Reporting of Foreign Assets and Income in Income Tax Return
1. In order to report foreign assets and income from a source outside India in Income tax return, firstly you have to determine the residential status of the assessee which is mentioned below in the table along with who is required to report :
| S No. | Residential Status | Income Taxable In India | Whether to report Foreign assets and Income? |
| 1. | Resident and ordinarily resident (ROR) | a. Income received or accrues or arises or is deemed to be received or accrues or arises India during the previous year.
b. Income which accrues or arises outside India even if it is not received or brought into India during the previous year. |
Yes |
| 2. | Resident but not ordinarily resident (RNOR) | a. Income received or accrues or arises or is deemed to be received or accrues or arises India during the previous year.
b. Income derived from business controlled in or profession setup in India. |
No |
| 3. | Non Resident (NR) | Income received or accrues or arises or is deemed to be received or accrues or arises India during the previous year. | No |
2. In order to report in Income tax return, you have to select Yes in S. No. 19 of Part B – TTI Computation of tax liability of total Income as demonstrated below which asked whether you at any time during the previous year :-
a. hold, as beneficial owner, beneficiary or otherwise, any asset (including financial interest in any entity) located outside India or
b. have signing authority in any account located outside India or
c. have income from any source outside India?
3. After selecting Yes as mentioned in point 2, you have to fill Schedule FA : Details of Foreign Assets and Income from any source outside India.
4. In Item no. A1 under schedule FA, assessee have to give details of Foreign Depository Accounts held (including any beneficial interest) at any time during the relevant account period in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and code | Country in which such account is maintained. |
| b. | Name of the financial institution | Name of the bank or financial institution with which the account is maintained. |
| c. | Address of the financial institution | Address of the bank or financial institution. |
| d. | ZIP Code | ZIP Code of the area where bank or financial institution is situated. |
| e. | Account Number | Account number of the foreign depository is to be given. |
| f. | Status | Status of the account is to be given, whether you are the owner or the beneficiary. |
| g. | Account opening date | Date when the account is open. |
| h. | Peak Balance during the period | Maximum balance maintained during the previous year. In order to convert the foreign current balance in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the date of peak balance in the bank account. |
| i. | Closing Balance | Closing balance of the bank account as on 31st March of the previous year is to be reported. In order to convert the foreign depository balance in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the closing date of accounting period. |
| j. | Gross Interest paid / credited to the account during the period | The amount of interest received in the foreign depository account maintained should be reported. In order to convert the gross interest paid or credited to the account in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the closing date of accounting period in the bank account. |
5. In Item no. A2 under schedule FA, assessee have to give details of Foreign Custodial Accounts held (including any beneficial interest) at any time during the relevant account period in the following format by giving details as mentioned above in Item no. A1.
6. In Item no. A3 under schedule FA, assessee have to give details of Foreign Equity and Debt Interest (including any beneficial interest) in any entity at any time during the relevant accounting period in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country in which entity or company is located. |
| b. | Name of the entity | Name of the entity or company of which the equity shares or debt instruments are held by the assessee. |
| c. | Address of the entity | Address of the entity. |
| d. | ZIP Code | ZIP Code of the area where the entity is situated. |
| e. | Nature of entity | Nature of entity means whether the entity is a company or LLP, whether it is listed on stock exchanges. |
| f. | Date of acquiring the Interest | Date of purchase or acquisition of stake in equity or debt instrument. |
| g. | Initial value of the investment | Amount paid on the purchase or acquisition. |
| h. | Peak value of investment Balance during the period | Maximum value of investment during the previous year. In order to convert the peak value of investment in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the date of peak value of investment. |
| i. | Closing Balance | Closing balance of the investment as on 31st March of the previous year is to be reported. In order to convert the investment in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the closing date of accounting period. |
| j. | Total gross amount paid / credited with respect to the holding during the period | The amount of interest / dividend received with respect to investment in debt or equity should be reported. In order to convert the gross amount paid or credited to the account in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the closing date of accounting period. |
| k. | Total gross proceeds from sale or redemption of investment during the period | The amount received on sale of equity stake or redemption of debt instrument should be reported. In order to convert the gross proceeds from sale in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the closing date of accounting period. |
7. In Item no. A4 under schedule FA, assessee have to give details of Foreign Cash Value Insurance Contract or Annuity Value Contract (including any beneficial interest) at any time during the relevant accounting period in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country in which entity or company is located where foreign cash value insurance contract or annuity value contract is taken. |
| b. | Name of the Financial Institution | Financial Institution where insurance contracts are held. |
| c. | Address of the Financial Institution | Address of the Financial Institution. |
| d. | ZIP Code | ZIP Code of the area where the entity is situated. |
| e. | Date of Contract | Date of entering insurance contract. |
| f. | The cash value or surrender value of the contract
|
Cash value or surrender value means the amount the policyholder get on cancellation of insurance contract. |
| g. | Total gross amount paid / credited with respect to the contract during the period | Total amount paid with respect to the contract. |
8. In Item no. B under schedule FA, assessee have to give details of Financial Interest in any entity held (including any beneficial interest) at any time during the relevant accounting period in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country in which entity or company is located in which assessee has financial interest. |
| b. | ZIP Code | ZIP Code of the area where the entity is situated. |
| c. | Nature of entity | Type of entity i.e. Company, LLP, partnership firm etc. |
| d. | Name of entity | Name of the entity in which assessee has financial interest. |
| e. | Address of entity | Address of the entity. |
| f. | Nature of Interest | Type of interest [whether holding equity, preference, debt etc]. |
| g. | Date Since Held | Date from which the financial Interest is held. |
| h. | Total Investment Cost | Total cost incurred in order to acquire the financial interest. |
| i. | Income accrued from such Interest | Income accrued from the financial interest acquired. |
| j. | Nature of Income | Type of Income received from the entity [Interest, Dividend, profits etc].
|
| k. | Income taxable and offered in the return of income | Income offered in the Indian Income tax return including the amount, schedule and item number of schedule where such income is offered to tax. |
9. In Item no. C under schedule FA, assessee have to give details of Immovable property held (including any beneficial interest) at any time during the relevant accounting period in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country where such immovable property is situated. |
| b. | ZIP Code | ZIP Code of the country. |
| c. | Address of the property | Address of the immovable property. |
| d. | Ownership | Ownership of the Immovable property (whether co-owned or single owner). |
| e. | Date of acquisition | Date on which the property was acquired. |
| f. | Total Investment (at cost) | Total amount paid to acquire such immovable property. |
| g. | Income derived from such property | Amount of income derived from immovable property. |
| h. | Nature of Income | Rent etc. |
| i. | Income taxable and offered in the return of income | Income offered in the Indian Income tax return including the amount, schedule and item number of schedule where such income is offered to tax. |
10. In Item no. D under schedule FA, assessee have to give details of any other capital asset held (including any beneficial interest) at any time during the relevant accounting period in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country where such capital asset is held. |
| b. | ZIP Code | Zip of the country. |
| c. | Nature of Asset | Type of asset |
| d. | Ownership | Ownership of the capital asset. |
| e. | Date of acquisition | Date on which such capital asset is acquired. |
| f. | Total Investment (at cost) | Total amount paid to acquire such capital asset |
| g. | Income derived from such asset | Total income derived from such asset. |
| h. | Nature of Income | Nature of income derived from such capital asset. |
| i. | Income taxable and offered in the return of income | Income offered in the Indian Income tax return including the amount, schedule and item number of schedule where such income is offered to tax. |
11. In Item no. E under schedule FA, assessee have to give details of account(s) in which it has the signing authority held (including any beneficial interest) at any time during the relevant accounting period and which is not included in A to D above in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Name of the Institution in which account is held | Institution in which the account is maintained where the assessee has the signing authority. |
| b. | Address of the Institution | Address of such institution. |
| c. | Country Name and Code | Country where such institution is situated. |
| d. | ZIP Code | ZIP code of the country. |
| e. | Name of the Account Holder | Name of the account holder where the assessee has the signing authority. |
| f. | Account Number | Account number of the account(s) held. |
| g. | Peak Balance / Investment during the year | Maximum value of investment during the previous year. In order to convert the peak value of investment in Indian rupees, as per Instructions contained in Taxmann’s Income tax rules, the rate of exchange for the calculation of the value in rupees of such asset situated outside India shall be the telegraphic transfer buying rate of such currency as on the date of peak value of investment. |
| h. | Whether income accrued is taxable? | If yes, provide below. |
| i. | Income taxable and offered in the return of income | Income offered in the Indian Income tax return including the amount, schedule and item number of schedule where such income is offered to tax. |
12. In Item no. F under schedule FA, assessee have to give details of trusts, created under the laws of a country outside India, in which you are a trustee, beneficiary or settlor in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country where such trust is located. |
| b. | ZIP Code | ZIP Code of the country. |
| c. | Name of the Trust | Name of the trust in which assessee is a trustee, beneficiary or settlor. |
| d. | Address of the Trust | Address of the Trust. |
| e. | Name of Trustees | The trustee is the person who possesses the assets for the interest of the Beneficiary. While in complete charge of the ‘trust assets,’ the trustee is obliged a legal duty to manage the trust property in the best possible manner for the advantage of the Beneficiaries. The trustee is prevented from practicing the trust asset for his ends. |
| f. | Address of Trustees | Address of Trustees. |
| g. | Name of Settlor | The Settlor is the person who creates the trust by placing a particular asset that s/he owns into the trust, i.e., by transferring that asset to other person (trustee) along with clear instructions that the asset be held for the profit of a third party. The Settlor may be either an separate or a legal entity. |
| h. | Address of Settlor | Address of Settlor. |
| i. | Date since position held | Date from which the assessee has held the position of trustee, beneficiary or settlor. |
| j. | Whether Income derived is taxable? | If yes, provide below. |
| k. | Income taxable and offered in the return of income | Income offered in the Indian Income tax return including the amount, schedule and item number of schedule where such income is offered to tax. |
13. In Item no. G under schedule FA, assessee have to give details of any other income derived from any source outside India which is not included in items A to F above and income under the head business or profession in the following format by giving details of :
| S. No. | Particulars | Remarks (If any) |
| a. | Country Name and Code | Country where such income is derived. |
| b. | ZIP Code | ZIP Code of the country. |
| c. | Name of the person from whom derived | Name of the person (company, Financial Institution etc.) from where the income is derived. |
| d. | Address of the person from whom derived | Address of the person. |
| e. | Income derived | Amount of Income derived. |
| f. | Nature of Income | Type of income derived. |
| g. | Whether taxable in the hands of assessee? | Whether income derived by assessee is taxable? If yes, provide below. |
| h. | Income taxable and offered in the return of income | Income offered in the Indian Income tax return including the amount, schedule and item number of schedule where such income is offered to tax. |
Note
1. Cash value Insurance contract means an insurance contract (other than an indemnity reinsurance contract between two insurance companies) that has a cash value.
2. Annuity contract means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals.
3. Custodial account is an account maintained for the benefit of a beneficiary, and administered by a legal guardian or custodian who has fiduciary obligation to the beneficiary.
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Author Bio
My daughter is studying abroad and having bank account. Do she need to file ITR and show foreign bank details as per recent newspaper advertainment.
My question is US Federal withheld the tax at 25 percent on dividend earned on stocks. Do we need to pay tax in India?
question is for FA A3, if I got shares of Rs. 100 in 2015 and sold in 2022 in Rs. 180; what should I fill in A3 (11) and A13 (13). As per my understanding A3 (11) should be 0 and A13(13) should be 180. Please confirm.
Also please comment if profit (Rs 80) would be reflected in my return automatically after filling these columns or I have to add manually elsewhere.
Dear Navneet,
I have a clarification regarding FA filing. I have invested in mutual funds with bank leverage loan in a foreign bank when I was NRI. Now I am ROR and have to file the ITR and report as FA. I want to know wether I can deduct the bank leverage loan interest from the dividend received from the mutual fund and report the balance in FA. Any other deduction applicable for leverage loan interest paid.
Regards.
Kumar
I am filing form 67 for some dividends I received from RSUs vested. Th US tax document is for the Jan to Dec 2022 period, but I have received some dividend in Feb 2023 as well. When filing form 67, should I report dividends from April 2022 to March 2023 ? Or the dividends from Jan 2022 to Dec 2022 ?
Dear Navneet,
Case: Business/Profession(Freelancing) – Resident(ROR), with purely export income, received in USD to foreign escrow(under a broker’s control) to domestic bank. Is this accrued outside India or inside India? Is this income from source outside India? If so, any declaration to be made(FSI, FA or TR)? Or is it deemed “income accrued in India”(as the brains of the business is resident in India)? Your point 13 explicitly says “In Item no. G under schedule FA, assessee have to give details of any other income derived from any source outside India which is not included in items A to F above and income under the head business or profession”. It excludes “business income” Correct? If declaration to be made, where or which items to include? Will be grateful for your opinion on this.
I am Indian resident with Indian employer.
My USA RSUs allotted (vested) in Feb 2023 and sold in March 2023.
The vesting income is included in Form 16 and included in salary schedule.
However, foreign assets will be reported in FY 24 return and not FY 23 return. – I have understood this so far.
Another confusion is Capital gain income- this Feb-Mar 23 capital gain from RSUs will be reported in FY 23 or FY 24? i report capital gain in FY 23 but FA schedule is blank in FY 23 (And reported in FY 24)?? It is very very wierd.
As per my view, if you are offering your capital gains in FY23 ITR, then better to report in FA schedule of FY23 although it is mentioned in the schedule that provide details for the year ending on 31 December 2022.
Hi Navneet, Thanks for the detailed explanation of schedule FA. One query which is not clear – If Shares are bought and sold in the same year – Is that to be shown in FA? Total gross proceeds from sale or redemption of investment during the period to be filled with Sale value? Does this attract any income tax or this amount is added to income until and unless specified in CG?
Regards,
Mahesh
You have to report those shares as it ask details of shares held during the year. So, if you held for even one day you have to report.
Further, yes, total gross proceeds to be filled with sales consideration.
Further, yes this attracts capital gains. It is to be treated as unlisted equity shares as per Indian Income Tax Act
Good morning,
My doubt is regarding: holding the different no. of shares of the same company in the same FY.
Say, I purchase 2 shares of Tesla in June and another 3 shares in August, will the TTB rate for the Peak value of investment be same for both the cases or vary from June to August & August to December for respective cases.
My sincere thanks to you.
I am in a similar situation where I need to disclose my foreign assets this year currently living out of Delhi and would like to have a consultation about the possibility of you or someone in your team being able to help me file my taxes. What is the best way to contact you?
We can connect on Email ID – canavneetsingh1@gmail.com.
Respected Sir,
What will be the consequences if exempt income remained to be shown in schedule FA of ITR by the resident individual?
Thank you so much for writing on this! It is of great help. Also, your replies in the comments added more value.
I used to invest in Foriegn shares every month since December 2017 and sold altogether on Oct 2021.
Now in Schedule FA I’m entering the details for every month. In some months there was a loss occurred.
And the gross proceeds from sale section does not allow me to enter a negative value. What to enter in this case?
However the total gross redemption was a profit which I have shown in CG
Dear Sir,
one of client has invested in AIF fund in US.
Where to show this investment?.
and In Amount of cost field, Figures should be mentioned in INR or USD?
Awaiting for your reply
Thanks
Hi Navneet, great article and big help.
In context to RNOR status, filling ITR3 form.
Part B-TTI, there is item 14. It says question only applicable to resident status. But i have RNOR status.
i hold some unlisted shares in foreign entity but can i select “No” here as i am RNOR and dont need to fill section FA
You have selected correctly as the item 14 is only applicable in case of ROR status and mandatory to fill Schedule FA. Further, kindly note that if your total income exceeds Rs 50 lakhs, then you have to report these foreign unlisted equity shares in schedule AL (Assets & Liabilities).
Hello Sir, I want to know whether RSU should be shown in FA (since it is not available till the vesting option exercised) and if taken at which cost since no value given. And also what in case of share match plan cost should be taken?
Hi Navneet,
Thanks for the detailed overview about Schedule FA.
I have both ESPP and RSU, and have not sold any till date:
I have few queries:
1) In FY-19-20, I had declared consolidated amount of (ESPP and RSUs) together in table B instead of A3. It is automatically coming in my current FY-20-21 ITR, so the new entry should be only for the new set of shares purchased? or I should declare the previous year holdings as well in section A3?
2) If yes for point (1), then for the previous year holdings (FY 19-20), the corresponding peak value and closing balance should be according to FY 19-20 or FY 20-21?
Thanks in advance.
Regarding point 1, you have to add previous entry also as you have to report peak value of investment & closing balance as on 31.12.2021 in table A3 if the automatic figures are not editable in FY 2021-22.
Regarding point 2, you have to report peak value during the period January 2021 to December 2021 and closing balance as on 31.12.2021 in table A3.
great article. just one query. In the FA , It is asked to report your foreign equity as on 31st december 2021. I bough US equity in february 2022. Do I have to report it or not?
It is a grey area, as per my understanding you have to report foreign holdings as on 31.12.2021. If you have bought equity shares in February 2022 & you received income from that equity shares in the period February to March 2022, then better to report holdings as on 31.03.2022 and corresponding income as well.
12 RSU Sh awarded on 22/05) 21.,FMV 100 USD each. 5 withheld for tax payment, sold for 495(not 500).Balance 7 held by me till date.
No dividend recd.
For calendar yr 2021,per share
Highest price- 120 on 09/11/21
Closing price -110on 31/12/21
What should I fill in A3 of Sch FA
1.Initial value
2.Peak value
3.Closing value
4.Gross amount paid/ credited……..
5.Gross proceeds from sale…….
Thanks
Humbly request for clarifications regarding Table A3, Sch FA
12 Nos RSU Shares of USA Company allotted on 22.05.21,FMV 100USD each
05 Shares withheld to cover taxes and gross proceeds from their sale was 495(not 500) USD
Balance 07 Sh. held by me till date.Nosale
No dividend or any other income from same.
For calendar year 2021,
1.Highest price per share was 120 USD on10/11/21
2.Closing price per Share was 110 USD on 31/12/21
WHAT SHOULD BE FILLED IN TABLE A3:
1.Initial Value- 1200 or 700 or something else
2.Peak Value: 700 OR 840
3.Closing Value : 700 OR 770
4.Total gross amount paid/credited….- Should it be 1200/700(FMV of total 12 Sh awarded/FMV of 07 Sh in my name) OR 0 as no dividend paid to me
5.Total gross proceeds from sale-Should it be 495(sale value of 5 withheld Sh) OR 0 as I have not sold any Share
Lastly, Ownership of RSU/ESPP Shares: Legal owner/beneficial owner/beneficiary
I shall be grateful for the informations
What is the difference between item A3 and B under FA schedule since item B specifies equity as one of the financial interests? So can I declare my foreign equity holdings under item B also?
In my view, you can consider filling details relating to interest in any entity other than equity or debt like preference shares or bond in Item B.
What is the difference between item A3 and B under FA schedule, since item B also specifies equity as one of the financial interests?
In Sch FA, table A3, kindly clarify:
Peak value means the highest value during the whole revant accounting period or something else
Closing balance means the closing price on the last day of relevant accounting petiod Or something else.
Initial value for RSU sh- 48 sh allotted for USD 48000,for tax payment 18 shares were withheld and 30 shares credited to my account of value USD 30000.What should be mentioned as initial value-48000 OR 30000
Thanks in anticipation
Peak Value means highest value during the relevant accounting period.
Closing balance means closing price on the last day of the relevant accounting period.
Initial value should be mentioned as USD 30,000.
While being NRI, Investment was made in BGF India class A2 USD (ISIN: LU0248272758 equity growth mutual fund) through CITIBANK, Singapore during 2006. Now as a resident Indian, redeemed the same during Jan 2022.
In the earlier filings, I have been declaring in ITR2 – TR_FA section D as Nature of Income GROWTH.
For filing ITR -2 (FY 21_22):
1) Can I convert the USD transactions to INR and declare the same under section 112A (Income tax on gains at 10% LTCG) or it has to be reported under different type and at different tax rate?
2) If filing can be done under section 112A, is the transaction eligible for Fair market value (31 Jan 2018) adjustment?
Could you kindly help. Thanks.
Hi,
I have RSUs of company A which have vested over the past few years and I have been reporting these vested shares of company A in schedule FA in the previous years.
During FY2021-22, company A was acquired by company B, and the shares of company A were converted to company B shares and in my trading account, company A shares were deducted and company B shares were credited.
Now in this years returns, how should this transaction be shown? How can I show zero balance of company A shares without showing a sale consideration?
Thank you,
Srikanth
What is peak value of investment during the period and where from we get
Where we get nature of entity
.it will be highly helpful if all boxes in A3 are filled with examples
Peak value of investment is the maximum amount of investment at a particular date. In case of listed security, you have to take market price otherwise you have to take the face value or fair value if available. For nature of entity, you should have the relevant documents which you have received at the time of investment.
Hi Navneet,
RSU’s granted by my company have been vesting for the past few years and I have been reporting these RSU’s in the Foreign Assets schedule and also in the General section under “Whether you have held unlisted equity shares at any time during previous year”. In the FY2021-22 I haven’t sold any RSUs. However, my company was acquired by another company and my previous company shares got converted to new company shares.
Now, how do I show this transaction in the General section and also in the Foreign assets schedule. The goal is to show that I dont hold any shares of my previous company, but without any sale consideration.
Thank you,
Srikanth
As per my view, there is no other option but to show the shares of previous company sold at nominal value and acquired shares of new company in general section. In FA schedule, details of previous company are required as it is asking for holding as on 31.12.2021. If the transaction has been happened before that, then there is no need to show the holdings of previous company.
The details of foreign assets have to be declated in table A3 of the schedule FA.
I have a stack of US stocks (a stack consists of shares of certain number of companies). The stack is rebalanced by the broker quarterly where shares of some companies may be sold by the broker and shares of new companies are bought in their place. Though it does not result on any realizable capital gain since the stack is not sold by me. My query is: Do I have to show individual shares sold/bought or simply the stack?
Yes, you have to show individual purchase and sale although it is not done by but it is done by the broker on your behalf.
Pls guide me on calculation of peak value of investment to be reported in table A3 of schedule of FA.
If I have purchased 20 nos of foreign share each of 100 euros at SBI TT rate of 85 in FY2019-2020 and if current price of share is 120 euro with SBI TT rate of 88, what will be peak value of investment to be reported in FY2020-2021. All shares are held in account.
Thanks in advance.
You have to take peak (maximum) value of Investment in foreign currency during the FY 2020-21 and multiple that value by SBI TT Buy Rate as on that date, that will be your peak value of investment in Indian Rupees.
Hi Navneet, great article. I had a question regarding foreign income.
Other than the filling Schedule FA, I understand that Form 67 is to be filled for claiming tax credit. Will official foreign income tax document be enough for support?
Also does income from India and foreign source have to manually be added under “salary” head and reported?
1. Yes, you should attach atleast TDS payment proof / certificate + Income-tax filing document with Form 67.
2. Yes, you have to manually add figures in salary schedule.
Appreciate the detailed write-up. Have a query regarding “Total Investment at Cost (Rs)” for Financial Interests.
For a person with 401K, the year he turns ROR (say, FY 2019-20), is the cost calculated as on March 31st 2019?
Also, can dividends from this 401k, for which taxes are paid in FY 2019-20, be added to Investment cost for FY 2020-21?
Example: 2019-20, Rs 80,000 is Cost of Investment & dividends received Rs 1,000. So will, Cost of Investment for 2020-21, be recalculated to Rs 81,000 or remain at 80,000?
Sir,
I have opened a trading account in US through ICICI direct in the month of Feb 2021 and acquired shares in US market in Feb 2021. Haven’t sold any shares so far and not received any dividend in Feb and Mar 2021.
The following are my understanding
1) Table A1 – No need to fill-up as it is not a savings bank account.
2) Table A2 – Fill up the details of trading account
3) Table A3 – Fill up the details of the shares acquired
4) Table B – No need to fill up
Please advise.
You have to report only in A3 schedule.
Sir,
I have opened a trading account in US through ICICI direct in the month of Feb 2021 and acquired shares in US market in Feb 2021. Haven’t sold any shares so far and not received any dividend in Feb and Mar 2021.
The following are my understanding
1) Table A1 – No need to fill-up as it is not a savings bank account.
2) Table A2 – Fill up the details of trading account
3) Table A3 – Fill up the details of the shares acquired
4) Table B – No need to fill up
Please advise.
I am US passport holder and now a resident of India, I have earned Salary from US and filed my return in US with Tax, What would be the US Salary implication in my India Return?
I have some US listed shares hain which I got as ESPP every quarter during my stay in US a long time back.
Now, when I declare it under Foreign Assets do I need to list every transaction separately or can I declare entire value together?
I have not made any transaction during the year.
You have to report each transaction separately as date of acquisition will be different for each transaction.
You have to report according to date of acquisition. If all shares are acquired on one day, then you have to report one line item otherwise according to date of acquisition.
Very well explained indeed, thanks for putting the post @Navneet
Had a few questions
1) I have a few foreign stocks gained through equity Award given by my employer which is a multi national, these are US stocks and my employer created an account for me with a US broker to hold these stocks, I can only trade my employers stock through this account. Do I need to fill up this broker account details under A1 of schedule FA? or do I only need to enter the Stock details under A3 of schedule FA?
2) The stock was awarded to me in Dec 2011, but there was a condition that the stocks would be vested to me only if I stay employed till Dec 2015. And as I continued to be employed the stocks were vested to me in Dec 2015. What would be considered as the acquistion date, the date of award (Dec 2011) or the date of vesting (Dec 2015)
3) As it was an Award, should I consider the initial investment as zero
4) I receive some dividend which is less than 20 USD from these foreign stocks? where should I report this dividend in the form? Should it be reported under “Income from other sources” -> “Other Income” -> “Any other income”
5) The Broker deducts withholding tax on the dividend which I believe they deposit to the US Income tax department, should I report this withholding tax under Schedule FSI? As the dividend amount is low, the withholding tax is also not much (around 5 USD) so even if I claimed the tax credit under DTAA, it is a small amount, can I skip filling up the Schedule FSI if I dont wish to claim this credit? or is it better to do it from a paper trail perspective? What would you recommend?
1) You have to only report in A3 schedule the stocks you hold as on date and as per my opinion, DEMAT account opened with US broker doesn’t cover under foreign depository account, therefore you don’t have to report in A1 schedule.
2) Acquisition date should be considered the date of allotment (i.e. date of exercise of ESOP). It should be different from the date of vesting or date of award.
Vesting Date – The date the employee is entitled to buy shares, after conditions agreed upon earlier are fulfilled. This date is also the agreed-on grant date.
Exercise Date – The date on which employee exercises the option.
3) Yes, you have to consider the initial investment as zero.
4) You have to report in schedule D (Detail of any other Capital Asset held (including any beneficial interest) at any time during the relevant accounting period) in Foreign Assets and Income schedule and also in Income from Other Sources schedule to offer the Income to tax.
5) If you want to claim the credit of taxes paid in USA, then only you report in schedule FSI and fill Form 67 consequently to claim the credit, otherwise don’t fill that schedule.
Trust you will find the above in order and hope all your queries are cleared.
@Navneet Thanks very much, your clarification response was very helpful!
I had acquired foreign shares as esops from my employer every year starting 2018 to till date , now under FA section
is it required to declare all 4 year holdings with acquisition date /peak value etc details per year i.e (18,19,20,21 )
or
only those shares acquired in the current year to be reported.Please share your advice
In A3 table of FA schedule, you have to report holding of shares as on date not for a particular year. Therefore, you have to report total of 4 years you are holding of shares as on date.
HI Navneet,
I too fall in the category where I have not declared any RSU, ESPP and dividend from previous years (starting from 2016). So I have a doubt in your reply.
The Table A3 says, “….. in any entity at any time during the relevant accounting period”.
So It means only that financial year right?
Also how can we declare the total dividend amount earned till date ?
Another question.
The dividend is earned for all the shares held at that time of dividend allotment. So in schedule FA, do we need to compute how much dividend each share earns and mention the amount earned by the number of shares declared in each FA row ?
1. I said about the holding of shares and it says holding of shares at any time during the relevant year and it includes all your previous year holdings, if you have not sold and if date of acquisition is different, then you have to report for each date of acquisition.
2. Yes, you have to segregate all the shares acquired according to date of acquisition and like wise segregate dividend received for each acquisition.
I have received both dividends as well as STCG income from Foreign Investments.I have filled ITR schedule FA but in Computation sheet also we have to show under Income from Other sources and Capital Gain as head of income?? Or reporting in Schedule FA is enough?
You have to report the income in specific head of income also in order to calculate the tax apart from reporting in foreign assets and income schedule.
Sir,
In FY 2020-21 I worked in UAE ONLY for February’21 and March’21 and received two months salary. I had no other foreign assets etc. I understand I have to fill only Schedule FSI. But it should also be reported in computation of Total Income , please advise where to report in total income and how, please help.
Do OCI (USA) now living in India have to file FA? And include in it accounts such as ROTH and 401K accounts?
Thanks. Appreciate your answers .
It depends on your residential status in India irrespective of whether you are an OCI holder or not. 401K and ROTH are investment instruments in USA as per my knowledge, then you have report in FA schedule in case your residential statu is ROR.
I used to live and work abroad. I returned to India a few years ago. I did not earn any income abroad after returning to India, but the foreign bank account is still open and has some money (on which I earn tiny amounts of interest, like 3 USD per year).
My understanding is that those would be declared as foreign assets, and since I earned that money while being non-resident in India, I would not be taxed for the same, correct?
No, as your residential status becomes ROR. Therefore, your global income becomes taxable and you have to report the interest in Foreign Assets schedule as well as it will become part of your Total Income in India also.
Hi,
Does all foreign stocks need to be reported in schedule FA along with acquisition date etc, or can we add one line consolidating total holdings? What will acquisition date be in that case?
Yes, all foreign stocks to be reported. If the acquisition date is different, then you have to enter individually in schedule A3. Date of acquisition should be when the shares were allotted to you.
I have started investing via Vested in US equity market. Do I have to disclose stocks that I am holding in Vested even if I am not generating any income? I would really appreciate help on this question.
Yes, you have to report in Item no. A3 (Foreign Equity and Debt).
My primary income source is interest income. I get commissions paid around $500 USD every year from a US based company via Paypal which is transferred in INR to my bank account. My ITR was filed by professionals for previous years who were using ITR-3. This time I’m doing it myself and noticed that they were not filling out schedule FA and were making it seem that I’m getting commissions paid in India and answering “No” to whether I have any source of income outside India. I’m now confused, if I should fill out ITR-3 just like they did or should I add Schedule FA. I don’t want to increase my problems.
In case your residential status is Resident and Ordinary Resident (ROR), then you have to mandatorily fill this schedule in case of you get commission from outside India. Past is past, that has already been done and that cannot be changed. As per my opinion, you should report that amount in this schedule from now onwards, you will be more compliant.
IN the table A3, should the peak value and closing balance determined on the basis of share price or will it be just the investment made? It is difficult to determine the peak value.
It should be on the basis of share price.
Though it is cumbersome to determine peak value of each share but supposing it is done, will the tax implication will be on the basis of peak value or only upon realization or selling of shares?
In context to RNOR status
In my preview screen of Part B-TTI, there is item 19 showing tick on ‘Yes’. And I want to delete tick on ‘Yes’. How can I do this?
[The item 19 reads ” Do you at any time during previous year; (I) hold as beneficial owner…. outside India or (ii) hv signing authority…. outside India or (iii) income…frm outside India](Ensure schedule FA filled up if ans is ‘Yes’)
Hi Prashu, were you able to delete this “Yes”
or did you have to fill this information in section FA at the end ? great help if u can answer please. Thanks
With an RNOR status this AY, if I hold foreign local bank savings and fixed deposits accounts (in say Singapore), is it required to declare in FA schedule in ITR-2 ?
No.
OK great…
What about FSI and TR schedule? Are these required to be filled by RNOR ?
If it is the matter of interest income from foreign bank saving account and FDs, how far it is relevant to fill FSI and TR schedule (by RNOR) in ITR-2?
Schedule FSI and TR is to be reported only if the income is taxable in both countries and you are taking relief for tax paid outside India. In your case, interest income from foreign bank saving account is not taxable in India. Therefore, you are not required to fill both the schedules.
Thank you again.. I have no more doubt.. Your message reply service is commendable..
OK great…
What about FSI and TR schedule? Are these required to be filled by RNOR ?
If it is the matter of interest income from foreign bank saving account and FDs, how far it is relevant to fill FSI and TR schedule (by RNOR) in ITR-2?
Sir,
I hold RNOR status by virtue of 9 years NRI out of preceding 10years..so chosen this option (also I stayed less than 730days in india in preceding 7 years).
At the end of ITR-2 online draft filling at tax computation page, it flash instruction in red to fill FA schedule.. Why is it so?..My undestanding is, NROR doesn’t require to furnish FA schedule .. please advise.
This schedule is only applicable and filled by Resident and Ordinary Resident [ROR]. If it is showing in other than ROR status, then you have to select No.
You have very well explained all the details. I had a query – If the Resident Indian has no Foreign Assets and no foreign income, even then the option gets selected as ‘YES’ in S.No.19 in TTI in ITR 2. So then do we have to fill the Sch FA with ‘NIL’ as the reply.
In that case you have to select NO in point 19 as mentioned above. I don’t have the experience of working in new ITR utility for AY 2021-22. Therefore I cannot comment on that.
Appreciate your views on Item No B Sch FA, whether Income earned (Dividends/Capital Gains) from USA listed equity shares in January 2021-March 2021 need to be offered to tax or not, since the relevant accounting period for USA is January 2020-December 2020.
Yes, you are required to report in Item no. B of Schedule FA and offered to tax income earned from USA listed equity shares during the FY 2020-21 if your residential status for the relevant year is ROR.
Thanks and noted … so the relevant USA accounting period (January 2020-December 2020) mentioned in ITR-2 Instructions not applicable and assessee has to report and offer income to tax based on India FY (April 2020-March 2021).
As per my opinion, Income for FY 2020-21 is to be reported as it said relevant accounting year and you are filing ROI for FY 2020-21 and you should show income for that year only.
Unfortunately confusion on the relevant accounting period stems from the Instructions of ITR-2 published by the Income Tax Department which state:
“For the purpose of this Schedule, the accounting period means the period comprising:‐
(a) from 1st January, 2020 to 31st December, 2020 in respect of foreign assets or
accounts etc. held in those jurisdictions where calendar year is adopted as basis for
the purpose of closing of accounts and tax filings;
(b) from 1st April, 2020 to 31st March, 2021 in respect of foreign assets or accounts etc.
held in those jurisdictions where financial year is adopted as basis for the purpose of
closing of accounts and tax filings; or
(c) that period of 12 months, which ends on any day succeeding 1st April, 2020, in
respect of foreign assets or accounts held in those jurisdictions where any other
period of 12 months is adopted as basis for the purpose of closing of accounts and
tax filings.”
So since USA follows Jan-Dec reporting needs to be January 2020 to December 2020 in Schedule FA while in Schedule OS one presumably has to offer income earned from April 2020-March 2021.
Appreciate if you could read the Instructions for ITR-2 and offer your views.
Thanks for your consideration and patience in addressing this query once more 🙂
@Jatin I have filed the ROIs by taking the view which I already told you above. If you have different view, then it is Ok. Views can be different where there is no clarity. Take your view and file your ROI. Thanks
@Jatin, what did you finally do? Did you report assets for Jan-Dec and income for FY (Apr-Mar)?
Very well explained various Tables of schedule FA.
Clear explanation of each entries.
Good work done.
I need more clarity for listing purchase/sale of US listed shares in FA A3.There is no sale date in the table then on what basis gain will be classified stcg or ltcg .And,where exactly to enter this gain in income from other sources.