Every July I get the same question from people holding US RSUs or an INDmoney/Vested/Schwab account, and the mistake is almost always identical. Putting it here so you can check your own return before you file.
1. It's the calendar year.
Everything else in your ITR is FY 2025-26. Schedule FA is not. For AY 2026-27 you report foreign assets held during 1 January 2025 to 31 December 2025. People pull an FY-basis statement from their broker, paste those numbers in, and the figures never reconcile with what the department already holds through CRS/FATCA.
Note the split: your foreign income stays on the normal FY basis (1 April 2025 – 31 March 2026) and goes in Schedule FSI. Only the asset disclosure in FA runs on the calendar year. Treat it as a separate data-pull, not a subset of your income working.
2. It reports holdings, not income. "I didn't sell anything" is not a reason to skip it.
Vested RSUs sitting in your Morgan Stanley / Schwab / Etrade account are reportable — the shares under Table A3, the account itself under A2. Nil income, unrealised loss, shares acquired entirely out of already-taxed salary: none of that removes the obligation. Dormant accounts from an old overseas posting are reportable too.
3. It applies only if you're Resident and Ordinarily Resident.
RNOR and Non-Resident don't fill Schedule FA at all. If you moved during the year, actually run your day count instead of assuming — a lot of people fill it when they didn't need to, and a lot skip it when they did.
4. ITR-1 and ITR-4 are off the table.
Those forms don't contain Schedule FA. Any foreign asset pushes you to ITR-2 or ITR-3, no matter how simple the rest of your return is. Filing ITR-1 while holding foreign assets is a clean route to a defective return.
5. Schedule FA ≠ Schedule FSI ≠ Schedule TR.
Three different jobs, and people routinely do one and assume they're done.
- FA — asset disclosure (calendar year)
- FSI — foreign income offered to tax (financial year)
- TR — the foreign tax credit claim, which depends on Form 67
Form 67 must be filed on or before the end of the relevant assessment year — 31 March 2027 for AY 2026-27 — but file it before you file the return, not after. Don't leave it to the deadline.
6. The ₹20 lakh threshold — read this one carefully.
The Finance (No. 2) Act 2024, with effect from 1 October 2024, replaced the old ₹5 lakh bank-account exclusion in the provisos to Sections 42 and 43 of the Black Money Act with a wider one: foreign assets other than immovable property, where the aggregate value does not exceed ₹20 lakh at any time during the relevant previous year. CBDT has since directed that prosecution under Sec 49/50 won't be initiated where penalty under Sec 42/43 isn't imposable in such cases.
This is relief from penalty and prosecution. It is not an exemption from disclosure. The Schedule FA obligation applies from the first rupee. Below ₹20 lakh you're shielded from the ₹10 lakh hit; you are not excused from reporting.
Two further points people miss: it doesn't cover foreign immovable property at all, and penalty proceedings validly initiated before the amendment aren't rescued by the higher threshold.
Why the stakes are odd here: the penalty under Sec 43 is a flat ₹10 lakh per assessment year. Not a percentage — flat, regardless of the asset's value and regardless of whether any tax was actually due. A ₹30 lakh RSU holding you forgot to disclose and on which you owed nothing still carries the same ₹10 lakh exposure as something far larger. That's why this schedule deserves more attention than its size suggests.
7. Conversion.
SBI TT buying rate. Get the reference date right for peak value versus closing value — the instructions specify them separately, and this is a common slip.
If you filed a previous year on ITR-1 with foreign assets sitting in the background, or skipped FA entirely, that's usually fixable — but the route depends on which year and how far along it is. Worth sorting before it finds you.
Practising CA. Happy to take questions in the comments.
