Who has to report foreign assets
Residents of India. The department's guidance on foreign assets puts it plainly: residents of India are required to furnish details of any foreign assets in Schedule FA, and the schedule on the ITR form itself is marked as available only in the case of a resident. Non-residents, and those who are not ordinarily resident, are outside the requirement.
| You are | Schedule FA |
|---|---|
| Resident and ordinarily resident in India | Applies. Report every foreign asset held at any time in the calendar year |
| Not ordinarily resident (RNOR) | Does not apply |
| Non-resident | Does not apply. See NRI income tax return filing |
Three consequences follow, and they are the ones people miss.
- Holding is the trigger, not income. The schedule asks for assets held at any time during the period, including any beneficial interest. An account that paid you nothing is still reported.
- Residential status is tested year by year. A returning NRI can be outside the requirement in one year and inside it the next, which is exactly when a first-year default happens.
- Your form changes. A resident with foreign assets or foreign income cannot use ITR-1 or ITR-4. The return is ITR-2, or ITR-3 if you also have business or professional income.
If your own residential status for the year is not obvious, settle that first, because everything else follows from it. See NRI income tax return filing for the residence tests.
What Schedule FA asks for, table by table
Schedule FA is headed "Details of Foreign Assets and Income from any source outside India", and it is split into tables. Each one covers a different kind of holding, and the same asset belongs in only one of them.
| Table | What it covers |
|---|---|
| A1 | Foreign Depository Accounts |
| A2 | Foreign Custodial Accounts |
| A3 | Foreign Equity and Debt Interest |
| A4 | Foreign Cash Value Insurance Contract or Annuity Contract |
| B | Financial Interest in any Entity |
| C | Immovable Property |
| D | Any other Capital Asset |
| E | Accounts with Signing Authority |
| F | Trusts created under laws outside India |
| G | Any other income from sources outside India |
In practice this is where the common holdings land: a foreign salary or savings account in A1, a brokerage account in A2, the shares themselves in A3, an overseas endowment or annuity policy in A4, a shareholding in a foreign company you helped set up in B, a flat abroad in C, and a directorship or an operational account you can sign on, but do not own, in E.
Table E catches people who own nothing at all. A signing authority on an employer's overseas account is reportable even though the money is not yours.
Crypto is a separate question. Schedule FA does not name crypto or virtual digital assets, and whether a balance on a foreign exchange belongs in it depends on how the account is held. We settle that on your actual account rather than on a rule of thumb, and gains are reported in Schedule VDA either way: see crypto tax filing.
The period is a calendar year, not your financial year
This single point causes more Schedule FA errors than anything else. The schedule asks for assets held at any time during the calendar year ending on 31 December, not during the Indian financial year.
| Return | Schedule FA period |
|---|---|
| AY 2026-27, for FY 2025-26 | 1 January 2025 to 31 December 2025 |
| AY 2025-26, for FY 2024-25 | 1 January 2024 to 31 December 2024 |
The ITR-2 form for AY 2026-27 says it in terms: details of foreign assets held, including any beneficial interest, at any time during the calendar year ending as on 31 December 2025.
Two practical effects. An account you closed in February 2025 is still reported in the AY 2026-27 return. An account you opened in February 2026 is not, even though it existed before you filed. Income, on the other hand, is taxed for the financial year, so the two sides of the return run on different clocks by design.
RSUs, ESOPs and shares in a foreign parent
This is the most common foreign asset held by an Indian resident, and it is also the one most often described loosely. The honest position is that the schedule does not use the words RSU or ESOP anywhere. What it asks about is a foreign equity or debt interest, a custodial account, and income from sources outside India.
So the reporting follows what you actually hold, not what the plan is called.
- Vested shares you now own, sitting in a foreign broker account, are a holding of foreign equity, and the account itself is a custodial account.
- Unvested units are a contractual expectation rather than a holding, and whether anything is reportable for the year turns on the plan documents and the vesting position on the dates concerned.
- Shares sold during the period were still held during part of it.
- Dividends received on foreign shares are foreign-source income, reported and taxed as such, with credit for any tax withheld abroad.
Separately, the perquisite on exercise or vesting is dealt with in your salary, usually through Form 16, and the capital gain arises later when you sell. Those are three different events on one holding, and they are reported in three different places. We read the grant, vesting and sale records together and agree the reporting with you before filing. For the gain itself, see capital gains ITR filing.
Schedule AL: assets and liabilities
Schedule AL is a different thing from Schedule FA and is frequently confused with it. It is headed "Assets and Liabilities at the end of the year", covers Indian and foreign assets, and on the ITR-2 form for AY 2026-27 it is marked as applicable where total income exceeds ₹1 crore.
| Point | Schedule FA | Schedule AL |
|---|---|---|
| What it reports | Foreign assets and foreign-source income | Assets and liabilities at the end of the year |
| Who fills it | Residents, whatever the income level | Only where total income exceeds ₹1 crore |
| Period | Calendar year ending 31 December | Position at the end of the year |
Many published guides still quote a ₹50 lakh threshold for Schedule AL. Check the schedule on the form for the year you are filing, which is what we do, rather than a carried-forward figure.
Foreign income, and credit for the tax you paid abroad
Foreign income of a resident is taxable in India, and the return has two schedules for it: Schedule FSI, which is details of income from outside India and tax relief, and Schedule TR, which is the summary of tax relief claimed for taxes paid outside India.
Relief comes through the treaty with that country, or through unilateral relief where there is no treaty, and it is claimed by filing the statement of foreign income and foreign tax. Rule 128 sets the conditions, and they are strict in three ways worth knowing before you count on the credit.
- Credit is against tax, surcharge and cess payable under the Act, and not against any sum payable by way of interest, fee or penalty.
- Credit is allowed in the year the income is assessed in India, which is not always the year the foreign tax was paid.
- Proof is required: a certificate from the foreign tax authority, or from the person responsible for deduction, or a statement by you accompanied by proof of payment such as a bank challan or online acknowledgement, or proof of deduction.
Form 67, and Form 44 from Tax Year 2026-27
The statement is furnished in Form 67, and Rule 128 requires it on or before the end of the assessment year relevant to the year in which the income was offered to tax, where the return was filed within the time allowed under section 139.
From Tax Year 2026-27 the statement of foreign income and foreign tax credit is Form 44, replacing Form 67, under the Income-tax Rules, 2026.
Miss the form and you can lose a credit you were entitled to, which is a pure cash loss and the most expensive avoidable mistake in this area. Where a treaty position is involved, the non-resident side of the paperwork is covered on Form 10F and DTAA relief.
How the department already knows
Assume it does. CBDT has said so publicly: it receives information relating to foreign financial assets of Indian residents from partner jurisdictions under the Common Reporting Standard, and from the United States under the Foreign Account Tax Compliance Act.
It has also acted on that information twice. Its November 2025 press release describes a second NUDGE campaign, in which taxpayers identified through the exchange of information were sent SMS and email messages from 28 November 2025 asking them to review and revise their returns for AY 2025-26 by 31 December 2025 to avoid penal consequences. The first campaign, a year earlier, led to 24,678 taxpayers revisiting their returns and disclosing foreign assets of ₹29,208 crore.
Two things follow. A mismatch between what a foreign bank reported and what your Schedule FA says is visible without anyone auditing you. And a message from the department is not the start of a negotiation: it is the last cheap moment to fix the return.
What non-disclosure exposes you to
Non-disclosure of a foreign asset is not treated as a small slip in the return. The department's guidance on foreign assets states that non-compliance can attract assessment and also stringent penalties and prosecutions under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Its 2025 press release makes the same point, describing the disclosure requirement as arising under both the Income-tax Act, 1961 and that Act, and warning of penal consequences.
This page does not publish a penalty figure, and you should be wary of any page that does. What applies depends on which provision is invoked, on whether the default is a failure to disclose an asset or an undisclosed foreign income, on the value involved and on your facts. A single number presented as "the penalty" is a guess dressed as a rule. We read the case and tell you, in writing, which provision is in play and what it carries, before you decide anything.
There is one structural consequence you should know about now, because it closes a door people assume is open. An updated return cannot be filed where the Assessing Officer holds information about you under the Black Money Act, 2015, or where information has been received under a tax treaty or a tax information exchange agreement. Since foreign account data arrives precisely through those channels, the ITR-U route can be shut in exactly the cases where people reach for it. See ITR-U updated return filing.
The disclosure window that closes on 31 December 2026
There is a one-time voluntary disclosure scheme open at the moment, and it closes on 31 December 2026.
| Point | Position |
|---|---|
| What it is | The Foreign Assets of Small Taxpayers Disclosure Scheme, a one-time voluntary disclosure scheme under Chapter IV of the Finance Act, 2026 |
| Rules | The Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026, notified by Notification 114/2026 |
| Open from | 16 August 2026 |
| Last date | 31 December 2026. No declaration can be filed after that date |
| Who can declare | An individual who was resident and ordinarily resident in India in the relevant year, whatever the current residential status |
| Two categories | One for undisclosed foreign assets and undisclosed foreign income up to an aggregate value of ₹1 crore, and one, up to an aggregate value of ₹5 crore, for foreign assets acquired out of income earned while a non-resident or out of income already taxed |
| Declaration | Filed in Form 1, with further forms prescribed for the amount payable, the proof of payment and the certificate |
| What it gives | Immunity from further tax, penalty and prosecution under the Black Money Act, 2015 in respect of what is validly declared, subject to the conditions in the scheme |
| Who cannot use it | Among others, where the asset or income represents proceeds of crime with proceedings under the Prevention of Money-Laundering Act, 2002, or where an assessment under the Black Money Act is already complete |
The charge differs between the two categories, and this page deliberately does not print the rates. The scheme is weeks old, the amounts and the valuation mechanics sit in the notified rules, and this is not a number to take from a summary. We read the rules against your actual figures and give you the cost in writing before any declaration is filed.
If you are carrying an unreported foreign asset, the decision is time-bound in a way most tax decisions are not. Get it looked at well before December, because a declaration needs valuations and documents behind it.
Which return form, and how to fix an earlier year
| Your situation | Route |
|---|---|
| Resident with foreign assets or foreign income, no business income | ITR-2 |
| The same, with business or professional income | ITR-3 |
| Resident with foreign assets, wanting to use ITR-1 or ITR-4 | Not available. Holding foreign assets or foreign income rules both out |
| FY 2025-26 not yet filed | Belated return by 31 December 2026 |
| FY 2025-26 filed without Schedule FA | Revised return by 31 March 2027 |
| An earlier year, Schedule FA missed | An updated return may be possible, but it is barred where the department holds information under the Black Money Act or through a treaty or exchange agreement. The disclosure scheme above may be the better route. This needs advice on the facts |
A revised return is the cheap fix and the window for FY 2025-26 is open until 31 March 2027. Almost every expensive case in this area started as a cheap one that was left alone. See belated and revised return filing and income tax return filing.
Government fee and our fee
There is no government fee to file a return, to file Form 67 or to file Form 44.
| Fee | Amount |
|---|---|
| Regikart professional fee, return with Schedule FA and foreign income | Fee on quote after a free review |
| Regikart professional fee, review of an earlier year or a disclosure scheme declaration | Fee on quote after a free review |
| Government fee to file the return or the foreign tax credit statement | No government fee |
| Cross-border return filing for a non-resident | From ₹1,999, see NRI income tax return filing |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 27 September 2026.
Foreign asset work is quoted after a review because the range is wide: one foreign savings account and a Form 67 is a different engagement from four years of RSU vesting across two employers and a flat in Dubai. Any tax, interest or amount payable under the disclosure scheme is paid by you to the department and is not part of our fee.
How we do this work
- Fix the residential status for each year. Schedule FA turns on it, and so does whether an earlier year needed it at all.
- List the holdings on a calendar-year basis. Accounts, brokerage holdings, insurance, entities, property, signing authorities and trusts, including anything held for part of the year only.
- Map each holding to its table. A1 to G, once each, with the columns the schedule asks for.
- Separate the three RSU events. Perquisite, holding and gain, each reported where it belongs.
- Build the credit. Schedule FSI, Schedule TR and Form 67 or Form 44, with the certificates or proof Rule 128 requires, filed by the end of the assessment year.
- Set out the earlier years plainly. Where a year was missed, we set out the routes available, including the disclosure scheme, with the cost of each in writing before you choose.
Documents we need
| Item | Why |
|---|---|
| Passport and travel dates for the year | Residential status decides whether Schedule FA applies at all |
| Foreign bank and brokerage statements for the calendar year | Table A1 and A2, and the peak and closing positions the schedule asks for |
| Share and unit holding statements | Table A3, and the cost records for a later sale |
| RSU or ESOP grant letters, vesting statements and sale confirmations | The three separate events on one holding |
| Form 16 and salary records | The perquisite already taxed through payroll |
| Insurance or annuity policy documents, where held abroad | Table A4 |
| Incorporation and shareholding documents for a foreign entity | Table B |
| Property documents and purchase records | Table C |
| Board or authorised-signatory letters | Table E, signing authority |
| Trust deed and beneficiary details | Table F |
| Foreign tax returns, withholding certificates and proof of payment | Rule 128 proof for the credit |
| Earlier years' Indian returns and computations | To see whether an earlier year needs correcting |
| AIS, TIS and Form 26AS | Downloaded with your consent, to compare with what has been reported about you |
Income-tax Act, 1961 and Income-tax Act, 2025
The return for FY 2025-26 is filed for AY 2026-27 under the Income-tax Act, 1961, in ITR-2 or ITR-3, with Schedule FA covering the calendar year ended 31 December 2025, and foreign tax credit claimed in Form 67 under Rule 128 of the Income-tax Rules, 1962.
From Tax Year 2026-27 the Income-tax Act, 2025 applies, returns are filed under section 263, and the statement of foreign income and foreign tax credit is Form 44. The new return forms are still being notified, so the schedule names and layout for that year are confirmed against the notified forms before we rely on them.
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 is a separate Act and continues to apply alongside both. Nothing in the move from the 1961 Act to the 2025 Act reduces the reporting obligation.
Why Regikart for foreign asset reporting
Regikart is a CA and CS firm serving 250+ clients from offices in Kolkata (head office), Delhi and Bengaluru. Foreign asset reporting is prepared and reviewed by a Chartered Accountant, and the judgment calls are put to you in writing.
- We tell you what is a rule and what is a judgment. The schedule does not name RSUs or crypto. Anyone who tells you it does is guessing on your behalf.
- We report on the right period. Calendar year for the schedule, financial year for the income.
- We protect the credit. Form 67 or Form 44 filed within Rule 128's time limit, with the proof it asks for.
- We do not quote you a penalty figure to frighten you into a fee. We read the case and set out the provision and the options.
- The same team afterwards. If a notice or a NUDGE message arrives, income tax notice reply answers it. For cross-border business structures, see international business setup and foreign subsidiary.