Foreign asset disclosure: I-T dept reaches out to taxpayers with UAE properties as December 31 deadline looms

The Centre is pushing to make the most out of overseas tax collection, NDTV Profit reported citing sources in the Finance Ministry. The income-tax department has nudged select taxpayers who bought commercial or residential real estate in the United Arab Emirates (UAE) and may have not yet disclosed it, the report added.

The department reaching out to real estate investors comes as it gains more access to overseas financial information, as per the report.

The one-time voluntary disclosure window under the government's Foreign Assets of Small Taxpayers-Disclosure Scheme, 2026 (FAST-DS) ends on 31 December, this year.

The window was aimed at allowing eligible to disclose specified foreign assets or income without threat of penalties and prosecution under the Black Money Act, subject to the conditions.

• Under the scheme, disclosures are allowed for two categories with different payment rules.
• Under the first category, for eligible undisclosed foreign assets or foreign income that was not offered to tax, the aggregate value of the asset and income covered by the declaration must not exceed ₹1 crore.

• The taxpayer must pay tax at 30% of the asset's fair market value or the undisclosed foreign income, along with an additional amount equal to the tax. This takes the effective payment to 60% of the declared value or income.
• The second category covers eligible foreign assets worth up to ₹5 crore that were acquired using income already offered to tax in India, or income earned when the taxpayer was a non-resident, but were omitted from the relevant schedule of the tax return. Taxpayers covered by this category can make a declaration by paying a fixed fee of ₹1 lakh.

• The sources told the publication that some 1,100 taxpayers have voluntarily filed applications under FAST-DS.
• The department plans to share additional information on foreign assets with taxpayers wherever possible, they added.

• The official I-T e-filing portal provides information on overseas assets received under the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) for 2022-2024, it said.

Those taxpayers who purchased foreign properties and failed to or missed filing their returns should do so under the compliance window before the deadline.

To do so, you may need to check your reporting status before the disclosure window closes.

Taxpayers who make a valid disclosure under FAST-DS have to pay the prescribed tax or fee on the amount determined by the Income-tax Authority. For this payment, the Income-tax Department has prescribed a separate challan—ITNS 289.

Taxpayers can generate the challan either after logging into the e-Filing portal or through the pre-login route. You pay tax through ITNS 289 as follows:

• Log in to the e-Filing portal.
• Go to e-File and then move to e-Pay Tax.
• Select Income Tax Act, 1961 and continue.
• Click New Payment.
• Select Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 [Challan No. ITNS 289].
• The portal will automatically populate AY 2026-27 and the applicable minor head based on the PAN category.
• Enter the payment details according to the Form 2 order.
• Review the amount and other details carefully and continue to the payment page.
• Select the available payment method and click Pay Now to complete the transaction.
• After successful payment, download the challan receipt and retain it for your records. The payment will also be available under Payment History on the e-Pay Tax page.
• The process does not end with payment. Taxpayer must electronically submit Form 3 (Intimation of Payment) along with proof of payment.
• The authority will verify the payment and issue Form 4, certifying the payment made under FAST-DS.

• The income-tax department is reportedly reaching out to some taxpayers who own UAE property and may not have disclosed it.
• The FAST-DS voluntary disclosure window is scheduled to close on December 31.
• Any relief from penalties or prosecution depends on eligibility and the scheme’s conditions; taxpayers should check their reporting status and consult a qualified tax professional.

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