Foreign Assets Guide
Schedule FA: Reporting Foreign Assets in Your ITR
If you hold foreign shares, RSUs, a US brokerage account or an overseas bank account, Schedule FA is where you disclose them — and getting it wrong carries a ₹10 lakh penalty. Here's who must file, the calendar-year quirk, and how the tables work.
Updated for AY 2026-27 (calendar year ending 31 December 2025).
Schedule FA is where you disclose foreign assets in your Indian tax return. Two things trip up almost everyone: only Resident & Ordinarily Residents file it — NRIs and RNORs don't — and it runs on the calendar year, not the financial year. Get those two right and the rest is mechanical.
Do you even need to file it?
This is the first fork, and it saves a lot of people a lot of worry. Schedule FA applies only if you are Resident & Ordinarily Resident (ROR) for the year.
- ROR — you must report every foreign asset you held, even if it earned nothing.
- RNOR — you do not file Schedule FA. This is one of the quiet benefits of the RNOR window for returning NRIs.
- Non-Resident (NRI) — you do not file Schedule FA.
So if you've just moved back to India and you're still RNOR, your foreign brokerage account and RSUs stay off Schedule FA until the year you become ROR. Not sure which you are? Check your status first — it changes everything below.
The calendar-year trap
Here is the single most misunderstood rule. Your income is taxed on the financial year (1 April to 31 March). But Schedule FA reports assets held during the calendar year (1 January to 31 December).
So for your AY 2026-27 return, Schedule FA covers assets held between 1 January and 31 December 2025 — while your income figures cover April 2025 to March 2026. These are two different windows on purpose.
The mismatch is by design, not an error. A dividend credited in February 2026 is taxed in your AY 2026-27 income, but falls outside this year's Schedule FA window (it lands in next year's). Don't try to force the two numbers to agree — keep a date-wise bridge in your working papers instead.
An asset held even one day counts
If you held a foreign asset at any point during the calendar year — even for a single day, even if you closed it in March — it must be reported. Sold your US shares in June 2025? Still reportable. Closed a foreign bank account you opened years ago? Still reportable if it was open for any part of 2025.
The tables, in plain terms
Schedule FA is a set of tables, each for a category of asset. You only fill the ones that apply to you.
| Table | What goes here | Typical example |
|---|---|---|
| A1 | Foreign bank / depository accounts | US checking, UK current, Singapore savings account |
| A2 | Foreign custodial / brokerage accounts | Your Vested, Stockal or INDmoney platform account |
| A3 | Foreign equity & debt interest | The actual US shares or RSUs held inside that account |
| A4 | Cash-value / insurance contracts | Foreign life insurance with a surrender value |
| B | Financial interest in any entity | A stake in a foreign company or partnership |
| C | Immovable property abroad | A house or land held overseas |
| D & onwards | Other assets, signing authority, trusts | Signing authority on someone else's foreign account |
Note the common pattern for platform investors: your brokerage account goes in A2, and the shares inside it go in A3. Both, not one or the other.
Converting to rupees: the exact rate
Every figure must be in Indian rupees. Use the SBI Telegraphic Transfer (TT) buying rate. For peak and closing balances, the convention is the rate as on 31 December of the calendar year you're reporting — so 31 December 2025 for the AY 2026-27 return. Keep the rate sheet you used; you'll want it if a query ever comes.
Where the income actually goes
Schedule FA is a disclosure schedule — it lists what you hold, not what you owe. The income from those assets is taxed elsewhere in the return, on the financial-year basis:
- Dividends and interest → Schedule OS (and Schedule FSI for the foreign-source breakdown).
- Capital gains on sale → Schedule CG, recomputed under Indian law in rupees — don't just copy the broker's gain statement.
- Foreign rent → Schedule HP, computed under Indian house-property rules.
- Foreign tax paid → claimed as Foreign Tax Credit via Form 67, filed before your return.
RSUs and ESOPs: the sell-to-cover catch
If you hold foreign RSUs, one detail causes most of the notices. On vesting, many employers automatically sell 30–35% of your shares to fund the perquisite tax. That's a sale you didn't initiate — but it still counts. The proceeds move through your A2 account, and the shares sold must be reflected in your gross-proceeds reporting. If your Schedule FA doesn't line up with the capital-gains and salary figures elsewhere, that mismatch is exactly what triggers scrutiny.
Why this matters more than most schedules
The penalty regime here is unusually harsh, because it sits under the Black Money Act, 2015, not ordinary income-tax law. Failing to disclose a foreign asset can attract a penalty of ₹10 lakh per year — a flat amount, not a percentage, and it applies even if no tax was due and even if the asset earned nothing. There's a limited safe harbour: non-immovable foreign assets with an aggregate value up to ₹20 lakh are excluded from that penalty, but foreign property gets no such relief.
There is also, in effect, no time limit on reassessment of undisclosed foreign assets — which is why the practical advice is to retain your broker statements, rate sheets and Form 67 acknowledgements for many years, not the usual few.
Your filing sequence
The order that keeps it clean:
- 1. Confirm you're ROR — if RNOR or NR, Schedule FA doesn't apply.
- 2. Pull every foreign statement for 1 January to 31 December 2025.
- 3. Map each asset to its table (A1 accounts, A2 brokerage, A3 shares, and so on).
- 4. Convert every figure at the SBI TT buying rate.
- 5. File Form 67 for any foreign tax credit, before the return.
- 6. Report the income in Schedule OS / CG / FSI on the financial-year basis.
- 7. File ITR-2 (or ITR-3 if you have business income) with Schedule FA complete — you cannot use ITR-1 or ITR-4.
Schedule FA is annoying rather than genuinely hard. Get the residence test, the calendar-year window, the table mapping and the conversion rate right, and the rest follows. Because the penalties are severe and the cross-border details specific, it's worth having a qualified professional review your first filing.
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Foreign Assets Guide
Frequently Asked Questions
Who must file Schedule FA, what counts as a foreign asset, the calendar-year rule, and the penalties for getting it wrong.
Schedule FA is the section of the Indian income tax return (ITR-2 and ITR-3) where you disclose foreign assets — overseas bank accounts, brokerage accounts, foreign shares, RSUs, property and more. It is a disclosure schedule: it lists what you hold, separate from where the income is taxed.
Only those who are Resident and Ordinarily Resident (ROR) for the year. If you are RNOR or a Non-Resident, you do not file Schedule FA at all. This is one reason confirming your residential status first is so important.
Not while you are RNOR. Foreign-asset disclosure begins only once you become Resident and Ordinarily Resident, which is typically two to three years after you return. Until then, your foreign brokerage account and RSUs stay off Schedule FA.
By law, Schedule FA reports assets held during the calendar year (1 January to 31 December), while your income is taxed on the financial year (1 April to 31 March). For the AY 2026-27 return, Schedule FA covers 1 January to 31 December 2025. The two windows are different by design.
No, it is expected. Schedule FA shows calendar-year holdings; your income schedules show financial-year income. A dividend credited in February 2026, for instance, is taxed this year but falls outside this year's Schedule FA window. Keep a date-wise bridge in your working papers rather than forcing them to agree.
Yes. If a foreign asset or account existed at any point during the calendar year — even for a single day, even if closed in March — it must be disclosed. Sold shares and closed accounts are still reportable for the year they existed.
In two places. The platform account itself goes in Table A2 (custodial/brokerage accounts), and the individual shares or ETFs held inside it go in Table A3 (equity and debt interest). You report both, with peak and closing values converted to rupees.
The SBI Telegraphic Transfer (TT) buying rate. For peak and closing balances the convention is the rate as on 31 December of the calendar year being reported — 31 December 2025 for the AY 2026-27 return. Keep the rate sheet you used as evidence.
Not in Schedule FA, which is disclosure only. Dividends and interest go in Schedule OS (and FSI); capital gains in Schedule CG, recomputed under Indian law; foreign rent in Schedule HP. Foreign tax paid is claimed as a credit through Form 67.
Form 67 is the statement you file to claim Foreign Tax Credit for taxes paid abroad. It must be filed on the portal before or at the time of your return — miss it, and the credit can be denied even if the income and foreign tax are correctly reported elsewhere.
When your employer automatically sells 30–35% of vesting RSUs to pay the perquisite tax, that counts as a sale even though you didn't initiate it. The proceeds move through your Table A2 account and the shares sold must be reflected in your gross-proceeds and capital-gains reporting. A mismatch here is a common trigger for a notice.
Under the Black Money Act, 2015, failing to disclose a foreign asset can attract a flat penalty of ₹10 lakh per year — regardless of the asset's value and even if no tax was due. It is not a sliding scale, and it can apply for each year the omission continues.
There is a limited safe harbour from the penalty: non-immovable foreign assets with an aggregate value up to ₹20 lakh are excluded. But the reporting expectation still applies, and foreign immovable property gets no such relief. When in doubt, disclose.
Much longer than usual. Because there is effectively no time limit on reassessment of undisclosed foreign assets, retain broker statements, your SBI TT rate sheets and Form 67 acknowledgements for many years — practitioners often suggest 16 years or more.
It gives you the framework, but foreign-asset disclosure interacts with the Black Money Act and DTAA rules, and the penalties are severe. For anything beyond a single simple account, have a qualified Chartered Accountant review your disclosures before filing.