Who files Schedule FA
For AY 2026–27, the return for FY 2025–26 is filed under the Income-tax Act, 1961. Determine residential status under section 6 for the relevant previous year. A resident other than a resident but not ordinarily resident (RNOR) can have a filing obligation under the foreign asset proviso to section 139(1) even when income is below the normal filing threshold. The proviso covers an asset or financial interest outside India held as beneficial owner or otherwise, signing authority in a foreign account, and a beneficiary of a foreign asset. A narrow exception removes the independent filing trigger for a beneficiary if the asset income is includible in the income of the legal owner or beneficial owner covered by the proviso. Examine what the person actually holds and why a return must be filed before applying that exception.
The appropriate return for an individual will generally be ITR-2 without income from business or profession, or ITR-3 with such income. CRS and FATCA are separate mechanisms for exchanging specified financial account information. An exchange report can help check the return; it is neither the legal test for filing nor a complete list of reportable assets.
| Residential status | Schedule FA | Separate income question |
|---|---|---|
| Resident and ordinarily resident (ROR) | Complete the relevant tables for reportable interests and income. There is no general minimum foreign asset value for this filing trigger. | Worldwide income is generally within the scope of section 5, subject to exemptions, treaty relief and other applicable provisions. |
| Resident but not ordinarily resident (RNOR) | Schedule FA is not required under the form instructions. | Foreign income may still be taxable; in particular check income derived from a business controlled in, or a profession set up in, India. |
| Non-resident (NR) | Schedule FA is not required under the form instructions. | Apply section 5(2) and the relevant source and receipt rules, including any applicable treaty. |
Legal title, beneficial interest and signing authority
Section 139(1) distinguishes an individual who directly or indirectly provides consideration for an asset for their own or another person’s benefit (a beneficial owner) from a person who derives a benefit where someone else provided the consideration (a beneficiary). Title, funding and rights under the relevant agreement, trust deed or plan can point to different capacities. Review a signing mandate or power of attorney to see whether it actually grants authority over a foreign account. For a foreign trust, establish the person’s role and the interest held before completing Table F.
Calendar-year disclosure and financial-year income
Use the calendar year printed in the notified form. AY 2024–25 uses 1 January to 31 December 2023 in Schedule FA; AY 2026–27 uses 1 January to 31 December 2025. The period is set by the Indian return, irrespective of the foreign jurisdiction’s accounting year. The income schedules for AY 2026–27 ordinarily cover 1 April 2025 to 31 March 2026. Reconcile the overlapping transactions and explain the different periods rather than forcing the totals to agree.
The ten tables in Schedule FA
| Table | What to report | Key identifiers and amounts |
|---|---|---|
| A1 | Foreign depository accounts, such as checking, savings and deposit accounts. | Country, institution and address, ZIP code, account number, status, opening date, peak and closing balances and gross interest paid or credited. |
| A2 | Foreign custodial accounts, including brokerage custody accounts. | Country, institution and address, ZIP code, account number, status, opening date, peak and closing balances and gross amounts paid or credited by type. |
| A3 | Foreign equity and debt interests, including qualifying foreign shares or units. | Country, entity, address, ZIP code and nature, acquisition date, initial investment value, peak and closing values, gross amounts paid or credited and gross sale or redemption proceeds. |
| A4 | Foreign cash-value insurance or annuity contracts. | Country, financial institution and address, ZIP code, contract date, cash or surrender value and gross amount paid or credited. |
| B | Financial interest in a foreign entity. | Country and entity details, nature of interest, date since held, total investment at cost, income and the schedule and item where taxable income is offered. |
| C | Foreign immovable property. | Country, property address, ownership capacity, date of acquisition, total investment at cost, income and its return cross-reference. |
| D | Other capital assets outside India. | Country, nature of asset, ownership capacity, acquisition date, total investment at cost, income and its return cross-reference. |
| E | Foreign accounts over which the taxpayer has signing authority, to the extent not included in A to D. | Country, institution, holder and account details, peak balance or investment and the form’s fields for taxable income and its reporting. |
| F | Foreign trusts in which the taxpayer is a settlor, trustee or beneficiary. | Country and trust details, parties and roles, date since held, income derived and its return cross-reference where taxable. |
| G | Other foreign-source income not covered by A to F or by the business or profession schedule. | Country, payer, nature and amount of income, whether taxable and the return schedule and item where offered. |
Exchange rates: keep separate workings
For Schedule FA, use the State Bank of India telegraphic transfer buying rate (SBI TTBR) for the relevant field. The Department’s instructions identify the peak date, investment date or calendar-year closing date as applicable. Keep the dated evidence for each conversion and keep gross receipts and disposals separate from the asset valuations. Do not substitute an annual average or assume every transaction uses the same rate.
For taxable income under the 1961 Act, apply Rule 115 and the specified date for the relevant head and item, subject to any special rule. For example, the general Rule 115 date for capital gains is the last day of the month before transfer; this does not make gross proceeds in Schedule FA equal to taxable gains. Foreign tax credit is a separate Rule 128 calculation: the foreign tax is translated at the applicable SBI rate on the last day of the month preceding the month in which it was paid or deducted. Where eligible, use Schedules FSI and TR and furnish Form 67 under the applicable rules.
Black Money Act: reporting penalties, prosecution and tax are separate
Sections 42 and 43 concern specified failures to furnish a return or furnish complete and accurate information. For a case within either section, the Assessing Officer may direct a penalty of ₹10 lakh, subject to the statutory conditions and exceptions. The Finance (No. 2) Act, 2024 amended both sections from 1 October 2024: the penalty exception covers assets other than immovable property whose aggregate value does not exceed ₹20 lakh. It is neither a per-account threshold nor an exemption from filing. Do not assume that adding each holding’s separate annual peak is the statutory aggregation test. For an earlier period, check the applicable law and the then narrower exception for qualifying foreign bank account balances.
Sections 49 and 50 separately address wilful failures. Section 160 of the Finance Act, 2026 added a corresponding ₹20 lakh aggregate exception for assets other than immovable property to both offences, deemed effective from 1 October 2024. Establish the conduct and dates before assessing either provision. No penalty or prosecution exception automatically follows for an immovable property simply because its value is low.
Separately, section 3 generally charges 30% tax on undisclosed foreign income and assets determined under the Black Money Act. Section 41 provides for a penalty of three times the tax computed under section 10. Thus a taxable base of ₹100 produces ₹30 in tax and, if the section 41 penalty is directed, ₹90 in penalty, or ₹120 combined before any other applicable amounts. This is not a flat penalty for a Schedule FA omission. For an asset, check the statutory definition, the explanation of the source of investment, and the valuation and computation rules, including any permitted reduction for income previously assessed or assessable under the Acts.
Four worked examples
The facts, names and rates below are illustrative. Use actual statements, transaction records and documented rates in a return.
1. Foreign shares delivered under an RSU plan (A2 and A3)
Vikram, an ROR employee, holds 200 shares at the start of calendar year 2023. Their opening market value is USD 18,000; that figure is not their acquisition cost. In June, 100 units vest at an assumed USD 125 each (USD 12,500 gross). Assume 35 shares are withheld under net settlement and are never delivered to his account; 65 are credited, taking the holding to 265. Separately reconcile the plan, any acquisition or disposal of withheld shares, and Indian salary perquisite and withholding records. In October, the actual peak of the holding is assumed to be 265 shares at USD 140, or USD 37,100. Vikram sells 100 at USD 135 in November; 165 remain at 31 December, when the assumed market price is USD 139.69. Assume the broker’s separately reconciled account peak and closing figures match the share values below; verify cash, withdrawals and other securities before using the same numbers for both tables.
| Table or field | Working in USD | Illustrative INR |
|---|---|---|
| A2: custodial account | Peak USD 37,100; closing USD 23,048.85 on the stated assumption | Peak ₹30,79,300 at ₹83.00/USD; closing ₹19,17,664.32 at ₹83.20/USD |
| A3: foreign equity | 265 × USD 140 at peak; 165 × USD 139.69 at close. Establish initial investment value from acquisition records. | Peak ₹30,79,300; closing ₹19,17,664.32 before rounding |
| Gross dividend in relevant A2 and A3 fields | USD 240 gross | ₹19,800 using illustrative ₹82.50/USD |
| Gross disposal proceeds in relevant A2 and A3 fields | 100 × USD 135 = USD 13,500 | ₹11,17,800 using illustrative ₹82.80/USD |
Complete each applicable account and equity field; the same amounts in two disclosures do not mean income is taxed twice. Reconcile gross proceeds with Schedule CG, which uses gains after the applicable cost and computation rules. For unvested awards, review the plan for any actual reportable interest: a contingent award does not by itself establish ownership of the underlying shares. Shares received, vested rights and options can differ under different plans.
2. A dormant UK bank account identified through CRS (A1)
Meenakshi, assumed ROR for the relevant periods, kept a UK bank account after returning to India. Assume its highest balance in each relevant calendar year, including any interest retained, was GBP 1,250. At an assumed ₹104.80 per pound that is ₹1,31,000. Gross annual interest of GBP 8 would be ₹838.40 at the same illustrative rate; determine the actual income and its rate separately. She omitted the account from the returns for AYs 2022–23 and 2023–24. The omission can matter even if the savings came from explained, tax-paid employment income. If a notice proposes ₹10 lakh in each year, that is ₹20 lakh proposed, not an established liability. Determine whether her aggregate foreign bank balances qualified for the earlier statutory exception, and which version of the law applies to the proceeding. An exchanged record or a later statutory change does not establish how a particular case was decided. Keep bank records and proof of the source of savings, and check the legal routes available to correct the omitted disclosure and income.
3. Joint foreign immovable property (C)
Assume two ROR spouses own a Dubai apartment in equal, definite shares, with funding and entitlement in the same proportions. It was bought in March 2022 for AED 1,800,000 and produced gross rent of AED 100,000 in the illustrative period. At an assumed acquisition rate of ₹22.50/AED the full cost is ₹4,05,00,000. For illustration, use the same numerical rate for rent after independently checking the rate required for that field.
| Taxpayer | Ownership | Share of cost | Share of gross rent |
|---|---|---|---|
| Husband | 50% direct legal ownership | AED 900,000 = ₹2,02,50,000 | AED 50,000 = ₹11,25,000 |
| Wife | 50% direct legal ownership | AED 900,000 = ₹2,02,50,000 | AED 50,000 = ₹11,25,000 |
Each checks the disclosure in their own return. If one spouse funded the other’s share, verify beneficial ownership and separately consider sections 26 and 64 and any other applicable income rules. A name on the title does not, by itself, establish who provided consideration or in whose hands rent is taxed. Reconcile Table C with Schedule HP for the relevant income period; gross rent is not taxable house-property income.
4. Signing authority over a foreign employer’s account (E)
Alok, assumed ROR, can sign on a German employer’s treasury account but has no ownership or personal entitlement to its funds. If the account is not already included in A to D, complete Table E with the institution and account holder, account details and peak balance. An assumed peak of EUR 4,500,000 at ₹90 per euro is ₹40,50,00,000 (₹40.50 crore). The form asks whether account income is taxable in the taxpayer’s hands. On these assumptions, answer no; verify the facts if he has any personal entitlement. Signing authority creates a disclosure question even where the balance is not personal income. Reporting the account does not provide blanket immunity under the Black Money Act.
Filing checklist
- Confirm residential status, the correct return and the calendar year printed on Schedule FA.
- Collect foreign bank, brokerage, property, trust and plan documents, including closed or dormant accounts held during the period.
- Separate the legal holder, beneficial owner, beneficiary and signatory. Keep supporting ownership, funding and mandate records.
- Reconcile opening records, acquisitions, disposal proceeds, peak and closing values. Record dated SBI rates and gross income.
- Reconcile the relevant income heads and Schedules FSI and TR for the Indian financial year. Explain period and currency differences.
- Preserve valuation support for any Black Money Act exception separately from the Schedule FA filing decision.
Frequently asked questions
1. Do foreign shares worth ₹50,000 still have to be reported?
A reportable holding of an ROR taxpayer can trigger filing regardless of that value. The Black Money Act’s ₹20 lakh exception for qualifying non-immovable assets does not remove the return or Schedule FA obligation.
2. Can a missed Schedule FA be corrected through a revised return?
If the conditions for section 139(5) are met, revise the return within the applicable limit. For AY 2026–27 that is by 31 March 2027 or completion of assessment, whichever is earlier; the Department’s filing guidance applies the section 234-I fee of ₹1,000 if total income does not exceed ₹5 lakh and ₹5,000 otherwise for a revised return filed after 31 December 2026. Check the rules applicable to earlier years and any specific extensions. A correction does not automatically cancel a penalty or prosecution. An updated return is subject to separate restrictions under section 139(8A), including certain prior communications of information received under an exchange agreement and certain proceedings; do not assume it is available for a disclosure-only correction.
3. Are all digital assets held through a foreign exchange reportable in Table D?
A platform’s location or a foreign network node does not establish where every asset or right is located. Review the custody terms, rights and applicable law before deciding whether there is a foreign asset or other reportable interest. If there is a reportable foreign capital asset not covered elsewhere, examine Table D and its actual cost and income fields. Review Schedule VDA and the applicable taxable transfer rules separately.
4. Does a student who kept an account abroad have to report it after returning?
First determine residence for the relevant Indian previous year. For a reportable account held during the specified calendar year, an ROR taxpayer generally completes A1 even if it is dormant and has a nominal balance. A former visa or a low balance is not a filing exemption.
5. How does Schedule AL differ from Schedule FA?
For AY 2026–27, the notified ITR-2 Schedule AL applies if total income exceeds ₹1 crore. It records applicable assets and related liabilities at the end of the previous year. Schedule FA covers reportable foreign holdings, signing authority and income on its own terms, with its stated calendar-year period and no general minimum asset threshold.
6. Does an expired section 149 reassessment window prevent Black Money Act action?
The Black Money Act uses separate tests and timelines. Section 3 generally charges an undisclosed foreign asset in the previous year in which it comes to the Assessing Officer’s notice. Section 11 generally allows two years from the end of the financial year in which the section 10(1) notice was issued to complete assessment or reassessment, subject to exceptions and exclusions. Do not infer an unlimited assessment or prosecution period from section 3 or apply the ordinary reassessment deadline to every Black Money Act proceeding.
Sources
- CBDT Notification 46/2026: Form ITR-2 for AY 2026–27, Schedules FA and AL
- Income-tax Act, 1961: sections 5, 6, 64, 139 and related provisions
- Income Tax Department: Schedule FA, FSI and TR instructions and CRS/FATCA guide
- Black Money Act, 2015: original statutory text
- Finance Act, 2026: revisions to the 1961 Act and the Black Money Act
- Income Tax Department: transition and AY 2026–27 return guidance
- Income Tax Department: AY 2026–27 ITR-2 and section 234-I filing guidance
- Finance (No. 2) Act, 2024: amendments to Black Money Act sections 42 and 43
- Income-tax Rules, 1962: Rule 128 and Form 67