Indian taxpayers holding previously undisclosed cryptocurrency overseas may be able to report those assets under the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), subject to eligibility, location and source-of-funds requirements.
The one-time voluntary disclosure scheme took effect on August 16, 2026, and allows qualifying taxpayers to report certain undisclosed foreign assets and income by paying prescribed taxes or fees.
Overseas Crypto Can Qualify
According to Isha Sekhri, Founder of Isha Sekhri & Associates LLP, an “undisclosed asset located outside India” broadly includes assets held directly or beneficially where their source remains unexplained or inadequately explained.
Virtual digital assets (VDAs) should be reported under ‘Any other asset ‘. Coins, tokens, stablecoins and NFTs are treated under the same residual category, whether held through an exchange or a self-custodied wallet.
However, trading profits, staking rewards and airdrops must be separately reported as undisclosed foreign income.
Location of Crypto Matters
FAST-DS applies to assets or income located outside India. Sekhri said crypto held through an Indian exchange or regulated domestic wallet provider would ordinarily fall outside the scheme.
As crypto has no natural geographical location, she said a ‘defensible working position’ is treating custodial assets held on foreign exchanges as located in the jurisdiction where that exchange is incorporated or regulated.
Tax Can Reach 60%
Two categories determine the potential payment. For crypto purchased using undisclosed income, the aggregate ceiling for qualifying assets and income is Rs. 1 crore. Tax is charged at 30% plus an equal amount, creating an effective 60% payment.
Where crypto was purchased using already-taxed income but the foreign-asset disclosure was missed, qualifying assets can total up to Rs. 5 crore, with a flat Rs. 1 lakh fee.
Valuation and Deadlines Matter
According to Sekhri, crypto should be valued as of March 31, 2026, generally using the higher of acquisition cost or open-market value.
Taxpayers must submit Form 1 online by December 31, 2026. The department issues Form 2 within one month, followed by a two-month payment window. An additional two months is available with 1% monthly interest.
What Records Should be Preserved?
Taxpayers should retain exchange statements, wallet records, KYC documents, bank and remittance trails, previous tax returns, Schedule FA disclosures and relevant residency evidence.
FAST-DS could therefore provide eligible taxpayers with a route to regularize previously unreported overseas crypto, but classification, residency, valuation and funding sources determine whether a particular holding qualifies.
Also Read: India Crypto Tax Rules Keep 30% Levy as Transaction Reporting Expands
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
