Schedule FA: how to disclose your foreign assets in your Indian income tax return

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 — referred to as the Black Money Act — created Schedule FA as a mandatory disclosure mechanism. The penalty for missing it is ₹10 lakh per undisclosed asset per year. Not a percentage of the asset value. A flat ₹10 lakh.

Every returning NRI with a US bank account, brokerage account, 401k, or IRA needs to get this right from the first year of Indian residency.

Who files Schedule FA and in which ITR

Applicable from: the first financial year in which you are a resident in India. This includes RNOR status — RNOR is a subset of "resident" under the Income Tax Act, and Schedule FA applies.

Which ITR form: Schedule FA appears in ITR-2 (no business income) and ITR-3 (with business/professional income). It does not appear in ITR-1.

If you are a returning NRI with RSUs, 401k, or any US account, you will file ITR-2 or ITR-3. You cannot use ITR-1.

What goes in Schedule FA

Schedule FA has multiple tables. Match your assets to the right table:

Table A1: Foreign bank accounts

All foreign bank accounts where you are the account holder or beneficial owner, including:

• US checking and savings accounts (Chase, Bank of America, Wells Fargo, etc.)
• US high-yield savings accounts (Marcus, Ally)
• RFC accounts in India technically do not go here (RFC is an Indian account)

What to report: account number, name and address of bank, peak balance during the year, closing balance on December 31.

Table A2: Foreign financial interest

Equity and debt investments held directly, including:

• US brokerage accounts (Schwab, Fidelity, IBKR) — individual stocks, ETFs, bonds
• US money market funds
• This covers both the account itself and the specific securities held

Table A3: Immovable property outside India

Any US, UK, UAE or other foreign real estate — apartment, land, commercial property. Report cost of acquisition (not current market value).

Table A4: Foreign accounts with beneficial interest

Foreign accounts where you are not the named holder but have beneficial interest — a joint account where a spouse is named, a trust account, etc.

Table A5: Capital assets outside India (other than A1–A4)

This is the catch-all table. Report here:

• US 401k accounts
• Traditional IRA / Roth IRA
• US employer stock purchase plan (ESPP) holdings
• Unlisted foreign equity (startup shares, private company equity)
• US life insurance with cash value

Table A6: Signing authority in foreign accounts

If you have signing authority over a foreign account that is not your own — a company account, a family member's account — but do not have a beneficial interest, report it here.

Table A7: Trusts with beneficial interest

If you are a beneficiary or trustee of a foreign trust.

The December 31 snapshot: exactly what it means

For financial year 2026-27 (April 1, 2026 to March 31, 2027):

• US bank accounts (Table A1): report balance as of December 31, 2026
• US brokerage (Table A2): report value of holdings as of December 31, 2026
• Retirement accounts (Table A5): report account value as of December 31, 2026
• Real estate (Table A3): report cost of acquisition — no snapshot valuation needed
• Peak balance: for bank accounts, also report the single highest balance at any point during the financial year (not just the Dec 31 snapshot)

Why this matters: if you had ₹50 lakh in your US account on December 1 and moved it to India on December 15, and the December 31 balance is ₹5 lakh, you still report: peak balance ₹50 lakh, closing balance ₹5 lakh. The peak balance disclosure catches attempts to move money before the snapshot date.

Exchange rate for Schedule FA

Use the SBI TT buying rate on the relevant snapshot date (December 31 for most assets, or the date of acquisition for real estate).

The RBI publishes reference rates. For practical purposes, the SBI TT buying rate on December 31 is the standard for ITR computations.

Document the rate you used. The department can ask for it.

FATCA and the India-US data exchange

India and the United States exchange financial account information under FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) agreements. This means:

• Your US bank and brokerage report your account information to the IRS
• The IRS shares this data with the Indian tax department
• The Indian department cross-references this against your ITR

The department has access to your US account data before you file your ITR. A mismatch between what the department knows and what you disclosed is the highest-risk non-compliance scenario.

Year-by-year filing checklist for returning NRIs

RNOR does not exempt you from Schedule FA. RNOR only exempts foreign-source income from India tax. The asset disclosure obligation applies regardless.

Common Schedule FA errors by returning NRIs

1. Not filing Schedule FA at all in Year 1

Many returning NRIs assume that because they were NR until recently and their accounts are "old," they don't need to disclose. Wrong — Schedule FA is required from the first year of residency.

2. Omitting retirement accounts

401k and IRA accounts are frequently missed because they don't generate regular statements in the same way bank accounts do. They are required disclosures under Table A5.

3. Using wrong snapshot date

Reporting March 31 balance (Indian financial year-end) instead of December 31 (the required snapshot for foreign accounts).

4. Omitting ESPP or employer stock

If you participated in a US employer's ESPP (Employee Stock Purchase Plan) and still hold shares in a US brokerage, those shares are reportable even if you've returned to India.

5. Omitting accounts you "forgot about"

An old Schwab account from 2019 that you haven't touched in years is still a foreign asset. Log in, check the balance, report it.

6. Not reporting joint accounts

A US bank account jointly held with a spouse who is still in the US is still a reportable asset for you as an Indian resident.

What to do if you missed a prior year

Scenario A: Assessment year still open (ITR deadline not passed)

File a revised ITR with the corrected Schedule FA. The revised ITR deadline is typically December 31 of the assessment year.

Scenario B: Revised ITR deadline has passed

You cannot file a revised ITR. Options:

1. Wait and see — high risk given FATCA data exchange
2. Consult a CA experienced in Black Money Act — voluntary disclosure is possible but process is involved
3. Updated return (Section 139(8A)) — allows filing an updated ITR within 2 years of the end of the relevant assessment year, with additional tax of 25–50% on underpaid tax, but no Schedule FA-specific correction mechanism

The safest path is early and accurate disclosure. The penalty is disproportionate to the effort of correct filing.

Practical preparation: what to gather before filing

For each foreign account, collect:

• Account statements for the full financial year (April–March)
• December 31 balance specifically — download a statement or screenshot as of that date
• Peak balance during the year
• Account opening date (required in some tables)
• Cost of acquisition for real estate and equity

For a US 401k or IRA:

• Year-end statement (December 31)
• Full contribution history (useful for Section 89A planning)
• Plan administrator contact details

Store these in a dedicated folder — physical or cloud — labelled by financial year. You will need them for every ITR until the accounts are closed.

Related: The returning NRI master guide · Section 89A and your 401k/IRA after returning to India · You're back in India with USD savings: building your portfolio