs to be done.
WhatsApp efiletax: +91 96961 60160