If you’re an Indian resident who owns foreign bank accounts, property, stocks, or business interests, you are required to disclose these foreign assets in your income tax return.
Non-disclosure can lead to heavy penalties under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015.
This blog explains how to declare foreign assets in your Indian tax return using Schedule FA, who must file it, and what types of assets are reportable for FY 2024-25 (AY 2025-26).
Legal Reference
- Section 139(1), Income Tax Act, 1961
- Black Money Act, 2015
- Schedule FA (Foreign Assets) in ITR Forms
- CBDT Notifications and Instructions for ITR-2 and ITR-3
Who Must Declare Foreign Assets?
You must declare foreign assets if you:
- Are a Resident and Ordinarily Resident (ROR) in India, AND
- Held any foreign asset or had signing authority in any overseas account at any time during FY 2024-25
This applies to:
- Salaried employees with ESOPs or stock options abroad
- Business owners or freelancers with foreign PayPal or Stripe balances
- Indians returning from abroad who retained foreign bank accounts
- NRIs becoming residents (check residency first)
Note: RNORs and NRIs are not required to fill Schedule FA.
What Foreign Assets Must Be Disclosed?
| Asset Type | Examples |
|---|---|
| Foreign Bank Accounts | HSBC UK, Bank of America, PayPal, Wise, NRE/NRO (foreign-sourced) |
| Financial Interests | Shares in foreign companies, foreign mutual funds, ETFs |
| Immovable Property | House, flat, or land owned abroad |
| Foreign Trusts | Settlor, trustee, or beneficiary roles |
| Foreign Business | Directorship or ownership in foreign firms |
| Other Assets | Life insurance policies, pensions, crypto on foreign exchanges |
Step-by-Step Guide to Declare Foreign Assets
Step 1: Determine your residential status (must be ROR to file Schedule FA)
Step 2: Identify all foreign-held assets as on any day during FY 2024-25
Step 3: Log in to https://www.incometax.gov.in and select ITR-2 or ITR-3
Step 4: Navigate to the Schedule FA section
Step 5: Enter:
- Country code
- Nature of asset (bank account, equity, property)
- Opening and closing balance
- Peak balance during the year
- Account holder status (beneficial owner or beneficiary)
- Income accrued from the asset and whether it is offered in ITR
Step 6: Verify and cross-check with AIS and foreign statements
Step 7: Submit and e-verify the ITR
Currency and Reporting Format
- All values must be converted into INR at the SBI TT Buying Rate as of 31st March 2025
- Details must be entered in Indian Rupees with correct foreign institution name and address
Penalties for Non-Disclosure
- ₹10 lakh per asset per year under the Black Money Act
- Prosecution and notice for reassessment
- Blocking of refunds and global scrutiny
- Treating ITR as defective return under Section 139(9)
Example Scenario
- Deepak worked in Germany till June 2024, returned to India and became ROR in FY 2024-25
- He held a Deutsche Bank account and a pension fund
- He files ITR-2 and declares both assets in Schedule FA
- Converts balances to INR as of 31st March 2025
- Avoids penalty by proper disclosure
Conclusion
Declaring foreign assets is a critical compliance requirement for residents earning global income or holding offshore accounts. If you qualify as ROR, skipping Schedule FA may lead to serious consequences under the Black Money Act.
Call to Action
Holding foreign bank accounts, stocks, or crypto and unsure if you need to declare them?
Book a foreign asset reporting session with Anshul Goyal, Chartered Accountant, and stay fully compliant under Indian and global tax rules.
Visit: https://calendly.com/anshulcpa
Disclaimer
This blog is for informational purposes only. Schedule FA filing is mandatory for ROR taxpayers and requires precise reporting, exchange rates, and legal accuracy.
Frequently Asked Questions
1. What is Schedule FA in the ITR?
It’s the section where residents declare foreign-held assets or signing authority.
2. I am an NRI — do I need to file Schedule FA?
No. Only applicable for ROR taxpayers.
3. Are PayPal or Stripe balances reportable?
Yes, if held outside India and under your control.
4. Is crypto held on Binance or Coinbase reportable?
Yes, if you are a resident and the wallet is foreign-hosted.
5. What if I closed the account during the year?
You must still report it if held on any day during the financial year.