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NRI · FEMASchedule FA and foreign assets reporting: common errors
Residents holding foreign shares, ESOPs, bank accounts or property must report them in Schedule FA of their ITR – even if no income arose. Penalties under the Black Money Act are steep. Here is what to report, how, and the common errors.
Schedule FA (Foreign Assets) in ITR-2 and ITR-3 requires residents to disclose foreign assets and income. It is linked to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which carries heavy penalties.
Who must report
- Resident and ordinarily resident (ROR) individuals, HUFs, firms, companies with foreign assets.
- Not required for RNORs and non-residents.
- Required even if the foreign asset produced no income and even if the asset was funded from income taxed in India.
What to report
| Table | Asset |
|---|---|
| A1 | Foreign depository (bank) accounts |
| A2 | Foreign custodial accounts (brokerage) |
| A3 | Foreign equity and debt interest (shares, ESPP, vested RSUs) |
| A4 | Foreign cash-value insurance / annuity contracts |
| B | Financial interest in any entity |
| C | Immovable property |
| D | Any other capital asset |
| E | Accounts with signing authority |
| F | Trusts (trustee, beneficiary, settlor) |
| G | Other income from outside India |
Details: country, name and address, account number/identifier, date of acquisition, initial value, peak value during the period, closing value, gross income, and how income is offered in the return.
Period and exchange rates
- Period: calendar year ending during the FY (1 January to 31 December).
- Conversion: SBI telegraphic transfer buying rate on the relevant dates (last day of the month preceding the transaction month, as per Rule 115 practice).
Worked example
Example: Karan, an engineer in Gurugram (ROR), works for a US company's Indian subsidiary. During calendar year 2025:
| Asset | Details | Table |
|---|---|---|
| 120 RSUs vested in March 2025 (US parent shares) | Held in a US brokerage account | A2 (custodial account) and A3 (equity) |
| ESPP shares bought in June 2025 | Same brokerage | A3 |
| Dividend USD 300 | Taxed in India; US withheld 25% | A3 income; also Schedule FSI/TR with Form 67 |
| US bank account opened during a 2019 posting, balance USD 1,200 | Still open | A1 |
Karan uses ITR-2 (or ITR-3), reports each item with peak and closing values in rupees, includes dividend income, and claims credit for US tax by filing Form 67 by the date permitted.
Common errors
- Using the financial year instead of the calendar year.
- Reporting only assets sold, not those held.
- Missing small dormant bank accounts abroad.
- Not reporting peak balance.
- Thinking Schedule FA is not needed because income was already taxed through salary perquisite (RSU vesting is taxed as salary, but holding still needs disclosure).
- Filing ITR-1, which has no Schedule FA.
If you missed reporting
- File a revised return within the time allowed (up to 31 March after the year, per Budget 2026 change) or an updated return where eligible.
- Budget 2026 also announced a time-bound foreign asset disclosure window (FAST-DS 2026), as reported – check if notified and applicable.
- The ₹20 lakh threshold (non-immovable assets) protects small balances from the ₹10 lakh penalty from 1 October 2024, but disclosure is still required.
Key takeaway
If you are ROR and hold any foreign asset – even a small bank account or a few RSUs – fill Schedule FA for the calendar year, with peak and closing values. Our NRI and cross-border team prepares Schedule FA and FTC claims for employees with global stock plans.
Official references
Official sources to verify the current text, notifications and circulars:
Frequently asked questions
Who must fill Schedule FA?
Resident and ordinarily resident individuals (and other residents) who held any foreign asset, had signing authority in a foreign account, or had foreign income at any time during the relevant period. RNORs and non-residents need not fill it.
What period does Schedule FA cover?
The calendar year ending in the relevant financial year – for the return of FY 2025-26, the period 1 January 2025 to 31 December 2025.
Do I report RSUs of my US employer that have not vested?
Vested shares held are reported as foreign equity. Unvested RSUs/ESOPs are generally not assets held yet, but disclosure practices vary; many advisers report options granted in the relevant table with a note.
What is the penalty for not reporting foreign assets?
Under the Black Money Act, a penalty of ₹10 lakh can apply for failure to disclose foreign assets in the return. Since 1 October 2024, this does not apply where the aggregate value of non-immovable foreign assets is up to ₹20 lakh.
Should RNORs fill Schedule FA?
No. Schedule FA applies to residents who are ordinarily resident; RNORs and non-residents are not required to fill it.
Do I report a foreign insurance policy?
Yes, cash-value insurance or annuity contracts are reported in the relevant table.
Is crypto on a foreign exchange reported in Schedule FA?
Holdings in foreign custodial accounts or other capital assets abroad should be considered for disclosure; VDA income is separately reported in Schedule VDA.
This article is general information on the law as on 10 November 2026, written for educational purposes. It is not professional advice for your case. Section numbers under the Income-tax Act, 2025 should be confirmed with the official section mapping on the Income Tax Department website before use in filings.
Have a tax, GST or business question?
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