Do You Have Indian Bank Accounts While Living in the United States?

Millions of Indians living in the United States continue to maintain financial relationships with India through NRE accounts, NRO accounts, fixed deposits, demat accounts, mutual funds, provident funds, and family-owned bank accounts.

What many H-1B professionals, Green Card holders, OCI card holders, and Indian-Americans do not realize is that these accounts may trigger mandatory U.S. foreign asset reporting obligations, even when the income is already taxed in India.

One of the most important compliance requirements is the Foreign Bank Account Report (FBAR), formally known as FinCEN Form 114.

Failure to comply can result in substantial penalties, increased IRS scrutiny, and complex corrective filings.

This comprehensive guide explains everything NRIs need to know about FBAR filing, reporting Indian bank accounts, FATCA compliance, Form 8938, PFIC reporting, penalties, deadlines, and common mistakes.

What is FBAR?

FBAR stands for Foreign Bank Account Report.

The official filing is:

• FinCEN Form 114

FBAR is a disclosure form required under the Bank Secrecy Act and administered by the Financial Crimes Enforcement Network (FinCEN).

Contrary to popular belief:

• FBAR is not a tax return.
• FBAR does not calculate tax.
• FBAR does not create additional tax liability.
• FBAR is filed separately from Form 1040.

Its purpose is to disclose foreign financial accounts owned or controlled by U.S. persons.

For Indians living in the United States, FBAR is often the first and most important international compliance requirement.

Why FBAR Compliance is More Important Than Ever

The global financial reporting landscape has changed dramatically over the last decade.

Indian financial institutions increasingly exchange information under international reporting frameworks, including FATCA and other information-sharing agreements.

As a result, foreign financial accounts held by U.S. taxpayers are significantly more visible to U.S. authorities than ever before.

Many taxpayers who were never informed about FBAR obligations are now discovering years later that they should have been filing annual disclosures.

This makes proactive compliance essential for anyone with Indian financial assets.

Who Must File FBAR?

You generally must file FBAR if:

Condition 1: You Are a U.S. Person

This includes:

• U.S. Citizens
• Green Card Holders
• H-1B Visa Holders who qualify as U.S. tax residents
• L-1 Visa Holders
• Resident Aliens
• Certain Trusts and Entities
• Indian-Americans living in the United States

Condition 2: Your Foreign Financial Accounts Exceed $10,000

The combined value of all foreign financial accounts exceeds:

• USD 10,000
• at any point during the calendar year.
• The threshold applies to the aggregate balance of all foreign accounts combined.
• It is not a per-account threshold.

The Most Common FBAR Mistake Made by Indians in the USA

Many taxpayers incorrectly assume:

"My Indian account only has $4,000, so FBAR does not apply."

The law looks at the combined highest value of all foreign accounts.

Example

Total Foreign Assets = $10,500

FBAR Filing Required.

Even though none of the accounts individually exceeds $10,000, the aggregate value crosses the filing threshold.

Which Indian Accounts Must Be Reported on FBAR?

One of the biggest areas of confusion involves determining which Indian accounts are reportable.

The following accounts commonly trigger FBAR reporting.

NRE Accounts

NRE accounts maintained with Indian banks are generally reportable.

Common examples include:

• SBI NRE Account
• ICICI NRE Account
• HDFC NRE Account
• Axis Bank NRE Account
• Kotak Mahindra NRE Account
• NRO Accounts

NRO accounts are foreign financial accounts and are generally reportable under FBAR rules.

Savings Accounts

Regular Indian savings accounts held with any bank are generally reportable.

Fixed Deposits (FDs)

Fixed deposits are frequently overlooked.

Many taxpayers incorrectly assume that because a fixed deposit is linked to a savings account, it does not require separate consideration.

In many cases, fixed deposits constitute reportable foreign financial accounts.

FCNR Deposits

Foreign Currency Non-Resident deposits maintained in India generally require analysis for FBAR reporting.

Demat Accounts

Demat accounts often trigger FBAR reporting obligations.

Examples include:

• Zerodha
• Groww
• ICICI Direct
• HDFC Securities
• Kotak Securities
• Angel One
• Brokerage and Trading Accounts

Indian brokerage accounts holding shares, ETFs, bonds, or other securities often require disclosure.

Joint Accounts

Many Indians maintain joint accounts with:

• Parents
• Spouses
• Children
• Siblings

Joint ownership can still create FBAR filing obligations.

Signature Authority Accounts

FBAR may also apply where a taxpayer has signature authority over an account, even if they are not the beneficial owner.

Examples include:

• Family business accounts
• Company accounts
• Parent-owned accounts
• FBAR and Indian Mutual Funds

Indian mutual funds create some of the most complicated U.S. tax compliance challenges.

For many taxpayers, Indian mutual funds can trigger multiple reporting requirements simultaneously:

• FBAR (FinCEN Form 114)
• FATCA (Form 8938)
• PFIC Reporting (Form 8621)

This is why FBAR should never be analyzed in isolation.

A comprehensive review of all foreign assets is critical to ensure complete compliance.

FBAR and Provident Funds: EPF and PPF Considerations

Many NRIs and Indian-Americans continue to hold:

• Employee Provident Fund (EPF)
• Public Provident Fund (PPF)

These accounts often raise complex U.S. reporting questions involving:

• FBAR
• FATCA Form 8938
• Foreign Trust Reporting
• U.S. Taxability of Annual Growth

The treatment depends on specific facts and should be reviewed carefully.

FBAR vs FATCA: Understanding the Difference

One of the most searched questions by NRIs is:

Do I Need to File Both FBAR and Form 8938?

In many situations, the answer is yes.

Many taxpayers living in the United States must file both forms annually.

FBAR, FATCA and PFIC: The Three Biggest U.S. Compliance Risks for Indians

For Indians living in the United States, the three most common international reporting requirements are:

• FBAR
• Foreign financial account reporting.
• FATCA (Form 8938)
• Foreign asset reporting.
• PFIC Reporting (Form 8621)

Reporting of Indian mutual funds and certain foreign pooled investments.

These three compliance areas form the foundation of India-U.S. international tax reporting.

Information Required for FBAR Filing

To prepare FBAR accurately, gather:

• Bank Name
• Branch Information
• Account Number
• Account Type
• Ownership Details
• Joint Holder Information
• Maximum Annual Balance
• Currency Conversion Information

Maintaining proper documentation is critical in the event of future IRS inquiries.

FBAR Filing Deadline for 2026

For Tax Year 2025:

• Original Due Date
• April 15, 2026
• Automatic Extension
• October 15, 2026

No separate extension request is required.

Many taxpayers mistakenly assume that filing a tax return extension automatically extends FBAR obligations.

FBAR follows its own filing rules and deadlines.

FBAR Penalties: Why Non-Compliance Can Be Costly

The U.S. government takes foreign account reporting seriously.

Penalties may arise for:

• Failure to file
• Late filing
• Incomplete reporting
• Omitted accounts
• Incorrect disclosures

Depending on the circumstances, penalties can become significant.

This is why professional review is strongly recommended before filing.

Missed FBAR Filings? You May Still Have Options

Many taxpayers discover FBAR obligations years after becoming U.S. tax residents.

Common situations include:

• Newly arrived H-1B professionals
• First-time Green Card holders
• Indian-Americans inheriting accounts in India
• Taxpayers changing CPAs
• Individuals never informed about foreign reporting requirements
• Depending on the facts, corrective filing options may be available.

Before submitting late disclosures, taxpayers should seek professional guidance to evaluate the most appropriate compliance path.

FBAR Checklist for Indians Living in the USA

You may need FBAR filing if you have:

• NRE Accounts
• NRO Accounts
• Indian Savings Accounts
• Fixed Deposits
• FCNR Deposits
• Demat Accounts
• Indian Brokerage Accounts
• Joint Accounts
• Family-Owned Accounts
• Signature Authority Accounts
• Provident Fund Accounts
• Foreign Financial Assets Exceeding $10,000 in Aggregate

If any of these apply, an annual FBAR review should be part of your U.S. tax compliance process.

Why NRIs Across the United States Choose Dinesh Aarjav & Associates

Dinesh Aarjav & Associates is a specialized India-U.S. cross-border tax advisory firm assisting:

• H-1B Visa Holders
• Green Card Holders
• OCI Card Holders
• Returning NRIs
• Indian-Americans
• Global Mobility Professionals
• Entrepreneurs with Indian Assets

Our team includes:

• Chartered Accountants
• U.S. CPAs
• IRS Enrolled Agents
• International Tax Specialists

We assist with:

• U.S. Tax Return Preparation
• Form 1040
• Form 1040NR
• FBAR Filing
• FinCEN Form 114
• FATCA Reporting
• Form 8938
• PFIC Reporting
• Form 8621
• Foreign Tax Credits
• Form 1116
• India-U.S. DTAA Planning
• RNOR Planning
• Returning to India Tax Planning
• Foreign Asset Compliance Reviews

Serving clients across:

• California
• Texas
• Washington
• New Jersey
• New York
• Illinois
• Massachusetts
• Florida
• Virginia
• North Carolina

as well as NRIs worldwide.

Need Help with FBAR Filing, FATCA, PFIC Reporting or U.S. Tax Returns?

If you are an H-1B professional, Green Card holder, OCI card holder, Indian-American family, or NRI with Indian bank accounts, fixed deposits, mutual funds, demat accounts, or other foreign assets, FBAR compliance should be an essential part of your annual U.S. tax filing strategy.

At Dinesh Aarjav & Associates, we help clients navigate FBAR filing, FATCA compliance, PFIC reporting, foreign asset disclosures, India-U.S. DTAA planning, RNOR planning, and cross-border tax compliance with confidence.