What Schedule FA is
Schedule FA is a section of the income tax return where a resident discloses assets held outside India. It is a disclosure, not a tax calculation. Filling it in does not by itself create a tax liability. Leaving it out when it applies to you is what creates the risk.
Who needs to fill it in
Schedule FA applies to individuals who are resident and ordinarily resident in India for the year in question. If you are a non-resident, or resident but not ordinarily resident, it does not apply to you.
Two points catch people out:
- It applies even if you earned nothing from the asset and sold nothing during the year.
- It applies even if your total income is below the basic exemption limit. Holding a reportable foreign asset is itself a reason you are required to file a return.
Because Schedule FA appears only in ITR-2 and ITR-3, filing ITR-1 when you hold foreign assets makes the return defective. This is the most frequent reason we see returns being revised.
The calendar year trap
Schedule FA is reported for the calendar year, not the financial year. For a return covering financial year 2025-26, you disclose foreign assets held between 1 January 2025 and 31 December 2025.
Almost every other schedule in the return runs April to March, so it is a very easy thing to get wrong, and it quietly changes your peak and closing values.
What actually gets reported
Schedule FA is split into tables by asset type. The ones that come up most for salaried filers are:
- Table A1, foreign depository accountsOrdinary bank accounts held abroad
- Table A2, foreign custodial accountsThe brokerage account itself, for example your Morgan Stanley or Charles Schwab account
- Table A3, foreign equity and debt interestThe shares themselves, including RSUs, GSUs and ESPP shares
- Table A6, immovable property held abroadProperty you own outside India
For each holding in Table A3 you report the initial value of the investment, the peak value reached during the calendar year, the closing value at 31 December, and the gross proceeds of anything sold. Peak value is computed per holding across the year, which is why a spreadsheet built lot by lot from your broker statement matters more than a single year-end figure.
Getting the currency conversion right
Values are converted into rupees using the State Bank of India telegraphic transfer buying rate. The date whose rate applies is not the same for every figure, so peak value, closing value and sale proceeds are generally converted at different rates. Applying one flat annual rate across the whole schedule is a shortcut that does not hold up.
Foreign income, and not paying tax twice
Disclosure is one half. The other half is making sure income earned abroad is taxed once, not twice.
Schedule FSI
Foreign source income, such as dividends from overseas shares, is reported here alongside the tax paid outside India.
Schedule TR
This is where relief under the relevant Double Taxation Avoidance Agreement is claimed against your Indian liability.
Form 67
Form 67 supports the foreign tax credit claim and needs to be filed for the credit to be allowed. For United States dividends, tax is usually withheld at 25% under the treaty, and that is a meaningful amount to lose by skipping a form.
What happens if a disclosure was missed
If you are reading this because you think you missed a year, please do not panic, and please do not ignore it. Non-disclosure can attract a penalty under the Black Money Act, but since 1 October 2024 that penalty does not apply where the aggregate value of the undisclosed foreign assets, other than immovable property, stays within ₹20 lakh. Depending on the year, an updated return under Section 139(8A) or a revised return may also be open to you.
Bring us the years you are unsure about. We will look at them honestly and tell you where you actually stand before you commit to anything.
Documents that make this straightforward
- Full calendar year broker statements, January to December, not April to March
- Account opening details for each foreign account, including the institution address and account number
- Vesting, purchase and sale confirmations
- Dividend statements and the foreign tax withheld, typically Form 1042-S for United States holdings
- Foreign bank account statements, if you hold one
Company specific checklists showing where each document sits in your broker portal are available for Alphabet GSUs and Amazon RSUs.
How we handle it for you
We rebuild your foreign holdings lot by lot from the statements you send, compute peak and closing values per holding at the correct conversion rates, prepare every applicable Schedule FA table, and prepare Form 67 where a foreign tax credit is due. You see the working, not just a filled form, and a chartered accountant walks you through it before anything is submitted.
Questions filers ask us
The things people most often want settled before they start.
Who has to file Schedule FA?
Any individual who qualifies as a resident and ordinarily resident in India and who held a foreign asset or was a beneficial owner of one at any time during the relevant period. Non-residents and those who are resident but not ordinarily resident are outside its scope.
Does Schedule FA follow the financial year or the calendar year?
Schedule FA is reported for the calendar year, not the April to March financial year. For a return covering financial year 2025-26, you report foreign assets held during the calendar year 1 January 2025 to 31 December 2025. Reporting April to March figures is one of the most common errors we correct.
Do I have to report foreign shares even if I did not sell anything?
Yes. Schedule FA is a disclosure of holdings, not of income. If you held foreign shares at any point during the calendar year, they are reportable even if you sold nothing, earned no dividend, and had no tax to pay.
What exchange rate should I use for Schedule FA values?
Foreign currency values are converted using the State Bank of India telegraphic transfer buying rate. Which date's rate applies depends on the figure being reported, so peak value, closing value and sale proceeds are not all converted at the same rate.
What is the penalty for not disclosing foreign assets?
Non-disclosure can attract a penalty under the Black Money Act. Since 1 October 2024, that penalty does not apply where the aggregate value of the undisclosed foreign assets, other than immovable property, stays within ₹20 lakh. If you think you may have missed a disclosure, please speak to us rather than leaving it, because the position is often better than people fear.