Short answer: If you’re Resident & Ordinarily Resident (ROR) in India, you must disclose all foreign assets held at any time during the previous calendar year (Jan–Dec) in Schedule FA of your ITR-2/ITR-3. Use SBI’s TT buying rate for currency conversion, and use Schedules FSI/TR + Form 67 to claim foreign tax credit. Penalties apply under the Black Money Act for non-disclosure.
Last updated: 15 August 2025
Why this matters
India receives overseas account and income data under CRS/FATCA. If you don’t correctly report global assets/income, you risk stiff penalties and prosecution under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015.
Who must disclose foreign assets?
- Mandatory: Individuals who are Resident in India (ROR).
- Not required: RNOR (Resident but Not Ordinarily Resident) and Non-Resident taxpayers need not fill Schedule FA.
Tip: The ITR-2 online manual explicitly says Schedule FA is not to be filled by NOR/Non-Resident; Schedules FSI (foreign source income) and TR (tax relief) are resident-only. (Income Tax Department)
Pick the right ITR form
- ITR-1/ITR-4 cannot be used if you have any foreign asset, signing authority, or foreign income.
- Use ITR-2 (no business income) or ITR-3 (with business/professional income). The ITR-1 help page specifically disqualifies anyone with foreign assets/income/signing authority. (Income Tax Department)
The ITR-2 form also asks whether a resident held foreign assets or had foreign income and prompts you to complete Schedule FA if you answer “Yes.” (Income Tax India)
Reporting period (Important nuance)
Schedule FA follows the calendar year, not India’s fiscal year.
Report assets held at any time during the calendar year ending 31 December of the year preceding the assessment year.
What exactly goes into Schedule FA?
The Income Tax Department lists A1–G tables. Here’s a quick map:
| Schedule FA Table | What to report (examples) |
|---|---|
| A1 – Foreign depository accounts | Bank/current/savings accounts abroad (peak & closing balances; gross interest) |
| A2 – Foreign custodian accounts | Brokerage/custody accounts (peak & closing; inflows like dividends/sale proceeds) |
| A3 – Foreign equity & debt interest | Direct shares/ETFs/bonds/ESOPs/RSUs held abroad (initial, peak, closing values; income; sale proceeds) |
| A4 – Cash value insurance/annuity | Foreign life/annuity contracts with cash value |
| B – Financial interest in any entity | Ownership/beneficial interests/partnerships/trust interests |
| C – Immovable property outside India | Houses/land abroad (cost; income like rent) |
| D – Any other capital assets | Capital assets not covered above (not stock-in-trade) |
| E – Other accounts (signing authority) | Accounts where you only have signing authority |
| F – Trusts outside India | Where you are trustee/settlor/beneficiary |
| G – Any other foreign-source income | Not covered above |
You must declare if you are the legal owner, beneficial owner, or beneficiary.
Currency conversion — which rate?
Use the State Bank of India’s Telegraphic Transfer (TT) buying rate:
- Peak balance/value → convert at TT buying rate on the date of the peak
- Closing balance (31 Dec) → convert at TT buying rate on 31 Dec
- Foreign-source income → convert at TT buying rate on the relevant date
This definition and method are given in the Schedule FA explanations.
Quick formulas
- Peak Balance (INR) = Peak foreign balance × SBI TT buying rate (peak date)
- Closing Balance (INR) = Balance as of 31 Dec × SBI TT buying rate (31 Dec)
Example: If your US bank peaked at $12,500 on 15-Jun (TT buy ₹83.20), Peak Balance = ₹10,40,000 (12,500×83.20).
How to fill Schedules FSI, TR and claim Foreign Tax Credit (FTC)
- Schedule FSI: Report foreign-source income (also ensure it appears under the correct income head in your ITR).
- Schedule TR: Summarises tax relief claimed against taxes paid outside India.
- Form 67: File on or before the due date u/s 139(1) to claim FTC. The help page lists Form 67 under documents for salaried individuals and notes the due date requirement. (Income Tax Department)
Step-by-step checklist (India-centric)
- Confirm residential status (ROR vs RNOR/NRI). Only ROR must fill FA.
- List assets held anytime between 1 Jan–31 Dec (bank, broker, ETFs, ESOPs/RSUs, property, insurance with cash value, trusts, signing-authority accounts).
- Collect proofs: Bank/broker statements, property papers, insurance statements, trust deeds.
- Compute peak & closing balances in INR using SBI TT buying rate as specified.
- Fill Schedules:
- FA (asset details),
- FSI (foreign income details),
- TR (tax relief summary),
- and Form 67 (FTC) before due date.
- Use ITR-2/ITR-3; avoid ITR-1/ITR-4 if you have foreign assets/income/signing authority. (Income Tax Department)
- If total income > ₹50 lakh, also disclose assets in Schedule AL (again disclose even if already in FA, as clarified by ITD).
Due dates for AY 2025-26 (FY 2024-25)
For non-audit individuals/HUFs, the ITR due date has been extended to 15 September 2025 (from 31 July 2025) by the Government/ CBDT. (Press Information Bureau)
Penalties & enforcement (Black Money Act)
- Failure to disclose foreign income/assets or inaccurate particulars can trigger ₹10 lakh penalty (per year of default). Earlier the exemption applied only when aggregate bank balances ≤ ₹5 lakh; the Finance (No. 2) Bill, 2024 raised the exemption threshold to ₹20 lakh (excluding immovable property), w.e.f. 1 Oct 2024. Prosecution provisions may also apply in serious cases. (High Court of Tripura, India Budget)
Common Indian scenarios & how to report
- US stocks/ETFs via LRS (e.g., through an Indian broker’s international platform): Report under A3 (equity/debt). Dividends/interest go in FSI, FTC via TR + Form 67.
- ESOPs/RSUs of a foreign parent: Once vested/held, treat as foreign equity (A3). Income events (perquisite at exercise; dividends; capital gains) must be reported/ taxed in respective heads and reflected in FSI/TR if tax paid abroad.
- Signing authority on a company account overseas (no ownership): Disclose under E even if no income accrued.
- Property abroad: Report cost and income (e.g., rent) in C; claim FTC as applicable via FSI/TR/Form 67.
Note: Digital assets held through foreign platforms may fall under D (other capital assets) or E (other accounts with signing/transaction authority). Classification can be fact-specific—conservative disclosure is generally prudent. (Inference based on FA tables’ scope.)
Frequent mistakes to avoid
- Using ITR-1 despite foreign assets/income (disallowed). (Income Tax Department)
- Reporting for Apr–Mar instead of Jan–Dec in Schedule FA.
- Wrong forex rate (use SBI TT buying rate per FA instructions).
- Not filing Form 67 by the due date, causing FTC denial. (Income Tax Department)
- Skipping “signing authority” accounts thinking “no ownership, no disclosure.” You must still disclose.
FAQs
1) I became Resident this year, but was NRI earlier. Do I still have to fill FA?
If you are ROR, yes. RNOR/Non-Resident do not fill FA.
2) Do I disclose assets even if there’s zero income?
Yes. Schedule FA requires details of assets held at any time in the calendar year—income is separate (FSI/TR).
3) I closed my foreign account mid-year. Should I report it?
Yes—if it existed at any time during the Jan–Dec period, it must be reported with peak/closing values (closing may be zero).
4) My global income is below the basic exemption limit. Must I still file?
Residents holding foreign assets are obligated to file a return and disclose them; choose the correct form and complete FA/FSI/TR.
5) If I forget to disclose, can I fix it?
Yes—file a revised/belated return within timelines to correct omissions. The ITD has urged timely correction to avoid Black Money Act consequences. (The Times of India)
At-a-glance: What to prepare (visual cue)
- Identity: PAN, residential status determination
- Banking: Overseas bank statements with daily/monthly balances
- Investments: Broker statements for peak/closing values; ESOP/RSU vesting/exercise reports
- Property: Purchase deed, rent statements
- Insurance/Annuity: Cash value statements
- Taxes paid abroad: Withholding statements (e.g., 1099, dividend vouchers), Form 67 documentation
Key takeaways for Indian investors
- Only RORs must disclose in Schedule FA; RNOR/NR are excluded.
- Calendar year basis (Jan–Dec) for FA; use SBI TT buying rate for conversion.
- Use ITR-2/3, not ITR-1/4, when foreign assets/income/signing authority exist. (Income Tax Department)
- For AY 2025-26, ITR due date is 15 Sep 2025 for non-audit cases. (Press Information Bureau)
- Non-disclosure risks ₹10 lakh penalty; ₹20 lakh exemption threshold (other than immovable property) applies from 1 Oct 2024. (India Budget)
(We recommend keeping a year-round folder with Jan–Dec foreign statements to make Schedule FA stress-free.)