NRI and overseas · Residence and returns
Who must report foreign assets in Schedule FA, and what is the penalty for not doing so?
Short answer
A resident and ordinarily resident individual must report every foreign asset and foreign income source in Schedule FA, even with no income from it: bank accounts, shares, ESOPs and RSUs of a foreign employer, property, insurance and signing authority. Not reporting can attract a ₹10 lakh penalty under the Black Money Act, except where movable foreign assets total ₹20 lakh or less. The FAST-DS 2026 scheme lets small taxpayers regularise until 31 December 2026.
Who must report
Every individual who is resident and ordinarily resident in the tax year and holds, or has a beneficial interest in, any asset outside India, or signing authority over a foreign account, at any time during the relevant period. Non-residents and RNORs do not fill Schedule FA.
Filing is compulsory even if your income is below the exemption limit and even if the asset earned nothing. Use ITR-2 or ITR-3; ITR-1 cannot be used.
What to report
- Foreign bank accounts, including closed ones, and the peak balance.
- Shares and securities, including ESOPs and RSUs of a foreign parent of your employer, even if unvested.
- Immovable property abroad.
- Cash-value insurance and annuity contracts.
- Interests in foreign entities and trusts; accounts with signing authority.
The period
Schedule FA follows the calendar year that ends in the tax year. For tax year 2025-26, it is 1 January to 31 December 2025.
Penalty
Failure to report a foreign asset, or giving inaccurate details, can attract a penalty of ₹10 lakh under the Black Money Act. Since 1 October 2024, the penalty does not apply where the aggregate value of the foreign assets, other than immovable property, is ₹20 lakh or less.
Undisclosed foreign income or assets are taxed at 30%, with a further penalty, and can lead to prosecution.
Correcting an omission
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If the time to file a revised return has not expired, revise it and add Schedule FA.
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FAST-DS 2026: the Foreign Assets of Small Taxpayers Disclosure Scheme is open from 16 August to 31 December 2026. It allows:
- assets bought from income already taxed, or while non-resident, but not reported, with a value up to ₹5 crore, to be regularised on payment of a fee of ₹1 lakh; and
- undisclosed foreign income or assets up to ₹1 crore to be declared on payment of tax and an equal additional amount.
A valid declaration gives immunity from penalty and prosecution under the Black Money Act. Check the scheme's conditions before filing.
Legal basis
- Section 139(1), Income-tax Act, 1961, now section 263, Income-tax Act, 2025 (Schedule FA in the return)
- Sections 42 and 43, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
- Foreign Assets of Small Taxpayers Disclosure Scheme, 2026
Official sources
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