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Foreign Assets & Schedule FA, Explained Simply

Who must file, what actually counts as a "foreign asset," and a worked example — a foreign bank account and vested RSUs from an old employer — showing exactly where each one goes.

AY 2026-27 Income-tax Act, 1961 · Section 139(1) Black Money Act, 2015

On This Page

1. Who Has to File Schedule FA 2. What Counts as a Foreign Asset 3. The Calendar-Year Trap 4. Worked Example — Bank Account + RSUs 5. Penalty & the ₹20 Lakh Safe Harbour 6. Common Mistakes

1. Who Has to File Schedule FA

Schedule FA applies to individuals and HUFs who are Resident and Ordinarily Resident (ROR) in India for the relevant year. If you're Resident but Not Ordinarily Resident (RNOR) — which commonly applies for a year or two after returning to India from abroad — or Non-Resident, Schedule FA does not apply to you for that year.

If Schedule FA applies, filing an ITR is mandatory regardless of your income level — the fourth proviso to Section 139(1) requires a return to be filed by any resident who holds (as owner or beneficial owner) or has signing authority over any foreign asset, even if their income is below the basic exemption limit. Schedule FA itself is only available in ITR-2 or ITR-3 — it does not exist in ITR-1 (Sahaj) or ITR-4 (Sugam), so holding a foreign asset rules out those simpler forms entirely.

2. What Counts as a Foreign Asset

The definition is broader than most people expect — "foreign asset" isn't limited to money sitting in an overseas bank account. Schedule FA is organised into separate tables for different asset types:

Schedule FA TableCovers
Table A1Foreign depository (bank) accounts
Table A2Foreign custodial accounts (e.g. a brokerage or equity-plan account)
Table A3Foreign equity and debt interest — shares, ESOPs, vested RSUs
Table A4Foreign cash-value insurance or annuity contracts
Table BFinancial interest in any foreign entity (not through a custodial account)
Table CForeign immovable property
Table DAny account where you hold signing authority, even if it isn't yours
Table ETrusts where you are a settlor, trustee, or beneficiary
Table FAny other income derived from a source outside India
The part that surprises most people: disclosure is required even if the asset earned zero income during the year, and even if you closed or fully sold it before the year ended — as long as you held it at some point during the reporting window.

3. The Calendar-Year Trap

This is the single most common error. India's financial year runs April to March — but Schedule FA runs on the calendar year, 1 January to 31 December, matching how most other countries report. For your ITR filed for AY 2026-27 (covering FY 2025-26, i.e. April 2025 to March 2026 for your income), Schedule FA asks about foreign assets held between 1 January 2025 and 31 December 2025 — a different, overlapping window entirely.

In practice, this means you can't just pull your Indian financial-year records — you need your foreign bank and brokerage statements sliced by calendar year to fill this schedule correctly.

4. Worked Example — A Foreign Bank Account and Vested RSUs

Say you worked abroad for a few years, moved back to India, and are now a Resident and Ordinarily Resident filing your first "settled back" ITR. You still have a US bank account you never closed, and some vested shares from your old employer sitting in a Fidelity or Schwab equity-plan account.

What goes where

Based on holdings during 1 Jan – 31 Dec 2025

Table A1 — the US bank account itself: account number, bank name and address, opening date, peak balance during the year, and closing balance as of 31 December, converted to INR.
Table A2 — the Fidelity/Schwab equity-plan account is a foreign custodial account in its own right: declared separately, with its own peak and closing balance.
Table A3 — each vested RSU lot you held during the year, one row per vest lot: company name and address, acquisition date = the vest date (not the original grant date), initial value at fair market value on the vest date, and peak/closing value for the year — all converted to INR using the SBI TT buying rate as prescribed under Rule 115.
Elsewhere in the return — dividends from the shares go under Schedule OS (Income from Other Sources); gains from any shares you sold during the financial year go under Schedule CG (Capital Gains); if US tax was withheld and you want credit in India, that's Form 67, filed separately.
On unvested RSUs — an honest note: whether unvested RSUs need to appear in Schedule FA (as a "beneficial interest" not yet realised) is a point where practitioners genuinely differ, and CBDT hasn't issued a definitive public clarification settling it either way. The more conservative position is to disclose unvested awards; the more common practical position is that no reportable asset exists until vesting, since you have no enforceable right to the shares until the vesting condition is met. This is exactly the kind of judgment call worth discussing with your CA against your specific award agreement, rather than assuming either answer.

5. Penalty & the ₹20 Lakh Safe Harbour

Non-disclosure of a foreign asset can attract a penalty of up to ₹10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 — separate from, and in addition to, any Income-tax Act consequences.

There is a carve-out: if your aggregate value of non-immovable foreign assets (bank accounts, shares, custodial accounts — not property) does not exceed ₹20 lakh, the Black Money Act penalty for missing that disclosure doesn't apply. Two things worth being precise about: this is a penalty safe harbour, not an exemption from the disclosure requirement itself — the asset should still be reported; and it does not extend to foreign immovable property, which has no equivalent threshold.

6. Common Mistakes

  • Using ITR-1 or ITR-4 because income looks simple (salary + interest) — these forms don't have Schedule FA at all, regardless of income complexity.
  • Using the financial year instead of the calendar year — the single most frequent error, covered in Section 3 above.
  • Skipping dormant or zero-balance accounts — an account you forgot about, or one that earned nothing, still needs to be reported if you held it during the window.
  • Reporting only the custodial account or only the shares — RSU holders typically need both Table A2 (the account) and Table A3 (the shares), not one or the other.
  • Using the grant date instead of the vest date as the acquisition date for RSU shares in Table A3.
  • Forgetting Schedule AL — if your total income exceeds ₹1 crore, the same foreign assets also need to appear in Schedule AL (Assets and Liabilities), in addition to Schedule FA.
Note: This page is for general information only and does not constitute professional advice on your specific holdings. Foreign asset reporting depends on the exact nature of each asset, your residential status, and your award/account terms. Consult a qualified Chartered Accountant before filing. For specific queries, use the contact form.