What is Schedule FA?

Income Tax
66

@Shrutika_Shah

In Schedule FA, should the “Date of acquiring the interests” be the grant date, vest date, or exercise date? Some say vesting date, and some say exercise date, hence the confusion.

Grant Date for my stock is 2017
Vesting Date is 2018
Exercise Date is 2019 when I paid to purchase the ESOP.

Which date should I add in ITR?

67

I got some $250 worth of ESOP when I was working with my previous company, and this ESOP value is worth $1000 as of today, and stock is based in the USA. I got it in 2019

I had not mentioned it in my ITR, as I was unaware of it.

I read that there is a flat fine of 10 lakh Rs per year for not declaring foreign assets or holdings. This is a huge fine. Am I in trouble?

68

Hey @thethinker,

Yes, filing the ITR and disclosing your foreign holdings in Schedule FA is mandatory.

One option could have been to file an updated return, ITR- U. However, the same can be filed only for the past 2 AYs and only when you have some additional tax liability. As in your case the ESOPs were received in 2019, an updated return for that financial cannot be filed.

Moving forward, you can file your ITR for AY 24-25 and report your foreign holdings in schedule FA (Foreign assets).

Hope this clarifies!

69

Should the vesting date be mentioned or the exercise date in the schedule FA under the date of acquisition field?

70

Hey @thethinker,

While filling up Schedule FA in the ITR, the Date of Acquisition will be the date on which you exercise the ESOPs.

Hope this clarifies your query.

71

I went through the conditions for 139(8A) and only thing I found it that tax cannot be less than 0, means cannot be refund. But did not see any mention that it cannot be 0 after adding new sources of income. Can you quote the reference for that please? Thank you.

72

@Surbhi_Pal, I have a tricky situation with my Abc stock transactions. I purchased the stock in 2022 and sold some quantity but held worth ₹6 lakh by December 2022. In 2023, I sold all remaining stock for ₹9.6 lakh and repurchased the same stock for ₹7 lakh before Nov 2023 and sold worth 1 Lakh in Dec’2023

Based on understanding For 2023 My schedule FA -A3 will be calculated as follow :

  • Initial Investment: ₹6 lakh (carried forward from 2022) + ₹7 lakh (purchases in 2023) = ₹13 lakh
  • Peak Value: ₹10 lakh (highest value of holding during the year after adjusting for sales)
  • Closing Value: ₹5.20 lakh (current portfolio holding value on 31dec’23)
  • Total Gross Amount Paid: ₹0 (no dividend received)
  • Total Proceeds from Redemption: ₹10.6 lakh (total sales in 2023)

Since I carried forward the investment from 2022, my initial investment for 2023 is higher than the peak value observed during the year. Are these figures correct?

73

I got shares through ESPP in july 2023(3 shares) and nov 2023(3 shares). I already hold 5 shares from 2022. Now what needs to be shown as closing value and peak value.

74

@TeamQuicko any one?

75

Hey @Rishabh_Kapoor,

Yes, your understanding is correct. As an alternative approach, you can separately report each transaction. You would first report the shares initially purchased and sold, followed by the entry for the repurchased shares. For each entry, you can individually account for the peak value and closing value.

Hope this helps!

1 Like
76

Hi @TeamQuicko - Firstly thanks as this is very helpful article and discussion forum to help people.

Question is if we have only purchased/received foreign stocks via ESPP and/or RSU, a) Is income derived from asset should be equal to prerequisite value or does it come only if the shares are sold or receive actual dividend
b) Similarly since a certain part of shares are withheld for taxes and there is a small short term capital gains on that due to differences in FX rates for same (reported as capital gains), does the same need to be shown as income in Schedule FA as well ?

77

Also if I have forgotten to fill schedule FA in past (but have reported the income as prerequisite and capital gains), what is recommended ? Should I fill Schedule FA in current ITR by giving details of past or is there a need for rectification of previous ITR?

78

Hi, I have a query related to schedule FA. I have received interest income from my US broker account fidelity and drivewealth (vested app).
Seems like they just convert the dividend amount to a money market fund on which they give dividend (like an interest)

  1. Should this interest amount be shown as a line item in form A2 / A3 of Schedule FA ? I have already accounted for this interest in FSI and OS.
  2. Do we need to show broker account in FA schedule ?
79

Hey @Saskey_Harbour,

Yes, you can report that income in Schedule FA and also report the broker account.

80

Failing to accurately report foreign assets can result in severe consequences, including a ₹10 lakh penalty under the Black Money Act, potential imprisonment of up to 7 years, and loss of DTAA relief. To avoid these issues, ensure you file your ITR correctly and disclose all foreign assets in Schedule FA by the deadline. Stay compliant and avoid hefty penalties by filing before July 31, 2023.

81

Hi @TeamQuicko, I have quick question regarding declaring foreign assets in Schedule FA in Table A3 for FY23-24.
Question - What should be the Date of acquiring the interest/investment, Initial Value of Investment, Peak Value and Closing Value for the stocks vested in Sep 2022 and held till date?

83

Hi @Vipul,

You can add the date of acquiring/investment as the date on which the shares were vested. For rest of the details, you can refer to the statement, it’ll contain the peak and closing values.

84

Hi @Surbhi_Pal. Thanks for your reply, but still I have some doubt over here. My broker account is in Morgan Stanley and that does not provide these details in the statement. So can you guide what should be this values? Like I know how the calculation works but just confused what price should be considered while reporting.

  1. For Initial Investment Values - Should that be the value on the date of acquiring the shares in 2022 or value on 1st Jan 2023?
  2. For Peak and Closing Values - Which price should we consider like peak value in 2022 as shares were acquired in 2022 or 2023’s peak value?

Thanks in advance.

85

Hi @Surbhi_Pal @Shrutika_Shah
I have query on mentioning the broker account on the schedule FA.

  1. Where to mention the broker account I have with Vested - Drive Wealth, LLC in the section? Is it in the Table A2?
  2. While mentioning it in A2 should I mention it as “Owner” or “Beneficial Owner” ?
  3. Also lets say we have both interest income and dividend income in this broker account. Do we need to make two entry for this account one for the nature of amount as “Dividend Income” and another one for nature of amount as “Interest” ?

Thanks in advance.

86

Team,

For RSUs that an employer grants, I understand that we need to show it in A3. If my employer grants 100 shares, of which 25 are with held for tax as TDS:

  1. Should I be showing 100 shares worth or 75 shares worth - because only 75 was credited to account?
  2. I see in most of the reply’s, “Initial value” taken as the cost of acquisition and “Amount paid/credit” as dividend paid - is there an authoritative source that you are relying on for this interpretion, if so can you please cite it? The wording in the ITR is ambigous - Initial Value may be interpreted as value during the start or accounting period and “Amount paid/credit in respect of the holding” can be interpreted as “The amount one has paid furthur during the calendar year for the holding”. Until FY19, the ITR had clearer titles “Any income derived from asset” - whereas now it simply says “Gross amount paid/credited”. Which is confusing, hence I wanted to know what is the authoritative source you are relying on for your interpretation.