—International Taxation & Transfer Pricing
Foreign Assets & Income Disclosure for Residents
Reporting of foreign assets, foreign bank accounts, ESOPs / RSUs and foreign income; Black Money Act compliance.
Handled by a practising Chartered Accountant or Company Secretary.
Scope of work
Reporting of foreign assets, foreign bank accounts, ESOPs / RSUs and foreign income; Black Money Act compliance.
Key deliverables
- Disclosure schedules and compliance note
Governing law
Income-tax Act (1961 / 2025, as applicable to the period); Black Money Act, 2015
Frequency
Annual
REGISTRATION ONLY
Foreign Assets & Income Disclosure for Residents
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- Disclosure schedules and compliance note
REGISTRATION + COMPLIANCE CARE
Foreign Assets & Income Disclosure for Residents + Compliance Care
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+ ₹9,599/yr for year-one ROC compliance
- Disclosure schedules and compliance note
- Financial statements in Schedule III format
- Board report and AGM notice
- Filed AOC-4 with SRN
- Filed MGT-7 / MGT-7A with SRN
- Board and AGM minutes
500+
Companies incorporated
100%
CA/CS-signed filings
4.8/5
Founder rating
—A closer look
Understanding foreign asset and income disclosure
Everything below is written for Indian residents with foreign bank accounts, shares, RSUs, or property — what must be reported, how, and what happens if it isn't.
What is foreign asset and income disclosure?
Indian residents who are ordinarily resident must report their foreign assets and foreign income in their income-tax return — foreign bank accounts, shares and RSUs in foreign companies, foreign mutual funds, foreign property, interests in foreign entities, and signing authority over foreign accounts.
This applies even if the asset earned nothing, and even if no tax is due. The Black Money Act imposes heavy penalties for failing to report, so getting it right matters even for relatively small holdings.
The key terms
The main reporting rules:
- Who must report
- Individuals who are resident and ordinarily resident, and other residents such as companies, with foreign assets or income.
- Schedule FA
- The schedule in the income-tax return listing foreign assets — accounts, securities, property, and other interests.
- Calendar-year basis
- Foreign assets are reported for the calendar year ending during the financial year — for FY 2025-26, January to December 2025.
- Schedule FSI
- The schedule reporting foreign-source income, along with any foreign tax credit claimed.
- RSUs and ESOPs
- Shares of a foreign employer, including unvested awards in some cases and vested shares held with foreign brokers, are foreign assets to report.
- Black Money Act
- The law governing undisclosed foreign income and assets, with tax at a high rate and significant penalties.
- Small-holding relief
- The penalty for non-reporting doesn't apply where the aggregate value of foreign assets, other than immovable property, is ₹20 lakh or less — though reporting is still required.
A simple example
A Hyderabad engineer at a US tech company's Indian subsidiary receives RSUs that vest into a US brokerage account, and has a small US bank account from a previous posting. As a resident and ordinarily resident, they report the brokerage account, the shares held, and the bank account in Schedule FA for the calendar year, even though they didn't sell any shares. Dividends received on the shares are reported in Schedule FSI, with credit claimed for US tax withheld through Form 67.
Why it matters
Foreign asset reporting carries some of the highest penalties in Indian tax:
- Heavy penalties
- Failing to report foreign assets can attract a penalty under the Black Money Act, subject to the small-holding relief.
- Undisclosed income
- Undisclosed foreign income or assets can be taxed at a high rate with further penalties.
- Information exchange
- India receives financial account information from many countries automatically, so foreign accounts are visible to the department.
- RSUs are often missed
- Employees of foreign companies frequently don't realise their RSUs and brokerage accounts must be reported.
- No tax doesn't mean no reporting
- Assets must be reported even if they earned no income.
- Calendar-year trap
- Using the financial year instead of the calendar year for Schedule FA is a common error.
- Wrong ITR form
- Residents with foreign assets can't use the simplest return form.
Who is this for?
- Employees of foreign companies with RSUs, ESOPs, or ESPP shares
- Returning NRIs with foreign bank, retirement, or investment accounts
- Residents investing abroad through the Liberalised Remittance Scheme
- Residents owning foreign property
- Directors or signatories of foreign accounts
Returning NRIs who qualify as 'resident but not ordinarily resident' generally don't need to report foreign assets in Schedule FA during that period.
Schedule FA vs. Schedule FSI
Two different schedules:
| Aspect | Schedule FA | Schedule FSI |
|---|---|---|
| Reports | Foreign assets held | Foreign-source income earned |
| Period | Calendar year ending in the financial year | Financial year |
| Needed even without income? | Yes | No — only if there's foreign income |
| Linked to | Black Money Act penalties | Foreign tax credit and Form 67 |
What we'll need from you
- Account statements
- Statements for foreign bank and brokerage accounts for the calendar year.
- RSU and ESOP records
- Grant, vesting, and sale records from your employer's equity platform.
- Investment records
- Foreign funds, shares, and other investments.
- Property documents
- Purchase documents for any foreign property.
- Foreign tax documents
- Evidence of tax withheld on foreign income.
- Exchange rates
- Rates for converting values into rupees.
Fees depend on the number and complexity of foreign assets.
How we report foreign assets
Our approach:
- 1
Confirm residency
We confirm whether you're resident and ordinarily resident for the year.
- 2
List assets
Every foreign asset and account is listed.
- 3
Gather values
Peak and closing values, and income, are compiled for the calendar year.
- 4
Prepare Schedule FA
Assets are reported in the correct tables.
- 5
Report income
Foreign income goes into Schedule FSI, with Form 67 for credit.
- 6
Review past years
If assets weren't reported before, we advise on correcting past returns.
If past years weren't reported
Missing disclosures can often be addressed:
- Revised returns
- A revised return can correct recent years within the time allowed.
- Updated returns
- An updated return may be possible for older years, within the time limit, with additional tax where income was missed.
- Small-holding relief
- The penalty relief for foreign assets up to ₹20 lakh (other than immovable property) may apply.
- Respond to notices
- Respond promptly to any notice about foreign assets, with full records.
- Keep records
- Keep statements and grant records for future years.
- Report every year
- Report assets every year while you remain resident and ordinarily resident.
Benefits and responsibilities
Benefits
- Complete, accurate Schedule FA and FSI
- RSUs and brokerage accounts reported correctly
- Foreign tax credit claimed
- Past gaps addressed before notices
- Peace of mind on Black Money Act exposure
Responsibilities
- Tell us about every foreign account and asset
- Keep statements for the calendar year
- Share employer equity records
- Report every year while resident
- Use the correct ITR form
- Respond to notices promptly
—FAQ
Questions residents actually ask us
Generally yes. Vested shares held in a foreign brokerage account are foreign assets that residents who are ordinarily resident must report in Schedule FA, whether or not they've been sold.