Updated August 2026.
Schedule FA is the part of the Indian tax return where resident taxpayers disclose foreign assets. It is also the obligation most commonly missed by investors holding US shares, because it does not behave like the rest of the return.
The single most important point: disclosure is triggered by holding the asset, not by earning from it or selling it. An investor who bought US shares, held them all year, sold nothing and received no dividend still has a Schedule FA obligation.
Who has to file it
Schedule FA applies to taxpayers who are resident and ordinarily resident in India and who, at any time during the relevant period, held a foreign asset, had signing authority over a foreign account, or were a beneficial owner or beneficiary of one.
Because it appears only in ITR-2 and ITR-3, holding foreign assets effectively rules out filing ITR-1 or ITR-4.
Non-residents and those who are resident but not ordinarily resident are generally outside its scope, though residential status should be determined carefully rather than assumed.
What has to be disclosed
For an investor using US stocks and ETFs, the reportable items typically include:
- Foreign equity and debt holdings — the US shares and ETF units themselves.
- Foreign custodial accounts — the brokerage account holding them.
- Foreign depository accounts — where applicable.
- RSUs and ESPP holdings from a foreign employer, including unsold vested shares. See RSU Taxation Explained.
- Any other foreign financial interest, including foreign bank accounts.
For each, the schedule asks for the entity's name and address, the nature of the interest, the date acquired, the initial investment, the peak value during the period, the closing value, and the income earned.
The calendar-year trap
This is the detail that trips up the most people, and it is worth stating carefully.
The Indian tax year runs April to March. Schedule FA has historically been reported by reference to the calendar year — for foreign assets, the relevant period has been the accounting period ending on 31 December preceding the return, reflecting the fact that most foreign jurisdictions report on a calendar-year basis.
The practical consequence is that the period you report for foreign assets is not the same as the period for the rest of your return. Investors who pull a 31 March broker statement and report from that are using the wrong window.
Because the exact reporting period and its wording have been revised across assessment years, confirm the applicable period for the year you are filing rather than carrying forward last year's assumption. This is a question worth putting to a CA directly.
Peak value
The schedule asks for the peak balance or peak value during the period, not just the closing value.
For a brokerage account this means the highest value the holding reached during the reporting period, which requires either a broker statement that reports it or a reconstruction from periodic statements. It is much easier to capture this as you go than to rebuild it in July.
Why it matters more than the tax involved
The amounts at stake in Schedule FA are often small. The consequences of omitting it are not.
Undisclosed foreign assets fall within the scope of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. That legislation carries substantially heavier penalties than ordinary under-reporting under the Income Tax Act, and it was written with concealment in mind.
An investor holding a modest, entirely legitimate, fully remitted-through-banking-channels US portfolio is not the target of that Act. But the disclosure requirement is what demonstrates that. Omitting it converts a transparent holding into an undisclosed one on the face of the record.
India also receives information about foreign financial accounts through automatic exchange of information arrangements, so the assumption that a foreign holding is invisible is not a safe one.
What to keep, from the first trade
Schedule FA is far easier to complete if the records exist already:
- Broker statements — monthly or quarterly, not just year-end, so peak value can be established.
- The account opening details: entity name, address, account number, date opened.
- Purchase dates and amounts for each holding.
- Dividend statements and withholding certificates.
- Bank remittance records for every LRS transfer.
- Closing valuations at the end of the relevant period.
Common mistakes
- Filing only when there is a gain. The obligation attaches to holding, not to profiting.
- Using the April–March period for foreign assets without checking the applicable reporting window.
- Reporting only the closing value and leaving peak value blank.
- Omitting vested but unsold RSUs, which are foreign assets like any other.
- Filing ITR-1 while holding foreign assets — the schedule does not exist in that form.
- Disclosing the shares but not the brokerage account, or the reverse.
Conclusion
Schedule FA is an annual disclosure, not a tax computation. It costs nothing to complete correctly and carries disproportionate consequences when skipped.
The workable approach is to treat it as part of the investment rather than part of tax season: keep the statements as they arrive, note the peak value, and confirm the applicable reporting period with your CA each year.
See also How to Report US Stocks in Your ITR and Tax on US Stocks in India.
Disclaimer: This article is for educational purposes only and is not tax or legal advice. Schedule FA requirements, including the applicable reporting period and disclosure format, are set by the Income Tax Department and have been revised across assessment years. Details are stated as of August 2026. Given the penalty exposure involved, please confirm your specific obligations with a qualified CA before filing, and read our Risk Disclosure and Disclaimer.