Foreign Assets & Income Disclosure for Residents

What is foreign asset and income disclosure?

Indian residents who are ordinarily resident must report their foreign assets and foreign income in their income-tax return — foreign bank accounts, shares and RSUs in foreign companies, foreign mutual funds, foreign property, interests in foreign entities, and signing authority over foreign accounts.

This applies even if the asset earned nothing, and even if no tax is due. The Black Money Act imposes heavy penalties for failing to report, so getting it right matters even for relatively small holdings.

The key terms

The main reporting rules:

Who must report

Individuals who are resident and ordinarily resident, and other residents such as companies, with foreign assets or income.

Schedule FA

The schedule in the income-tax return listing foreign assets — accounts, securities, property, and other interests.

Calendar-year basis

Foreign assets are reported for the calendar year ending during the financial year — for FY 2025-26, January to December 2025.

Schedule FSI

The schedule reporting foreign-source income, along with any foreign tax credit claimed.

RSUs and ESOPs

Shares of a foreign employer, including unvested awards in some cases and vested shares held with foreign brokers, are foreign assets to report.

Black Money Act

The law governing undisclosed foreign income and assets, with tax at a high rate and significant penalties.

Small-holding relief

The penalty for non-reporting doesn't apply where the aggregate value of foreign assets, other than immovable property, is ₹20 lakh or less — though reporting is still required.

Why it matters

Foreign asset reporting carries some of the highest penalties in Indian tax:

Heavy penalties

Failing to report foreign assets can attract a penalty under the Black Money Act, subject to the small-holding relief.

Undisclosed income

Undisclosed foreign income or assets can be taxed at a high rate with further penalties.

Information exchange

India receives financial account information from many countries automatically, so foreign accounts are visible to the department.

RSUs are often missed

Employees of foreign companies frequently don't realise their RSUs and brokerage accounts must be reported.

No tax doesn't mean no reporting

Assets must be reported even if they earned no income.

Calendar-year trap

Using the financial year instead of the calendar year for Schedule FA is a common error.

Wrong ITR form

Residents with foreign assets can't use the simplest return form.

Who is this for?

Returning NRIs who qualify as 'resident but not ordinarily resident' generally don't need to report foreign assets in Schedule FA during that period.

Schedule FA vs. Schedule FSI

Two different schedules:

What we'll need from you

Account statements

Statements for foreign bank and brokerage accounts for the calendar year.

RSU and ESOP records

Grant, vesting, and sale records from your employer's equity platform.

Investment records

Foreign funds, shares, and other investments.

Property documents

Purchase documents for any foreign property.

Foreign tax documents

Evidence of tax withheld on foreign income.

Exchange rates

Rates for converting values into rupees.

Fees depend on the number and complexity of foreign assets.

How we report foreign assets

Our approach:

1. 1

   Confirm residency

   We confirm whether you're resident and ordinarily resident for the year.

2. 2

   List assets

   Every foreign asset and account is listed.

3. 3

   Gather values

   Peak and closing values, and income, are compiled for the calendar year.

4. 4

   Prepare Schedule FA

   Assets are reported in the correct tables.

5. 5

   Report income

   Foreign income goes into Schedule FSI, with Form 67 for credit.

6. 6

   Review past years

   If assets weren't reported before, we advise on correcting past returns.

If past years weren't reported

Missing disclosures can often be addressed:

Revised returns

A revised return can correct recent years within the time allowed.

Updated returns

An updated return may be possible for older years, within the time limit, with additional tax where income was missed.

Small-holding relief

The penalty relief for foreign assets up to ₹20 lakh (other than immovable property) may apply.

Respond to notices

Respond promptly to any notice about foreign assets, with full records.

Keep records

Keep statements and grant records for future years.

Report every year

Report assets every year while you remain resident and ordinarily resident.

Benefits and responsibilities