A S BANKA ADVISORS

If you have decided to use the Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS) 2026, the hard part is not the form. It is the number you put on each asset. The declaration in Form 1 is short. The valuation file that has to stand behind it is not, and that is where most founders and returning NRIs will spend their time between now and 31 December 2026.

We covered the scheme itself, who is eligible and why the window matters, in our earlier note on the FAST-DS 2026 disclosure window. This piece is about the next question you will ask once you decide to come forward: how do I actually value a foreign bank account, an offshore holding company stake, or an overseas flat for the declaration? The answer sits in Rule 3 of the FAST-DS Rules, 2026, and it is more specific than most people expect.

One valuation date, many valuation methods

Start with the two anchors set by the CBDT. The scheme runs on Chapter IV, Sections 130 to 144 of the Finance Act, 2026, read with the FAST-DS Rules notified by Notification 114/2026 (GSR 732(E)) dated 14 August 2026. The last date to file Form 1 is 31 December 2026, and every asset is valued as on a single fixed date, 31 March 2026.

What trips people up is that there is no single formula. Rule 3 lays down a different method for each class of asset. The general rule is that fair market value is the higher of the cost of acquisition and the open-market price on 31 March 2026, ideally supported by a report from a valuer recognised by the government of the country where the asset sits. If you do not commission that valuation, the indexed cost of acquisition is deemed to be the fair market value. That single sentence hides a real planning lever, which we come back to below.

The foreign bank account rule is the one to get exactly right

A foreign bank account is the one asset that does not use fair market value at all. Its value is the sum of all deposits made into the account from the day it was opened up to 31 March 2026. The closing balance is irrelevant. A dormant account that has cycled crores through it over fifteen years can carry a large declared value even if it holds almost nothing today.

Two exclusions soften this. Deposits made out of the proceeds of an earlier withdrawal from the same account are left out, so genuine internal recycling is not double counted. And if the account was already declared under Chapter VI of the Black Money Act, 2015, only deposits made since that declaration are counted. The CBDT’s own worked example runs a mix of deposits and withdrawals from 2010 to 2024 down to a deposit-sum of USD 4,900, then converts it to rupees as on 31 March 2026. The lesson for you is practical: pull the full statement from the opening date, not just recent years, and build a re-deposit reconciliation before you touch Form 1.

Shares, property, bullion and LLP stakes

For the rest of a typical cross-border portfolio, the methods run as follows:

• Quoted shares and securities: the higher of cost, or the average of the lowest and highest quoted price on 31 March 2026 (or the last trading day before it, if there was no trade that day).
• Unquoted equity shares: the higher of cost, or a prescribed net-asset formula built on the book value of specified assets, the fair market value of bullion, jewellery, shares, securities and immovable property, less liabilities excluding paid-up capital and reserves, scaled by the paid-up value of the shares. If you do not run the formula, indexed cost applies.
• Immovable property abroad, bullion, jewellery, art and non-equity securities: the higher of cost, or open-market price on the valuation date supported by a recognised valuer’s report, failing which indexed cost applies.
• Partnership, AOP or LLP interests: the net assets of the entity on the valuation date, allocated first by capital contribution and then by the agreed profit-sharing ratio.

There is also a sensible anti-double-counting rule. Where the sale proceeds of one asset, or a withdrawal from a bank account, funded the purchase of another, the value of the old asset is reduced by the amount reinvested, so the same money is not taxed twice across two line items.

Getting the currency conversion right

Everything is reported in rupees. For a currency designated by the RBI under the Foreign Exchange Management (Deposit) Regulations, 2016, you convert at the RBI reference rate on 31 March 2026. For any other currency, you first convert to US dollars at the rate specified by that country’s central bank, then convert the dollar figure to rupees at the RBI reference rate on the valuation date. Note the date carefully: it is the valuation-date rate, not the acquisition-date rate and not a year-end book rate. Record the exact rate you used for each asset in your file.

The indexed-cost lever and the 20% safe harbour

Two features of Rule 3 deserve a moment of strategy rather than mere compliance.

First, the indexed-cost fallback is not just a default for the lazy. For a long-held, appreciated asset, the indexed cost of acquisition (which carries the same meaning as Section 48 of the Income-tax Act, 1961) is often lower than a fresh open-market valuation, and it saves you the fee and timeline of a foreign valuer. For every appreciated asset, model both figures before you decide which to declare.

Second, there is a genuine cushion. Rule 5(2) provides that for every asset except a bank account, a variance of up to 20% of your declared fair market value will not, by itself, make the declaration void for misrepresentation, suppression of facts or furnishing false particulars. That protection is real, but it only holds if your valuation was honest and documented. Bank accounts get no such cushion, which is exactly why the deposit-sum arithmetic has to be exact.

What it costs, and why the clock matters

The price of coming forward depends on which basket you fall in. Where the undisclosed asset and income together do not exceed Rs 1 crore, you pay 30% of the value plus an equal amount, so roughly 60% of the declared value; the CBDT illustration of a Rs 60 lakh account plus Rs 20 lakh of income works out to Rs 48 lakh payable. Where the assets were already offered to tax or acquired while you were a non-resident, and do not exceed Rs 5 crore, a flat fee of Rs 1 lakh applies. Above Rs 5 crore, the scheme is simply not available.

After Form 1, the department issues a payment order in Form 2, you pay within two months, and there is an outer limit of four months with simple interest at 1% a month before the benefit lapses. Miss the 31 December 2026 filing date, though, and none of that machinery is available to you.

The reason to start now is not the form-filling. It is the valuation and evidence work, which for anyone with foreign shares, property or a long-running bank account will take weeks, not days. If you are also reconciling what already appears in your AIS under Schedule FA, that work compounds.

Download the full carousel PDF for a slide-by-slide summary of the Rule 3 valuation methods.

The valuation choices under FAST-DS 2026 are asset-specific and, for founders and NRIs with holding-company stakes or offshore ESOPs, genuinely consequential. Need help building a defensible valuation file before you file? Book a quick call: https://calendly.com/asbanka-info/30min. CA Adityavikram Banka, Founder, A S Banka Advisors Private Limited.