Schedule FA (Foreign Assets) is mandatory for Resident & Ordinarily Resident (ROR) individuals who hold any foreign asset or foreign income at any time during the relevant financial year, even if:

  • Asset is dormant
  • Income is not taxable in India
  • Asset was acquired in earlier years

Non-disclosure attracts severe penalties under the Black Money Act, 2015.

 

Asset-wise decoding (Simple & Practical)

1. Foreign ESOPs / RSUs

  • When to report:
    Every year from the year of vesting till they are sold.
  • Where to report:
    Schedule FA
  • Key point:
    Even if no shares are sold and no income arises, disclosure is compulsory.

 

2. Foreign RSUs – shares partly sold by employer to pay tax

  • When to report:
    Year in which shares are sold/transferred (sell-to-cover).
  • Where to report:
    Schedule CG (Capital Gains) for sale +
    Schedule FA for balance shares held.
  • Key point:
    Employer-sold shares are treated as sale by employee, not exempt.

 

3. Dividend from foreign shares

  • When to report:
    Year in which dividend is credited, not received.
  • Where to report:
    • Schedule OS (Income from Other Sources)
    • Schedule FA
  • Key point:
    Taxable in India; foreign tax credit may be claimed separately.

 

4. Dividend lying in foreign brokerage account

  • When to report:
    Every year till money is repatriated to India.
  • Where to report:
    Schedule FA
  • Key point:
    Mere retention abroad does not avoid disclosure.

 

5. Dormant / Low-balance foreign bank account

  • When to report:
    Every year till account is formally closed.
  • Where to report:
    Schedule FA
  • Key point:
    Zero or negligible balance is not an exemption.

 

6. Foreign insurance policy with surrender value

  • When to report:
    Every year till maturity / surrender.
  • Where to report:
    Schedule FA
  • Key point:
    Policies with cash/surrender value are treated as foreign assets.

 

7. Foreign immovable property

  • When to report:
    Every year till property is sold.
  • Where to report:
    Schedule FA
  • Key point:
    Rental income (if any) is reported separately under House Property / OS.

 

Important Compliance Notes

  • Disclosure is asset-based, not income-based.
  • Even old assets acquired when you were NRI must be reported once you become ROR.
  • Schedule FA requires peak balance / investment value, country, address, and acquisition details.
  • Non-reporting can lead to:
    • Penalty up to ₹10 lakh per asset
    • Prosecution under Black Money Act

 

Practical Tip

Before filing ITR:

  • Collect foreign brokerage statements
  • Track vesting, sale, dividend credit dates
  • Identify status: ROR vs RNOR vs NRI