Schedule FA - Disclosure of Foreign Assets in ITR

What is Schedule FA (Foreign Assets) in ITR?

Schedule Foreign Assets (FA) is a part of the ITR form wherein you are required to report your foreign assets such as foreign shares, foreign company mutual funds, etc.)

In other words, all the foreign assets held by you, either legally, as a beneficiary, or as a beneficial owner, should be disclosed while filing the ITR-2 or ITR-3, as appropriate.

Reporting in Schedule FA (Foreign Assets) is mandatory for a taxpayer who is a resident in India and: (a) He holds any asset outside India; (b) He has signing authority in any account located outside India; or (c) He has income from any source outside India. This schedule is not required to be filed by a taxpayer who is a non-resident (NR) or Not ordinarily Resident (NOR). Schedule FA requires reporting of assets held outside India. Such reporting is required if those assets are held at any time during the relevant accounting period. Reporting is required even if the asset is held for a single day during the relevant accounting period.

You must report:

• Foreign bank, depository, or custodial accounts
• Foreign shares/ETFs (held directly or through platforms like Interactive Brokers, Vanguard, etc.)
• Foreign immovable properties
• Trusts or other foreign legal arrangements

Other capital assets or income from foreign sources

Peak balance, closing balance, and income from these assets during the calendar year (1 Jan to 31 Dec) must be disclosed in INR using SBI’s TTBR.

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Why Is It Important to File Schedule FA in ITR?

Schedule FA is important due to the following reasons -

• Disclosure of Foreign Assets - It lets taxpayers disclose any foreign assets they own, like bank accounts, stocks, properties, mutual funds, and other financial instruments. This disclosure helps the Income Tax Department maintain a proper record of the global financial holdings of the resident.
• Prevents Black Money - It helps combat black money cases like Panama paper leaks. It discourages the hiding of foreign assets and sets out a clear penalty for non-reporting of foreign assets.
• Helps Avoid Double Taxation - By revealing your foreign assets, you can ensure that the income generated from them is properly taxed. Moreover, you can also claim relief under the Double Taxation Avoidance Agreement (DTAA) with other countries, which prevents you from paying tax twice on the same income.

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Who Should Report Foreign Assets?

The reporting requirement of foreign assets in Schedule FA is a crucial aspect for residents, individuals, and HUFs (Hindu Undivided Families) who are classified as residents and ordinarily resident (R&OR). This requirement ensures transparency in international financial interests and helps maintain tax compliance. Let's break down the relevant provisions and exceptions:

The requirement to report foreign assets in ITR is applicable if you have any of the following assets -

• Foreign Assets
• Financial interest or stake in a company located abroad
• You are a signing authority in an account maintained in a foreign country.

Beneficial Ownership - Beneficial ownership refers to the situation where you derive benefits from the assets held by someone else. Beneficial owners are also required to report foreign assets in ITR. Here are the exceptions -

• Beneficiary with Included income - If you are a beneficiary of a foreign asset and the income from it is already taxed in the return of the legal owner, you might be exempt from filing your own return.
• Foreign Citizens with Specific Visas - Foreign citizens who are classified as R&OR but hold business visas, employment, or student visas might be exempt from disclosing foreign assets acquired when they were non-residents and are currently not earning any income from such assets.

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Relevant Period to Disclose Foreign Assets

Taxpayers are required to disclose any foreign assets or income pertaining to the calendar year when filing their Income Tax Return (ITR) forms for the particular assessment. This entails individuals reporting details of any foreign assets held and income earned during the period from April 1st, 2025 to March 31st 2026 in Schedule FA while submitting their ITR for the Assessment Year 2026-27. It is essential to ensure accurate and comprehensive reporting to comply with tax regulations and avoid potential penalties or legal consequences. Therefore, taxpayers should diligently gather all relevant information regarding their foreign assets and income for the specified period to facilitate smooth and compliant tax filing.

Rate of Exchange for Conversion

Currency conversion costs are typically 1% of the transaction price. It is assessed by the ATM network or credit card processing company and is often added to the foreign transaction fee that you pay.

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What Foreign Assets must be Disclosed under Schedule FA?

Disclosure of foreign assets in ITR is mandatory in the schedule FA of ITR, if you hold any of the below foreign assets.

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Key Information Required for Reporting Foreign Assets

You need to furnish the following details for each foreign asset or foreign account held while filling the schedule FA of the Income Tax Act, 1961 -

• Country name and code
• The name of the foreign entity
• Address and zip code of the foreign entity
• Account number of the foreign repository
• Status of the account and the account opening date or the date of acquisition of the asset
• Initial value of the investment
• The highest value of the investment during the accounting period.
• The closing value of the investment on the last date of the accounting period.
• The value of gross interest credited in the asset account during the accounting year.
• The amount received during the sale or redemption of an investment during the accounting period.

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How to File Schedule FA in ITR?

If you hold a foreign asset and are filing your income tax return, you need to follow the below-mentioned steps -

• Step 1. Identify the Asset Category - The first step is to identify the category of the foreign asset you hold. You have to select the relevant foreign asset and its code from the drop-down menu while filing the ITR.
• Step 2. Provide Asset Details - In the next step, you need to provide basic details of the foreign asset, like its name, address, zip code, country code, and currency code.
• Step 3. Provide Details of Investment Values - Now, you need to provide the initial value of the investment, the opening balance, highest balance during the relevant accounting period, and closing balance at the end of the accounting year in both the foreign currency and INR.
• Step 4. Report Income and Procceeds - You must also provide the details of the income or revenue earned during the accounting period, both in foreign currency and Indian rupees. It also includes the revenue or proceeds from the sale or redemption of assets during the financial year.
• Step 5. Claim DTAA Relief - Details of relief claimed under DTAA for income from foreign assets, if any.

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What is the Deadline to Report Foreign Assets in the ITR?

The deadline to report Foreign assets in your ITR for FY 2024-25 through original/ belated, or revised return has already passed. Now, if you want to report foreign assets in schedule FA of ITR, you can file ITR U oran updated return under section 139(8A) for FY 2024-25.

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Penalty for Not Declaring Foreign Assets in ITR

If you fail to report the details of your foreign assets or furnish inaccurate information, you might face severe penalties. Following are the penalties for non-disclosure or misrepresentation of foreign assets in schedule FA in ITR.

• You might have to pay a penalty of INR 10 lakhs for every year that you fail to disclose your foreign assets.
• Any non-reporting of foreign assets while filing the ITR is considered a willful evasion of tax, and you might have to face imprisonment of up to 7 years.
• Non-declaration also revokes your right to claim relief under the Double Taxation Avoidance Agreement for your foreign income.

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How to declare foreign shares In ITR?

• You must report foreign investments and stocks in Table A3 of Schedule FA in your ITR.
• Convert the value of all foreign assets into Indian Rupees before reporting.
• Dividends from foreign stocks must be reported as “Income from Other Sources” in the year you receive them.
• Dividends are taxable in the year they are earned, even if you do not bring the money to India.
• If tax was already deducted in the foreign country, you can claim that tax as a credit while filing your ITR to avoid double taxation.
• You must disclose all foreign assets held at any time during the calendar year.
• For ITR filing for AY 2026-27, you need to report assets held between April 1, 2025 to 31st March 2026.
• Since most countries follow a calendar year, even assets purchased in March 2024 must be declared in Schedule FA for FY25.
• You must file an ITR regardless of your income slab if you hold any foreign asset at any time during the financial year.

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When & How to File Revised or Belated ITR for Foreign Assets?

When you disclose foreign assets in Schedule FA, you must clearly understand the difference between the ‘previous year’ and the ‘assessment year’. You need to report all foreign assets you held and any income you earned during the previous year. These details then appear in your ITR for the corresponding assessment year.

For example, while filing your ITR for AY 2025-26 (due between July and September 2025), you will report foreign assets and income from April 1, 2024 to March 31, 2025.

Make sure you collect all documents for this previous year, such as bank statements, investment proofs, and property papers, to file your ITR smoothly.

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Self ITR Filing -

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CA-Assisted ITR Filing:

If you are confused and need help filing your ITR, you can get in touch with our tax experts who can help you file your ITR accurately and ensure you don’t miss our any reporting requirements and claim your tax refund correctly. Connect with an expert now!

In line with regulatory guidelines, individuals must report all sources of income, including details of shares and investments. Equally important is the disclosure of any foreign assets, foreign income, or overseas shareholdings in the ITR. Transparent reporting of cross-border financial interests not only ensures compliance with tax laws but also helps prevent instances of tax evasion and supports global financial accountability. Received a foreign assets non-disclosure notice? Get it resolved with expert help!

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