FBAR and FATCA: which Indian accounts H-1B and green card holders must disclose

If you have been in the US on an H-1B visa for a year or more, you are almost certainly a US tax resident — and that means every Indian bank account, fixed deposit, PPF account, and mutual fund holding comes with US reporting obligations that most people have never heard of.

This guide covers FBAR (FinCEN 114) and FATCA (Form 8938) — what they are, which Indian accounts trigger them, the thresholds, the penalties, and what to actually do.

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The two disclosure regimes: FBAR and FATCA

These are separate requirements that often overlap:

	FBAR (FinCEN 114)	FATCA (Form 8938)
Filed with	FinCEN (Financial Crimes Enforcement Network)	IRS (attached to Form 1040)
Who must file	US persons with foreign financial accounts	US taxpayers with specified foreign financial assets
Threshold (US resident)	$10,000 combined across all accounts at any point	$50,000 at year-end OR $75,000 at any point (single); double for married filing jointly
Threshold (living abroad)	Same $10,000	$200,000 at year-end OR $300,000 at any point (single)
Deadline	April 15 (automatic extension to October 15)	Same as federal tax return (April 15, extension to October 15)
Penalty for non-filing	Up to $10,000 per year (non-willful); up to $100,000 or 50% of account value per year (willful)	$10,000 per year for failure to file; up to $50,000 for continued failure

The key point: many Indian account-holders must file both, even though the forms cover much of the same ground. Filing FBAR does not exempt you from Form 8938, and vice versa.

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Who must file: H-1B and green card holders

H-1B visa holders: You become a US tax resident once you pass the substantial presence test — generally 183 days in the US in a calendar year, weighted across 3 years. For most H-1B holders arriving before July 1, this test is met in their first calendar year. Once you are a US tax resident, FBAR and FATCA obligations begin.

Green card holders: You are a US tax resident from the moment your green card is approved, regardless of physical presence. All FBAR and FATCA obligations apply.

F-1 students (exempt individuals): F-1 visa holders in their first 5 years in the US are not subject to the substantial presence test. FBAR/FATCA do not apply unless they separately become US tax residents through another mechanism.

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Which Indian accounts are reportable

NRE (Non-Resident External) accounts

FBAR: Yes. NRE savings accounts, NRE fixed deposits, and NRE recurring deposits are all foreign financial accounts subject to FBAR reporting.

FATCA (Form 8938): Yes. NRE accounts are specified foreign financial assets.

Income tax treatment: NRE interest is tax-exempt in India. It is fully taxable in the US. Every rupee of NRE account interest must be reported as ordinary income on your US federal return, converted at the IRS average annual exchange rate. This is the most common surprise for Indian H-1B holders — the NRE account they keep for its India tax exemption creates a US tax liability they never anticipated.

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NRO (Non-Resident Ordinary) accounts

FBAR: Yes. NRO savings accounts and FDs are reportable.

FATCA (Form 8938): Yes.

Income tax treatment: NRO interest is already taxable in India (TDS at 30% for NRIs). It is also taxable in the US. The India-US Double Tax Avoidance Agreement (DTAA) allows you to take a foreign tax credit (Form 1116) for the Indian TDS against your US tax liability. This prevents double taxation, but you must claim it actively.

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PPF (Public Provident Fund)

FBAR: Yes. PPF is a foreign financial account for FBAR purposes. The current value of your PPF balance is included in the combined $10,000 threshold.

FATCA (Form 8938): Yes. PPF is a specified foreign financial asset.

Income tax treatment: PPF interest is exempt in India under EEE (Exempt-Exempt-Exempt) status. The US does not recognize this exemption. PPF interest accrues annually and is taxable in the US each year it accrues, even though it is not paid out until withdrawal.

PFIC status: PPF is not a PFIC. It is generally treated as a foreign grantor trust or foreign government plan for US tax purposes. Consult a US-India cross-border tax specialist for the correct characterization.

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EPF (Employees' Provident Fund)

FBAR: Yes. EPF accounts are reportable.

FATCA (Form 8938): Yes.

Income tax treatment: Complex. EPF contributions by the employer may be taxable in the US as compensation when made. EPF interest accruing in the US tax year is taxable in the US. Withdrawals are taxable to the extent they exceed previously taxed contributions. This is one of the most technically complex areas of India-US cross-border tax — get specialist advice before withdrawing.

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NPS (National Pension System)

FBAR: Yes. NPS accounts are reportable.

FATCA (Form 8938): Yes.

PFIC status: Likely yes for the equity and debt sub-funds within NPS (the underlying investments). Each sub-fund may qualify as a PFIC independently. This makes NPS the most complex Indian retirement account for US tax purposes — combining FBAR/FATCA reporting obligations with possible PFIC issues and Form 8621 requirements.

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Indian mutual funds and ETFs

FBAR: Yes. Mutual fund accounts held in your name are foreign financial accounts.

FATCA (Form 8938): Yes. The account value is a specified foreign financial asset.

PFIC: Yes. This is separate from and in addition to the FBAR/FATCA obligations. Indian mutual funds are PFICs subject to the excess distribution regime under IRC Section 1291 and Form 8621 filing. See the PFIC guide for the full treatment.

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Indian stocks held in demat account

FBAR: Yes. Your demat account (with CDSL or NSDL, held through a depository participant) is a foreign financial account if its balance exceeds the $10,000 threshold.

FATCA (Form 8938): Yes. Individual Indian stocks are specified foreign financial assets.

PFIC: No (for individual Indian operating companies). Direct equity in Indian companies is generally not a PFIC because operating companies typically earn active income. The PFIC trap is for pooled investment vehicles, not direct stock holdings.

Income tax treatment: Dividends from Indian stocks are taxable in the US. Capital gains on Indian stocks are also taxable in the US as ordinary income or capital gains depending on holding period.

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Indian savings accounts

FBAR: Yes. Ordinary Indian savings accounts (SBI, HDFC, ICICI, etc.) are foreign financial accounts.

FATCA (Form 8938): Yes.

Income tax treatment: Interest from Indian savings accounts is taxable in the US. The Indian Section 80TTA deduction (₹10,000 exemption on savings account interest) is not recognized in the US.

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Fixed deposits (FDs) — resident FDs

FBAR: Yes. Resident FDs held in India are reportable.

FATCA (Form 8938): Yes.

Income tax treatment: FD interest is taxable in the US. TDS deducted in India (typically 10% for resident Indians) can be claimed as a foreign tax credit on Form 1116.

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Summary table: Indian accounts and US reporting

Account	FBAR	Form 8938	PFIC (Form 8621)	US income tax on returns
NRE savings / FD	Yes	Yes	No	Yes — interest fully taxable
NRO savings / FD	Yes	Yes	No	Yes — credit for Indian TDS
PPF	Yes	Yes	No	Yes — interest taxable annually
EPF	Yes	Yes	No	Complex — consult specialist
NPS	Yes	Yes	Likely yes	Complex
Indian mutual funds	Yes	Yes	Yes	Yes — PFIC regime
Indian ETFs (NSE/BSE)	Yes	Yes	Yes	Yes — PFIC regime
ULIPs	Yes	Yes	Likely yes	Complex
Indian demat (stocks)	Yes	Yes	No	Yes — dividends + gains
Indian savings account	Yes	Yes	No	Yes — interest
Resident FD	Yes	Yes	No	Yes — credit for TDS

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The $10,000 FBAR threshold: how it works

The threshold is combined maximum balance across all foreign accounts during the year — not year-end balance.

Example: Your NRE savings account peaked at ₹3,00,000 (≈$3,600) in March. Your NRO FD matured at ₹5,00,000 (≈$6,000) in August. Your PPF balance is ₹8,00,000 (≈$9,600). At no single point did any one account exceed $10,000. But combined, the peak value across all accounts may have exceeded $10,000 — triggering FBAR.

The maximum balance rule: You report the highest balance each account reached during the year, converted to USD. You add up these maximums. If the total exceeds $10,000, FBAR is required for all accounts — even those that individually never exceeded $10,000.

Exchange rate: Use the US Treasury's year-end exchange rate (published by Treasury FMS) to convert INR balances to USD for FBAR. For Form 8938, use the IRS-specified average or year-end rate.

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Form 8938 (FATCA) threshold reminder

For US residents (living in the US):

• Single: $50,000 at year-end OR $75,000 at any point in the year
• Married filing jointly: $100,000 at year-end OR $150,000 at any point

These thresholds are higher than FBAR but the penalty for missing Form 8938 is also severe. If your Indian holdings are modest, you may owe FBAR but not Form 8938. If your holdings are substantial (senior engineer with large EPF, PPF, and mutual fund holdings), both are likely required.

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Penalties for non-filing

FBAR penalties

• Non-willful failure: Up to $10,000 per violation per year. In practice, the IRS has imposed per-account, per-year penalties.
• Willful failure: The greater of $100,000 or 50% of the account balance at the time of the violation, per year.
• Criminal penalties: Possible for willful violations — up to 5 years imprisonment.

The IRS has run active FBAR enforcement programs targeting Indian-Americans with NRE accounts and other Indian financial holdings. This is not a theoretical risk.

Form 8938 penalties

• $10,000 for failure to file
• Up to $50,000 for continued failure after IRS notice
• 40% accuracy-related penalty on any understatement attributable to an undisclosed asset

Statute of limitations

The statute of limitations on your federal tax return does not begin running until all required international information returns (including FBAR, Form 8938, Form 8621 for PFICs) are filed. If you never filed FBAR for 2019 and 2020, those years remain open to IRS audit indefinitely.

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What to do if you have never filed

Streamlined filing compliance procedures

The IRS offers amnesty programs for taxpayers who non-willfully failed to file international information returns:

Streamlined Domestic Offshore Procedures (SDOP) — for US residents:

• File amended returns for the last 3 years and FBARs for the last 6 years
• Pay all back tax and interest
• Pay a 5% miscellaneous offshore penalty (based on the highest aggregate value of unreported foreign assets)
• No FBAR penalties on top of this

Streamlined Foreign Offshore Procedures (SFOP) — if you lived outside the US for at least one of the past 3 years:

• Same amended returns and FBARs
• No miscellaneous offshore penalty (0%)

These programs are available only to non-willful non-filers. If the IRS has already contacted you, these programs are no longer available.

Action: If you have years of unfiled FBAR and Form 8938, consult a US tax attorney or CPA specialising in international compliance before filing anything. The streamlined procedures have specific requirements and the wrong approach can foreclose your amnesty options.

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The practical filing checklist

If you are an H-1B or green card holder with Indian accounts:

• Determine your US tax residency start date (first year you passed substantial presence test)
• Compile a list of every Indian account you held during each year since residency: NRE, NRO, PPF, EPF, demat, FDs, mutual funds, NPS
• For each account, find the peak balance during each calendar year
• Convert peak balances to USD using the Treasury year-end exchange rate
• If combined total exceeds $10,000 in any year: file FinCEN 114 (FBAR) for that year
• If your total foreign assets exceed $50,000 (year-end) or $75,000 (at any point): file Form 8938 with your tax return
• For each NRE account: report interest as income on Schedule B
• For each NRO account: report interest as income on Schedule B, claim foreign tax credit on Form 1116 for Indian TDS withheld
• For PPF: report annually accruing interest as income even if not withdrawn
• For Indian mutual funds: file Form 8621 for each fund — see PFIC guide
• If you have unfiled years: consult a specialist about streamlined procedures before filing

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Related reading

• PFIC rules for H-1B Indians: why your Indian mutual funds are a US tax trap
• NRE and NRO accounts on H-1B: the complete guide
• 401(k) and IRA when you return to India
• RSU tax for Indian employees at US tech companies
• H-1B to green card: how your US stock tax changes