(INDIA) — Indian taxpayers with foreign shares, bank accounts, brokerage accounts or other overseas assets must review their holdings for Schedule FA before filing returns for Assessment Year 2026-27.

The disclosure can apply to employees holding foreign-company shares or restricted stock units, former students who retained bank accounts abroad, returning NRIs, Indian residents using overseas brokerage platforms and people with signing authority over foreign accounts.

What Schedule FA Covers

Schedule FA is a disclosure schedule. An asset can remain reportable even if it produced no income, was sold during the year or had a nil balance on December 31, 2025.

For Assessment Year 2026-27, Schedule FA covers assets and accounts held from January 1, 2025, to December 31, 2025. That period differs from the financial year used for most Indian income calculations, which runs from April 1, 2025, to March 31, 2026.

A share bought in February 2026 ordinarily falls outside the calendar-year 2025 Schedule FA period. Income from that investment during February or March 2026 can still form part of income for financial year 2025-26 and may need to be reported in the relevant income schedules.

An overseas investment sold in February 2025 remains within the Schedule FA reporting period because it was held during calendar year 2025. Its closing value on December 31 may be nil, but the asset does not disappear from the disclosure requirement.

Who Must Disclose

Schedule FA generally applies to a taxpayer who is resident and ordinarily resident in India and who owns an asset outside India, has a beneficial interest in a foreign asset, holds a financial interest in a foreign entity, has signing authority over an overseas account or earns income from a source outside India.

Non-residents and resident but not ordinarily resident individuals do not have to complete Schedule FA. Residential status must be determined under Indian income tax law; citizenship, passport status, an overseas visa or a taxpayer’s view of India as a permanent home does not decide the issue.

A returning NRI should establish residential status before deciding whether overseas assets require disclosure. An account or investment opened while the person lived abroad can still fall within Schedule FA after the person becomes resident and ordinarily resident.

Choosing the Right ITR Form

Taxpayers who must disclose foreign assets should select an income tax return form that contains Schedule FA. ITR-1 and ITR-4 do not contain the schedule and should not be used for returns requiring foreign-asset disclosure.

Individuals without business or professional income will commonly use ITR-2. Those with business or professional income will generally use ITR-3, subject to the other eligibility conditions for the return forms.

Using the wrong form can leave foreign holdings undisclosed even when dividends, interest or other income from those holdings appears elsewhere in the return.

Table A1 – Foreign Depository Accounts

Table A1 covers foreign depository accounts, including overseas bank and deposit accounts. The disclosure can require the financial institution’s details, account number, opening date, peak balance, closing balance and gross interest credited during calendar year 2025.

A dormant account should not automatically be excluded. An account held during the reporting period requires review even when it earned little or no interest.

Table A2 – Brokerage and Custody Accounts

Foreign brokerage and investment custody accounts generally fall under Table A2. Taxpayers may need to report the account’s peak balance, closing balance and gross amounts paid or credited, identifying credits such as interest, dividends, sale proceeds, redemption proceeds or other income.

Reporting only the year-end balance of a US brokerage account may therefore be insufficient. The account itself belongs under Table A2, while the individual securities held through it may require separate disclosure under Table A3.

Table A3 – Foreign Equity and Debt Interests

Table A3 covers foreign equity and debt interests, including shares, exchange-traded funds and bonds. The form seeks information such as the foreign entity’s name and location, acquisition date, initial investment value, peak value, closing value, total gross amount paid or credited and gross proceeds from sale or redemption.

Employees holding shares of an overseas parent company through employee stock ownership plans, restricted stock units or employee stock purchase plans should not assume that payroll reporting completes their personal Schedule FA obligation. Investments acquired in separate transactions should retain transaction-level records, rather than being combined in a way that creates an incorrect acquisition date, initial value or peak value.

Other Tables – B Through G

Foreign cash-value insurance policies and annuity contracts may be reported in Table A4. The disclosure can include the cash or surrender value and gross amounts paid or credited under the contract during the calendar year.

Tables B through G cover wider foreign interests. They address financial interests in entities outside India, immovable property outside India, other foreign capital assets, overseas accounts with signing authority, foreign trusts in which the taxpayer is a trustee, settlor or beneficiary, and other income from a foreign source.

Practical Reporting Examples

A resident and ordinarily resident taxpayer who used a US brokerage account during 2025 may have to report the account under Table A2 and the securities within it under Table A3. The same account could contain shares held throughout the year, a dividend from one company, units of a US-listed ETF and shares sold during July 2025.

Shares sold before December 31 should not be omitted if they were held during calendar year 2025. The closing value may be nil, while gross sale proceeds still require disclosure.

Gross sale proceeds are different from taxable capital gains. If shares bought for ₹3 lakh were sold for ₹5.30 lakh, Schedule FA may require the gross proceeds of ₹5.30 lakh, while the capital gain of ₹2.30 lakh is computed separately and reported in Schedule CG.

Income Reporting and Tax Credits

Entering dividends, interest or sale proceeds in Schedule FA does not complete the income reporting obligation. Schedule FA records the foreign asset, account and related gross amounts, while foreign income must also be entered in the appropriate income schedules.

Schedule FSI reports income from foreign sources. Schedule OS covers taxable dividends or interest, Schedule CG covers taxable capital gains, Schedule TR summarises foreign tax relief and Form 67 supports a claim for foreign tax credit.

Foreign-source income must appear in Schedule FSI as well as under the relevant head of income. Tax deducted by an overseas broker or foreign government does not automatically remove an Indian tax obligation, and a taxpayer must determine whether credit is available under the applicable Double Taxation Avoidance Agreement, section 90, section 90A or section 91.

Currency Conversion Rules

All Schedule FA amounts must be reported in Indian rupees. The applicable State Bank of India telegraphic transfer buying rate, commonly called the SBI TT buying rate, must be used in line with the department’s guidance.

The relevant rate can depend on the date connected with each item, such as the investment date, the date of the peak balance or peak investment value, or the closing date of the reporting period. The initial value, peak value, closing value, dividend and sale proceeds can therefore require different conversion rates.

An online search-engine rate, annual average rate, broker’s internal conversion rate or December 31 rate should not automatically be applied to every entry. Statements covering January 1 through December 31, 2025 are more useful than records covering only the Indian financial year.

Record-Keeping and Documentation

Brokerage statements, bank statements, transaction histories, dividend reports, interest certificates, vesting records for restricted stock units, stock-option exercise records, foreign tax statements, purchase confirmations and sale confirmations can help establish the required figures.

Taxpayers should retain the SBI TT buying rates used for each conversion and reconcile the foreign-currency statements with the rupee values entered in Schedule FA. The reconciliation should also cover foreign income in Schedule FSI, capital gains or other-source income, and foreign tax credit claimed through Schedule TR and Form 67.

Common Errors to Avoid

Common errors include using the April-to-March period instead of calendar year 2025, reporting only assets held on December 31, omitting investments sold during 2025, entering capital gains instead of gross sale proceeds, ignoring dormant accounts and failing to disclose signing authority.

Other errors arise when taxpayers report a brokerage account but not the underlying shares, use ITR-1 despite holding overseas assets, omit income because tax was deducted abroad or apply one exchange rate to every entry. A nil closing balance does not necessarily remove an asset from Schedule FA.

Penalties and Thresholds

The Black Money Act contains penalty and prosecution provisions for specified failures involving foreign income and assets. The current provisions generally protect non-immovable foreign assets with an aggregate value not exceeding ₹20 lakh from specified penalty and prosecution provisions, but that threshold does not extend to foreign immovable property.

Official guidance also provides for a penalty of ₹10 lakh for specified failures to disclose foreign assets where statutory conditions apply. The ₹20 lakh threshold is not a general exemption from Schedule FA; it relates to particular penal provisions.

Final Checklist

Before submitting the return, resident and ordinarily resident taxpayers should review every foreign account and asset held between January 1 and December 31, 2025. The final check should include assets sold or closed during the year, the separate treatment of brokerage accounts and securities, dividends, interest, gross sale proceeds, income schedules, foreign tax credit and the selected return form.