How should NRIs value an overseas LLP for FAST-DS 2026?
I returned to India in 2018 after working in the USA and am now a resident Indian. While I was a non-resident, I became a partner in a Delaware LLP. I have not reported this investment in Schedule FA of my Indian income-tax returns since returning to India and now want to declare it under FAST-DS 2026. The Delaware LLP prepares its accounts as at 31 December each year, but FAST-DS 2026 requires the value of my investment as at 31 March 2026. How should I work out its value for that date?
– Name withheld on request
Under FAST-DS 2026, a taxpayer can declare foreign assets acquired using income earned outside India while being a non-resident, which were not disclosed in Schedule FA after becoming a resident of India. This is subject to the condition that the value of the asset as at 31 March 2026 does not exceed ₹5 crore.
Since you contributed capital to the US-based LLP while you were a non-resident and did not disclose your partnership interest in Schedule FA after returning to India, you would be eligible to declare the interest under the scheme, subject to the valuation limit.
Valuation method
To determine the value of your LLP interest, the FAST-DS Rules, 2026 prescribe a specific valuation procedure. The LLP's net assets must first be determined as at 31 March 2026.
Since the LLP follows a calendar-year accounting period ending on 31 December, its books would not ordinarily close on the prescribed valuation date. However, a statement of the LLP's accounts reflecting its assets and liabilities as at 31 March 2026 can be prepared for this purpose. FAST-DS 2026 does not specifically require audited financial statements for valuation.
Once the net assets as at 31 March 2026 have been determined, the rules require a two-stage allocation:
- First, an amount equal to the LLP's capital is allocated among the partners in their capital-contribution ratio.
- The remaining net assets are then allocated in the dissolution entitlement ratio or, if the agreement does not specify such a ratio, in the profit-sharing ratio.
The sum of the two amounts allocated to a partner constitutes the value of that partner's interest. Accordingly, the total amount allocated to you under these two steps represents the value of your partnership interest in the LLP for the purposes of FAST-DS 2026.
If the value of your partnership interest does not exceed ₹5 crore, you are eligible to declare it under FAST-DS 2026 by paying the prescribed fee of ₹1 lakh.
Harshal Bhuta is co-founder and country co-head – International Tax and FEMA at Ascentium India, a Singapore-headquartered professional services firm.