Recently, the Income Tax Department (ITD) sent out reminders to taxpayers about disclosing their incomes and investments in foreign countries. They also said that taxpayers who fail to disclose their foreign assets may face penalty of ₹10 lakh or imprisonment upto 7 years or both.
So, if you have any investments abroad, here’s a detailed guide to help you out.
To start with, there are two things.
Disclosing your foreign assets
Reporting your foreign income
Both require you to fill specific schedules in your ITR—Schedule FA for foreign assets and Schedule FSI for foreign-sourced income.
Reporting foreign assets (Schedule FA)
You need to report all the foreign assets you were holding as of 31st December of the FY. For example, while filing for FY 2023-24, disclose assets held as of 31st December 2023.
While for different assets, you’ll be asked for varied information, as most resident individuals invest in foreign markets, here’s the information you’ll need while reporting foreign stocks:
Country name and code: The country where the asset is located.
Entity details: Name, address, and zip code of the organization you’ve invested in.
Date of acquisition: The date you made the investment.
Initial value: The amount you invested initially.
Peak value: The highest value of the investment during the calendar year. For non-equity investments, it’s the highest balance in your investment account.
Closing value: The value as of 31st December.
Income credited or paid: Any dividends or interest earned, including tax deducted.
Proceeds from sale: Amount received from selling the investments.
This was about all the assets you were holding in a particular year.
Reporting foreign income:
If you’ve sold any of the foreign assets mentioned earlier or earned any income abroad—such as dividends, interest, or rent—you’ll need to report it under Schedule FSI in your ITR.
Here’s how to do it:
Start by selecting the correct head of income based on the type of income you’ve earned, such as salary, rental income, capital gains, etc.
Specify the country where the income was earned and provide either the Taxpayer Identification Number (TIN) or your passport number.
Enter the amount of income earned (in INR) and details of any taxes paid abroad on this income.
Claiming tax relief (Schedule TR):
If you earn income from another country, it’s possible that both the foreign government and the Indian government are taxing it. To avoid this double taxation, India has signed Double Tax Avoidance Agreements (DTAA) with many countries. Under DTAA, you can claim tax relief for taxes paid abroad.
Schedule TR in your ITR will automatically calculate the tax relief based on the details you provided in Schedule FSI.
The maximum relief you can claim is limited to either:
The tax paid in the foreign country, or
The tax payable in India on the same income—whichever is lower.
Now, schedule TR will auto-populate the amount of tax relief available from schedule FSI.
In case the tax liability in India is lower than what you have paid abroad, you will not receive any refund.
Additionally, don’t forget to file Form 67 on the ITD portal before submitting your ITR. Filing Form 67 is mandatory to claim foreign tax credit; otherwise, your claim might be disallowed.
Some key things to remember:
Reporting period:
Foreign assets: Report the value of your holdings as of 31st December of the relevant calendar year (e.g. 31st Dec 2023 for FY 2023-24)
Foreign income: Covers income earned between 1st April to 31st March of the financial year (e.g., FY 2023-24).
Currency conversion:
All amounts must be reported in INR, using the Telegraphic Transfer Buying Rate (TTBR) determined by SBI. Here is the link to know which date’s conversion rate should be used.
Trade-wise disclosure:
When reporting foreign stock holdings in Schedule FA, you must list each purchase transaction separately as of 31st December, even if they are shares of the same company. This helps accurately reflect the holding period of each investment in your portfolio, which can be used while calculating capital gains.
Here’s a video for you!
If you have any further questions on the reporting for FA and FSI, comment down below.
Do i need to disclose my US Equity holding in ITR, althought i have not incurred and Capital Gains and not received and any Dividend income from the same.
If Yes, where do i do it when filling my ITR from Quicko.
You are required to report all your foreign holdings under Schedule FA while filing your ITR.
As of now, Quicko does not support this feature, hence you’ve 2 alternatives:
Please clarify, My consultant has filed the ITR for AY 23-24 but missed the schedule FA, Now I need to revise the return by adding schedule FA , I have only Equity shares , no dividend no capital gains.
If I opt for Quicko MEET , Please let me know the fees , and if possible can you please share an example w.r.t adding Schedule FA.
You can definitely file a revised return. Since you’ve foreign equity holding, you must report them under schedule FA.
You can book a MEET using this link > click here.
You can refer to the user manual of the ITD which shows how to add schedule FA in your ITR.
I have sold RSU on the date of vesting itself in the month of march and received Cash after deducting TDS. Do I need to report sale proceeds in FA schedule for A.Y. 2023-24? as the same has been shown in Form 16 for A.Y. 2023-24.
Do I need to report Depository details in FA schedule even if we don’t hold any shares at the year end?
Initial investment value to be shown as “0”? as there is no cost attached to it.
Peak value to be reported for the holding period in my case I have sold on the same day. Do I need to show sale value as Peak value?
Is Closing value is “0” if we don’t hold shares at year end?
Do I need to report in Schedule CG as “0” for these RSU’s
7.If the RSU’s sold in march need not to be reported in A.Y.2023-24 then do I need to report in A.Y. 2024-25?
For suppose if we receive 30 shares and 14 shares have been held by broker, do we need to report sale proceeds in FA schedules as 16 * FMV or 30 * FMV, in Form 16 perquisites value shown as 30 * FMV and TDS has been deducted on the same.
I have foreign stocks. Im filling A3 table of FA schedule. It ask for following details.
Date of acquire
Initial cost
Peak value
Total gross amount paid/credit
Total gross proceeds from sell
I understand all except 4th requirement. What Im supposed to fill in this box?
Assume I bought 10 share of Google on 15/06/2022 at 100 usd rate. And received 10 usd dividend on 15/09/2022. And sold 2 shares on 15/12/2022 at 110 rate.
Could you please fill 1 a3 table entry using above information? Calculation in $ is sufficient, no need to convert to inr.
You are required to enter any dividend received in the 4th requirement (Total gross amount paid/credit).
If there is no dividend, you can enter 0 can proceed.
Can you please advise on Depository Account and Custodial Account in Table A1 and Table A2
If we have brokerage Account or Company has created one on behalf of us to hold RSU’s or ESOP in foreign country, do we need to report brokerage account details in Table A2?
(I have noted that Table A1 requires interest details but Table A2 requires CG, Dividend, Interest, Others etc., I am assuming we need to report brokerage details in Table A2 please confirm)
As per the law, a custodial account means an account (other than an insurance contract or annuity contract) for the benefit of another person that holds one or more financial assets.
I have a Rollover IRA / 401k retirement brokerage account in USA that holds mutual funds. Dividends are reinvested every quarter to the same fund. I returned to India 20 years ago.
Do I have to report 401k balance in schedule FA every year? If yes, under which table do I report?
Dividends are reinvested. Do I have to show them as interest received for that financial year in schedule FA?
Note that this is a retirement account like NPS in India. No tax in US unless we withdraw. So, no tax in India as well. The only question is, how do I make sure that I declare in schedule FA properly if it needs to be declared.
In terms of dates of acquisition, do I have to use the date the account was opened or the start date of the funds that I currently own in that account?
Yes, you have to declare this 401k balance in schedule FA in Table A1. You will have to declare the account number, account opening date, and closing as of 31 Dec 2022 for FY 2022-23 filing.
Also, the dividend received will be declared as other source income as a foreign dividend in your ITR.
Thanks for the clarification. The dividends received is non-taxable since it is a retirement account like NPS. Where and how do I declare such dividends in ITR if it needs to be declared.
In case the tax liability in India is lower than what you have paid abroad, you will not receive any refund.
