Moved back to India but still have a US bank account, investments, RSUs, ESOPs, insurance policies or other foreign assets? You may need to pay attention to India’s new Foreign Assets of Small Taxpayers Disclosure Scheme (FADS) 2026.

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For many NRIs, moving back to India does not mean their financial life overseas immediately disappears.

You may have an old US bank account from your working years, shares from a former employer, RSUs or ESOPs, a foreign investment account, savings, insurance or another overseas asset.

The question is: What happens to these assets after you become a resident of India?

The Government has introduced FADS 2026, a time-bound disclosure scheme intended to provide eligible taxpayers an opportunity to disclose certain previously undisclosed foreign assets and foreign income by making the prescribed payment.

What is FADS 2026?

FADS stands for Foreign Assets of Small Taxpayers Disclosure Scheme, 2026.

The scheme was introduced through the Finance Act, 2026. It provides a one-time opportunity for eligible taxpayers to disclose specified:

• Undisclosed foreign assets
• Undisclosed foreign income
• Certain foreign assets acquired while the taxpayer was a non-resident but not subsequently disclosed
• Certain foreign assets acquired from income already offered to tax in India but not reported in the relevant foreign-asset schedule

The Income Tax Department has now enabled Form 1 of FADS 2026 on the e-Filing portal.

Why is FADS 2026 particularly relevant for returning NRIs?

A lot of returning Indians have financial assets that were created while they were living abroad.

For example:

You lived in the US for 10 years.

During that period, you may have:

• Maintained a US checking or savings account
• Accumulated investments
• Received RSUs or ESOPs
• Purchased shares
• Bought an insurance policy
• Built up foreign savings
• Acquired property or another overseas asset

Then you moved back to India.

Your physical move may have happened in one month, but your financial accounts and investments remained overseas.

The Government's own FAQs specifically identify returning non-residents with undisclosed foreign savings or insurance policies, former students with dormant or low-balance foreign accounts, and employees with foreign ESOPs/RSUs as examples of taxpayers who may benefit from the scheme, subject to the eligibility conditions.

Who can use FADS 2026?

Eligibility depends on the taxpayer's residency status and the year in which the relevant foreign income or asset arose/acquired.

Broadly, the scheme covers:

1. A person who was resident in India in the relevant previous year; or
2. A person who is currently non-resident or RNOR, but was resident in India in the relevant year connected with the undisclosed foreign income or acquisition of the foreign asset.

This is important for returning NRIs because your current residential status alone may not determine whether FADS applies to you.

Your historical residency and the source and timing of the asset can matter.

What foreign assets can be covered?

The FADS Form 1 allows taxpayers to report different categories of foreign assets and income.

These include:

🏦 Foreign bank accounts

For example, an old US savings or checking account.

🏠 Foreign property

Such as an overseas house or other immovable property.

💎 Jewellery and valuables

🎨 Artistic work

📈 Shares and securities

This can be particularly relevant for people who accumulated foreign investments or employer equity.

💰 Foreign income

The form also provides for disclosure of applicable foreign income and related assets.

What about RSUs and ESOPs?

This is an important area for returning employees of multinational companies.

If you received RSUs or ESOPs from a foreign employer while working overseas and those assets were not appropriately reported, your situation should be reviewed carefully.

The Government's FADS FAQ specifically mentions employees of multinational technology companies receiving foreign ESOPs or RSUs among potential users of the scheme.

However, having an RSU or foreign investment does not automatically mean that you need to file under FADS.

The facts matter — including when the asset was acquired, how it was funded, whether the income was taxable in India and whether it was previously disclosed.

What if you only have a small amount in your old US bank account?

This is one of the biggest questions returning NRIs may have.

You might think:

“There is only $2,000 left in my old US account. Surely that doesn't matter?”

Don't make that assumption.

The relevant question isn't simply how much money is sitting in the account today.

The tax treatment can depend on factors such as:

• Your residential status
• When the account or asset was created
• Source of the funds
• Whether the income was taxable in India
• Whether the asset was previously disclosed
• Whether the relevant disclosure requirements were followed

The FADS framework specifically covers certain small-value cases, subject to the prescribed conditions and monetary limits.

How much do you have to pay under FADS 2026?

The amount depends on the category into which the declaration falls.

For one category covering undisclosed foreign assets or undisclosed foreign income up to an aggregate value of ₹1 crore, the scheme provides for:

30% tax + an additional amount equal to that tax, effectively making the prescribed amount 60% of the relevant value.

A separate category covers certain foreign assets acquired while the taxpayer was non-resident, or assets acquired from income already offered to tax in India but not disclosed in the relevant schedule.

For qualifying cases up to ₹5 crore, the prescribed amount is a flat ₹1 lakh fee.

These categories have specific legal conditions, so taxpayers should not assume which category applies to them without professional review.

What is the FADS 2026 deadline?

The declaration window is:

16 August 2026 to 31 December 2026

Form 1 must be submitted within this period.

The process then involves additional steps.

According to the Income Tax Department's guidance:

Form 1 → Taxpayer submits declaration
Form 2 → Tax authority determines amount payable
Form 3 → Taxpayer provides payment intimation
Form 4 → Tax authority certifies the validity of the declaration and payment.

Does FADS mean every returning NRI needs to file?

No.

This is extremely important.

FADS is not a blanket requirement for everyone who has ever lived overseas.

Whether you need to take action depends on your individual circumstances and the specific conditions of the scheme.

For example, you may have:

• Properly disclosed your foreign assets already
• Been RNOR or non-resident for the relevant period
• Held assets that don't fall within the scheme
• Foreign income that was already appropriately taxed/disclosed
• Assets acquired in circumstances covered by a different provision

Therefore, don't file simply because you saw a reel about FADS.

First establish whether you actually have an undisclosed asset or income covered by the scheme.

What should returning NRIs do now?

If you moved back to India and still maintain financial connections overseas, this is a good time to conduct a Foreign Asset Review.

Make a list of:

☑️ US/UK/Canada/Australia bank accounts
☑️ Brokerage and investment accounts
☑️ RSUs and ESOPs
☑️ Foreign shares and securities
☑️ Overseas property
☑️ Foreign insurance policies
☑️ Dormant bank accounts
☑️ Foreign income
☑️ Any other overseas financial interests

Then collect documents showing:

• When the asset was acquired
• Source of funds
• Current/appropriate valuation
• Income generated
• Previous tax returns
• Previous foreign-asset disclosures
• Relevant residency history

A qualified NRI tax professional/CA can then determine whether FADS, regular tax compliance, or another route applies to your situation.

What documents may be required for FADS?

The Income Tax Department's Form 1 guidance says taxpayers should have details of the foreign asset/income being declared and supporting documents where applicable.

Depending on the asset, this can include:

• Bank account details
• Passport details
• Valuation reports
• Investment/share statements
• Computation of income or asset value
• Other supporting documentation

The portal also provides for electronic verification through specified methods.

A simple example for a returning NRI

Imagine Rahul worked in the US for eight years.

Before returning to India, he had:

• $8,000 in a US bank account
• Company RSUs
• A US brokerage account
• A small foreign insurance policy

After moving to India, he continued maintaining these accounts.

The first thing Rahul should not do is assume that every one of these assets must automatically be declared under FADS.

Instead, he should determine:

Was each asset already disclosed?
When was it acquired?
Where did the money come from?
What was his Indian residential status at that time?
Was the income taxable in India?
Were the required foreign-asset schedules filed?

Only after answering these questions can he determine whether FADS is relevant.

One important distinction: FADS vs regular foreign-asset disclosure

FADS should not be confused with the normal foreign-asset reporting requirements that may apply to Indian residents.

The Income Tax Department's guidance states that residents are required to disclose relevant foreign assets/accounts in Schedule FA, subject to the applicable rules; RNORs and non-residents are treated differently for this schedule.

So even if FADS doesn't apply to you, that doesn't automatically mean your foreign assets have no Indian tax reporting implications.

What returning NRIs should NOT do

❌ Don't ignore an old foreign bank account because the balance is small.

❌ Don't assume an RSU/ESOP doesn't matter because you received it while working abroad.

❌ Don't assume your current RNOR/non-resident status automatically settles the question.

❌ Don't blindly file FADS without checking eligibility.

❌ Don't wait until the last few days before the deadline to gather years of foreign financial records.

The DeshWaapsi Checklist 🇮🇳

If you've recently returned to India, ask yourself:

1. Do I still have foreign bank accounts?

2. Do I have foreign investments or brokerage accounts?

3. Did I receive RSUs/ESOPs from a foreign employer?

4. Do I have foreign insurance or property?

5. Did I earn foreign income that may have Indian tax implications?

6. Have I properly disclosed my foreign assets in my Indian tax filings where required?

7. What was my residential status during the relevant years?

If you answered YES to any of these, it may be worth getting your records reviewed by an NRI tax professional.

Final Word for Every DeshWaapsi

Moving back to India isn't just about shipping your furniture, changing schools and finding a new home.

Your financial life needs a DeshWaapsi too. 🇮🇳

If you still have financial assets abroad, take the time to understand how they fit into your Indian tax and disclosure obligations.

And if you believe you may have an old or previously undisclosed foreign asset, don't panic — but don't ignore it either.

FADS 2026 provides an opportunity for eligible taxpayers to address specified historical foreign-asset and foreign-income disclosure issues, subject to the scheme's conditions.

Deadline: 31 December 2026.