Moment guide · FY 2026-27

I am disclosing foreign assets in Schedule FA

Who must file Schedule FA for foreign assets?

Schedule FA is required only of resident and ordinarily resident (ROR) individuals; RNORs do not file it. It covers all foreign accounts, real estate, equity, trusts, custodial accounts and other foreign assets — including dormant or closed ones held during the year. Undisclosed foreign assets attract a penalty of ₹10 lakh per year per asset under the Black Money Act, separate from income tax.

The #1 trap

Skipping Schedule FA for a dormant or closed foreign account — every foreign asset you held during the year must be disclosed, and the Black Money Act penalty is ₹10 lakh per year for each undisclosed foreign asset, on top of income-tax consequences. Also, RNORs wrongly file Schedule FA, or RORs wrongly skip it, because the ROR-only rule is misunderstood.

Amit, ROR returnee with multiple foreign holdings

Amit returned from the US in 2023 and became a resident and ordinarily resident (ROR) in 2024. For AY 2026-27 he files Schedule FA with his ITR, listing his US savings account, the US brokerage account holding stocks and ETFs, his Singapore fixed deposit, and his UK property. He also holds a small trust interest from his grandfather's estate in the US, which must be disclosed, because Schedule FA covers trusts and any beneficial interest in foreign assets. A US savings account he closed in March 2026 still appears in the schedule for FY 2025-26, because the asset existed during the year; the 'closed, so no disclosure' belief is wrong and the omission carries the same penalty risk. Under the Black Money Act, each undisclosed foreign asset attracts a penalty of ₹10 lakh per year, so leaving out the Singapore deposit would expose Amit to a ₹10 lakh penalty for that year alone, before any income-tax consequences on the income it generates. His friend, who is an RNOR after returning from London, does not file Schedule FA at all, because the schedule is required only of ROR taxpayers, and filing it unnecessarily invites queries. Amit reports the foreign income from these assets — US dividends, Singapore interest — in the return and claims foreign tax credit via Form 67 for the tax paid abroad. He keeps the account statements and the value workings for each asset as of 31 March. A quick call with us dials in the final figure. Amit also notes that Schedule FA asks for the maximum value of each foreign asset during the year, not just the year-end balance, so he reviews the statements for the peak values rather than the 31 March snapshot. If a foreign account was jointly held with his wife, the interest is his share and the account is disclosed with the joint-holding details. A foreign life insurance policy with a cash value is a foreign asset even when the premium is paid from Indian funds, and the surrender value is reported. The penalty of ₹10 lakh per year per asset applies for each undisclosed foreign asset under the Black Money Act, separate from the income-tax consequences on the undisclosed income it generates. A quick call with us dials in the final figure.