By For thousands of Indian tech professionals, a dormant brokerage account is a financial hazard waiting to trigger. You vested RSUs years ago, the company deducted tax at source, and you assumed the transaction closed.
It wasn’t. With the Automatic Information Exchange (AEOI) pipelines now fully active, the Income Tax Department sees the foreign assets you omitted from Schedule FA. The 2026 Budget introduces the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS), a targeted mechanism to regularize these holdings.
This protocol allows you to settle the error for a fixed fee rather than facing prosecution or losing 60% of your portfolio under the Black Money Act.
The accidental tax evader. How to fix your forgotten RSUs.
Thousands of tech workers forgot to declare foreign stocks. A new 2026 budget scheme offers a way out for a flat fee.
Working for a global tech giant has perks. You get a good salary. You get health insurance. And often, you get RSUs (Restricted Stock Units). For many Indian employees, these stocks are a confusing bonus. You vest them, taxes get deducted at source, and you forget about them.
Years later, you check the account. The stock price jumped. The rupee fell. That small bonus is now worth ₹50 Lakhs. Then the panic sets in. You realize you never declared these assets in Schedule FA of your Income Tax Return.
Under the old rules, this was a disaster waiting to happen. The Black Money Act (BMA) treated this simple mistake like money laundering. You faced a 30% tax plus a 90% penalty.
That changed with the 2026 Budget. The government introduced the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS). It distinguishes between actual tax evasion and simple reporting errors.
First Check: Are you actually exempt?
Before you file for amnesty, check your residential status. Many Indians who worked abroad (e.g., in Seattle or London) and returned recently might be “Resident but Not Ordinarily Resident” (RNOR).
The Exemption Rule
If you qualify as RNOR, you are NOT required to fill Schedule FA for foreign assets acquired when you were a Non-Resident.
Non-Resident in 9 of last 10 years?
Stay in India < 729 days in last 7 years?
If you meet either condition, you are RNOR. You do not need the FAST-DS scheme. You need to file a revised return correcting your residential status code.
The Two Categories. Which one are you?
The FAST-DS 2026 splits defaulters into two groups. Understanding where you fit is the difference between paying ₹30 Lakhs and paying ₹1 Lakh.
The “Correction” Route
You qualify if:
- Your foreign asset (RSU) came from a “disclosed source” (like salary).
- Tax was deducted (TDS) when the RSUs vested.
- You simply forgot to report it in the ITR Schedule FA.
How They Found You: The CRS Pipeline
Many taxpayers believe that because their broker (e.g., Global Brokerage Inc.) is American, the Indian Income Tax Department cannot see the data. This is false. The Common Reporting Standard (CRS) and FATCA agreements ensure automatic data flow.
The Data Flow
Records your PAN/Tax ID during account setup.
Aggregates data from brokers about non-resident accounts.
Receives the “bulk dump” of financial data annually.
Project Insight matches the foreign data to your blank Schedule FA.
The “High Value” Trigger
Starting FY 2024-25, the government lowered the threshold for “High Risk” foreign asset alerts.
Your 50L portfolio is now a priority case.
Not responding to the initial notice typically escalates the case to the Black Money Act division, removing the option for the FAST-DS amnesty.
The Financial Impact. Visualized.
Let’s look at the numbers for an RSU portfolio worth ₹50 Lakhs. The chart below compares the cost of doing nothing (and getting caught), declaring under the old rules, and using the new FAST-DS Category B.
The Valuation Trap: Google vs. SBI
One of the most common errors—even during amnesty—is incorrect valuation. Taxpayers often check the USD price on Google Finance and multiply it by the current exchange rate. This will get your application rejected.
Rule 1: The Reporting Date
For Schedule FA (Calendar Year reporting), you must report the value as of December 31st of the reporting period, not March 31st.
Rule 2: The Exchange Rate
You cannot use the RBI Reference rate or the rate shown in your brokerage app. You must use the SBI Telegraphic Transfer (TT) Buying Rate for the specific date.
Example: The 10 Rupee Gap
The Second Sword: FEMA Compliance
Resolving your Tax issue does not automatically resolve your Regulatory issue. The Foreign Exchange Management Act (FEMA) is separate from the Income Tax Act.
The 180-Day Rule
Many investors sell their RSUs and keep the USD in the foreign brokerage account to reinvest later. This is a violation.
According to FEMA regulations, if you sell a foreign asset, the realized foreign currency must be repatriated to India within 180 days of the sale.
Penalty: Up to 300% of the amount involved + Daily fine.
The Hidden Danger: The “DRIP” Trap
Most RSU holders assume they have one asset: “Company Stock.” This is legally incorrect. If your account had Dividend Reinvestment (DRIP) enabled, you do not have one asset. You might have fifty.
How it happens
You own 100 shares. The company declares a dividend. Instead of cash, your broker automatically buys 0.4 shares.
Result: You now have a NEW asset acquired on a NEW date with a NEW cost basis.
Why it matters: When filing FAST-DS, you cannot just list “100.4 Shares.” You must declare the original vest as one line item, and the 0.4 share as a separate line item (Table A2 or A3). Missing these small fractional shares causes a mismatch with the CRS data.
The “Tax Credit” Illusion (DTAA)
One of the most dangerous myths circulating in office cafeterias is: “I already paid tax in the US when the RSU vested, so I don’t need to do anything in India.” This is a fundamental misunderstanding of the Double Taxation Avoidance Agreement (DTAA).
Myth vs. Reality
- MYTH: “Tax paid in US means no filing in India.”
- REALITY: Tax payment and Asset Reporting are separate. Even if tax liability is zero, reporting liability remains.
- MYTH: “DTAA covers 100% of the tax.”
- REALITY: If US Tax was 22% and India Tax is 30%, you owe the 8% difference to the Indian government.
The FTC Form 67 Requirement
To actually claim the credit for taxes paid in the US, you must have filed Form 67 before filing your ITR.
Did you file Form 67 in 2014? Likely not. This means legally, the Income Tax Department can deny your foreign tax credit claim, increasing your past liability. FAST-DS Category B bypasses this mess by charging a flat fee instead of recalculating past tax credits.
Common Scenarios: Who are you?
Not every RSU holder is in the same boat. Identify your persona to choose the right path.
The “Lost Access” Holder
Profile
Left Company A in 2016. Cannot log in to the broker account. No emails saved.
Solution
Do not guess the values. Contact the Global Helpline of the broker. Provide your SSN (usually generated by the employer) or PAN. They are legally required to retain records for 7+ years.
The “ESPP” Investor
Profile
Used salary to buy shares at a 15% discount (ESPP). Never sold them.
Solution
Since you bought these with “tax-paid salary,” this is a Category B (Low Penalty) case. The source of funds is clean. You just need to prove the salary deduction via payslips.
The “Zero Balance” Account
Profile
Sold everything in 2018. The brokerage account has $0.05 left.
Solution
DANGER. Schedule FA requires reporting accounts even if the balance is zero. If the account was open for even one day in the financial year, report it to avoid the ₹10L flat penalty.
The Filing Matrix: Table A2 vs A3
When you finally fill the amnesty form (Form 72-DS), you will encounter the same tables as the ITR. Misreporting here can render your amnesty application “Defective.”
| Asset Type | Correct Table | Common Mistake |
|---|---|---|
| RSU / ESPP Shares | Table A3 | Reporting in Table A2 (Custodial Accounts) |
| Brokerage Cash Balance | Table A2 | Reporting in Table A3 or not reporting at all |
| Dividends Received | Table A3 (Col 9) | Reporting as ‘Other Income’ only without Schedule FA link |
Your Roadmap to Compliance
You do not need to liquidate your assets to pay a massive fine. Follow this precise workflow to regularize your status.
Find the Proof
Log in to the Income Tax portal. Download Form 26AS for AY 2015-16. Verify the TDS entry from your employer. This proves the source is “white.”
Get Vesting Data
Access your broker account. Download the “Release Confirmation.” Look for “Shares Withheld for Tax.”
File & Pay
When the window opens (likely April 1), file under Category B. Pay the ₹1 Lakh fee. Keep the challan safe.
The 2026 Amnesty Window
FAST-DS scheme proposed in Finance Bill 2026.
Form 72-DS becomes available on the e-Filing portal.
File by here to avoid last-minute portal crashes common in Q4.
Scheme closes. Any undeclared assets found after this trigger full BMA prosecution.
The Visa Question
“Will admitting this affect my H1-B or Green Card application?”
Generally, civil tax penalties in home countries do not affect US immigration unless they involve “crimes involving moral turpitude” (CIMT) or money laundering. Opting for the FAST-DS Category B is a voluntary compliance measure for a civil reporting error, not an admission of criminal tax evasion. However, always disclose this if a visa form specifically asks about “tax controversies” in any jurisdiction.
Templates & Resources
Gathering old documents is difficult. Use these templates to request data from your previous employer or tax officer.
Draft: Request for Old Form 16
Dear Payroll Team,
I am a former employee (Emp ID: [ID]) who exited in [Year]. I am currently regularizing my tax filings under the FAST-DS 2026 scheme.
I require my Form 16 (Part A and B) for the Financial Year 2014-15 to substantiate that tax was deducted on my RSU perquisites.
Please assist in retrieving this archived record.
Regards,
[Your Name]
