At Dinesh Aarjav & Associates, we regularly guide clients on complex compliance requirements like foreign asset reporting. One of the most overlooked yet critical rules in the Income Tax Return (ITR) is the “Calendar Year Trap” in Schedule FA (Foreign Assets).

Many Resident Indians unknowingly make errors here — and with CRS & FATCA information sharing, the Income Tax Department already has details of your overseas accounts. Non-disclosure can result in Black Money Act penalties, interest, and even prosecution.

This blog explains who needs to file Schedule FA, what period to report, how to convert foreign values to INR, which assets to disclose, and how to stay compliant.

Who Needs to Report Foreign Assets in Schedule FA?

Mandatory for: Resident Indians under the Income-tax Act, 1961

Not applicable for:

• NRIs (Non-Resident Indians)
• RNORs (Resident but Not Ordinarily Residents)

If your status for the year is Resident, you must disclose all foreign assets and income in Schedule FA — even if already reported in Schedule AL (Assets & Liabilities).

The “Calendar Year Trap” – Jan–Dec Reporting

Most taxpayers assume ITR disclosures follow the financial year (April–March).
However, Schedule FA follows the calendar year.

For AY 2025–26: You must report assets held from 1 January 2024 to 31 December 2024.

Example:

• Opened a foreign bank account in Feb 2024? → Must report it.
• Sold foreign shares in Nov 2024? → Still disclose them.

Tip: Always gather bank statements, investment summaries, and property details for January to December, not April to March.

Using the SBI TT Buying Rate

When converting foreign asset values into Indian Rupees, you must use the State Bank of India’s Telegraphic Transfer (TT) Buying Rate applicable on:

• Date of peak balance in the account
• Date of investment in the asset
• 31 December closing date

Using unofficial exchange rates is non-compliant.

What You Must Report in Schedule FA

If you are a Resident Indian, you must disclose:

• Foreign bank accounts – peak/closing balances, interest earned
• Foreign investments – shares, bonds, funds, debt securities, dividends, gains
• Foreign insurance & annuity contracts – cash value, payouts
• Financial interest in foreign entities – company shares, partnerships, voting rights
• Foreign property – purchase cost, rental income, sale gains
• Signing authority in foreign accounts
• Trusts abroad – as trustee, settlor, or beneficiary
• Other foreign-sourced income – royalties, pensions, consulting income

Even if the asset was sold during the year, it must still be reported if held at any point in Jan–Dec.

Schedule FA vs Schedule AL – Double Reporting Rule

Even if you have disclosed an asset in Schedule AL, you must also disclose it in Schedule FA. Both schedules serve different purposes and missing either can trigger scrutiny.

Penalties for Non-Compliance

Under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015:

• Tax @ 30% of the asset value
• Penalty up to 3x the tax
• Prosecution with imprisonment up to 10 years

With CRS & FATCA, the Income Tax Department already receives your foreign account details from global banks and tax authorities.

Claiming Foreign Tax Credit – Form 67

If you’ve paid taxes abroad on foreign income:

• Report details in Schedule FSI (Foreign Source Income)
• Summarise relief in Schedule TR (Tax Relief)
• Submit Form 67 online before filing your ITR to claim Foreign Tax Credit under Sections 90, 90A, or 91.

Our Expert Advice

At Dinesh Aarjav & Associates, we assist clients in:

• Determining correct residential status
• Preparing Jan–Dec compliant Schedule FA
• Applying the SBI TT Buying Rate correctly
• Filing Form 67 for FTC claims
• Avoiding Black Money Act penalties

Stay Compliant. Avoid Penalties. Sleep Peacefully.

If you are a Resident Indian with any foreign bank account, investment, or income — now is the time to review your compliance for NRI Taxation.