Navigating Schedule FA and FSI: Reporting Foreign Income and Assets on the Income Tax Portal
As globalization continues to connect economies, many Indian residents are earning income or holding assets abroad. If you’re one of them, you’ll need to navigate the Income Tax Return (ITR) process in India with care, particularly when it comes to Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income). These schedules are critical for ensuring compliance with the Income Tax Act, 1961, and avoiding penalties under the Black Money Act, 2015. In this blog post, I’ll break down what these schedules are, provide real-world examples, and explain how to report them on the Income Tax e-Filing portal. Plus, I’ll touch on the kind of notices you might receive if you miss the mark.
Page Contents
What Are Schedule FA and Schedule FSI?
Schedule FA (Foreign Assets and Income from Any Source Outside India) is a section in ITR-2 and ITR-3 forms where Indian residents (and ordinarily residents) must disclose details of foreign assets and income, whether taxable in India or not. This includes bank accounts, stocks, properties, and more, held during the calendar year (January 1 to December 31). The goal? To enhance transparency and curb tax evasion through offshore routes.
Schedule FSI (Foreign Source Income) is used to report income earned outside India by Indian residents, such as dividends, interest, or capital gains. This income must also be reflected under the relevant income head (e.g., salary, capital gains) in the ITR. If you’ve paid taxes abroad, you can claim relief under Double Taxation Avoidance Agreements (DTAA) via Schedule TR.
Non-residents and Not Ordinarily Residents (NOR) are generally exempt from reporting in Schedule FA, and they only need to report in Schedule FSI if the foreign income is taxable in India.
Real-World Examples of Schedule FA and FSI Reporting
Let’s dive into some practical scenarios to make this clearer.
Example 1: Dividend Income from U.S. Stocks
Scenario: Priya, an Indian resident, holds shares in a U.S. company purchased in August 2023 for $1,000 (approx. ₹83,000 at the telegraphic transfer buying rate). In 2024, she earns $100 in dividends, with $10 withheld as tax in the U.S. She needs to file her ITR for FY 2024-25 (AY 2025-26).
Schedule FSI:
- Priya reports the $100 dividend (converted to ₹8,300 using the TTBR on the date the income was due) under “Income from Other Sources.”
- She mentions the U.S. as the source country (ISD code: +1), her U.S. Taxpayer Identification Number (TIN), and the $10 tax paid abroad.
- She claims tax relief under the India-U.S. DTAA by filing Form 67 alongside her ITR-2.
Schedule FA:
- In Table A3 (Foreign Equity and Debt Interest), Priya reports the U.S. shares held as of December 31, 2024, valued at ₹83,000 (converted using the TTBR).
- She specifies that she is the beneficial owner and includes details like the company name, acquisition date, and value.
On the e-Filing Portal:
- Priya logs into www.incometax.gov.in, navigates to e-File > Income Tax Returns > File Income Tax Return, and selects ITR-2.
- She fills Schedule FSI with the dividend details and Schedule FA with the stock details, ensuring all values are in INR.
- After validation, she e-verifies the return and submits Form 67 for tax credit.
Example 2: Rental Income from a U.K. Property
Scenario: Anil, a resident Indian, owns a rental property in the U.K. purchased in 2020 for £50,000 (approx. ₹50 lakh). In 2024, he earns £5,000 in rent, paying £1,000 in U.K. taxes. He files ITR-2 for FY 2024-25.
Schedule FSI:
- Anil converts the £5,000 rent (approx. ₹5.25 lakh using TTBR) and reports it under “Income from House Property.”
- He includes the U.K. country code (+44), his U.K. TIN, and the £1,000 tax paid, claiming relief under the India-U.K. DTAA.
Schedule FA:
- In Table C (Immovable Property), Anil reports the U.K. property, its address, acquisition cost (£50,000 converted to ₹50 lakh), and his status as the legal owner.
On the e-Filing Portal:
- Anil logs in, selects ITR-2, and fills in the rental income under Schedule HP and foreign income details in Schedule FSI.
- In Schedule FA, he provides property details. He ensures consistency between schedules and submits Form 67 for tax credit.
- After previewing and validating, he e-verifies the return.
Example 3: Foreign Bank Account with Interest
Scenario: Meena, an Indian resident, maintains a savings account in Singapore with a peak balance of SGD 10,000 in 2024. She earns SGD 200 in interest, with SGD 20 withheld as tax.
Schedule FSI:
- Meena reports the SGD 200 interest (approx. ₹12,000 in INR) under “Income from Other Sources.”
- She includes Singapore’s ISD code (+65), her TIN, and the SGD 20 tax paid, claiming DTAA relief.
Schedule FA:
- In Table A1 (Foreign Depository Accounts), Meena reports the Singapore bank account, its peak balance (SGD 10,000, converted to INR), and her status as the account holder.
On the e-Filing Portal:
- Meena selects ITR-2, enters interest income in Schedule FSI, and bank account details in Schedule FA.
- She submits Form 67 for tax credit, validates, and e-verifies the return.
Common Mistakes and Notices from the Income Tax Department
Failing to report foreign assets or income accurately can trigger notices from the Income Tax Department, especially due to global information-sharing agreements like CRS and FATCA. Here are some common issues and examples of notices:
- Non-Disclosure of Foreign Assets:
- Scenario: Raj, an Indian resident, holds U.S. mutual funds but omits them from Schedule FA, thinking they’re not taxable in India.
- Notice: He receives an email from orm@cpc.incometax.gov.in citing non-compliance with Schedule FA reporting, referencing the Black Money Act, 2015. The notice demands clarification and warns of a ₹10 lakh penalty per year of non-disclosure.
- Action: Raj revises his ITR-2, includes the mutual funds in Schedule FA, and responds to the notice via the e-Filing portal.
- Inconsistent FSI and TR Reporting:
- Scenario: Sneha reports foreign dividend income in Schedule FSI but forgets to file Form 67 for tax credit or align it with Schedule TR.
- Notice: She gets a notice for discrepancies between Schedules FSI and TR, requesting Form 67 submission.
- Action: Sneha uploads Form 67 and revises her ITR to ensure consistency.
- Incorrect Currency Conversion:
- Scenario: Vikram uses an outdated exchange rate to convert his foreign income, leading to underreporting.
- Notice: The department flags the mismatch through automated systems and sends a notice for rectification.
- Action: Vikram corrects the conversion using the TTBR from the State Bank of India and files a revised return.
Sample Notice Email:
Subject: Notice for Non-Compliance with Schedule FA/FSI – AY 2025-26
Dear [Taxpayer Name],
Our records indicate that you have not reported foreign assets/income in Schedule FA/FSI of your ITR for AY 2025-26, despite information received via CRS/FATCA. This is a violation of the Income Tax Act, 1961, and may attract penalties under the Black Money Act, 2015.
Please revise your ITR within 30 days or provide clarification via the e-Filing portal (www.incometax.gov.in) under “Pending Actions.” Quote reference number [XXXXX].
Regards,
Income Tax Department
[orm@cpc.incometax.gov.in]
Step-by-Step Guide to Filing on the e-Filing Portal
- Log In: Visit www.incometax.gov.in, log in with your PAN and password, and ensure your PAN is linked with Aadhaar.
- Select ITR-2: Navigate to e-File > Income Tax Returns > File Income Tax Return and choose ITR-2 for FY 2024-25 (AY 2025-26).
- Fill Schedules:
- Schedule FSI: Enter foreign income details (e.g., dividends, rent), country code, TIN/passport number, tax paid abroad, and DTAA article number.
- Schedule FA: Report foreign assets like stocks, properties, or bank accounts, specifying ownership type and value in INR.
- Form 67: If claiming tax relief, upload Form 67 for foreign tax credit.
- Validate and Submit: Preview your return, correct errors, and proceed to e-Verify using Aadhaar OTP, net banking, or DSC.
- Acknowledgment: Upon successful e-Verification, receive a confirmation email and SMS with the Transaction ID and Acknowledgment Number.
Tips to Avoid Notices
- Determine Residential Status: Confirm if you’re a resident, non-resident, or NOR, as this impacts your reporting obligations.
- Use TTBR: Convert foreign income and asset values to INR using the State Bank of India’s telegraphic transfer buying rate.
- File Form 67: Always submit Form 67 for foreign tax credits to avoid rejection.
- Double-Check Schedules: Ensure consistency between Schedules FSI, TR, and FA to avoid discrepancies.
- Stay Updated: Follow advisories from the Income Tax Department.
Conclusion
Reporting foreign income and assets in Schedules FA and FSI is not just a legal requirement for Indian residents—it’s a step toward global tax transparency. By understanding these schedules and using real-world examples like Priya’s U.S. stocks, Anil’s U.K. property, or Meena’s Singapore bank account, you can navigate the e-Filing portal with confidence. Avoid common pitfalls like non-disclosure or incorrect conversions to steer clear of notices from the Income Tax Department.
Got questions about ITR filing or foreign income? Drop them in the comments, and let’s make tax season stress-free!
Author Bio
Dear TaxGuru,
I have a question about the duration for reporting in FSI. I searched extensively but could not find a clear answer.
Should we consider the calendar year or financial year for reporting the income in FSI?
It is clear that it is calendar year for FA but for FSI. It’s fuzzy.
You report foreign source income based on the Financial Year (FY) (April 1 to March 31) for the relevant Assessment Year (AY). This differs from Schedule FA (Foreign Assets), which uses the Calendar Year (CY) (January 1 to December 31) for reporting foreign assets held during that period.
The distinction between CY for FA and FY for FSI is not always clearly highlighted in tax guides, leading to ambiguity. The ITR forms themselves don’t explicitly label the period in FSI (unlike FA, which specifies CY), but the context of ITR filing (tied to FY) and income tax rules confirm FY for FSI.
Additionally, foreign income may be earned in jurisdictions with different tax years (e.g., US uses CY), which complicates conversion and reporting, but India’s tax system anchors on FY.
Key Difference: FA focuses on asset ownership (a snapshot of holdings during CY), while FSI focuses on income flow (earned/received during FY).
Hello sir,
My question is for filing ITR-6 for the private limited company. We work with one US client. They transfer payment in USD to our company’s HDFC bank account. Should we need to mention this income under FSI. Please clarify sir. Thanks for your help.
Yes, the income received from your US client for services rendered should be reported under Schedule FSI (Foreign Source Income) in ITR-6, as it qualifies as income accruing or arising from outside India.
Amount: The gross income in INR (convert USD receipts using the telegraphic transfer buying rate of the State Bank of India on the last day of the relevant month, or as per RBI guidelines).
Thank you for the reply sir. One more doubt, should I also give this revenue details in Schedule FD? Also, I made international payments from HDFC bank(INR) but the invoices are in USD to buying software, domains etc., Should I also include this expenses in Schedule FD? Thanks again for the help sir.
Yes, you should include these expenses in Schedule FD if they qualify as reportable foreign exchange transactions. Your scenario—making payments from an HDFC Bank account in INR for USD-invoiced purchases of software, domains, etc.—typically involves the bank converting INR to USD and remitting abroad. This counts as an outward remittance under LRS (up to USD 250,000 per financial year for permissible current account transactions like buying software or domains).
What to report:
Purpose code: Select from the dropdown (e.g., S0008 for software purchases, S0011 for other services, or the most relevant LRS code).
Amount: The USD invoice value (converted to INR using the bank’s exchange rate on the transaction date or the TT buying rate for ITR reporting).
Date of remittance, recipient’s details (if available, like the foreign vendor’s name/country), and your PAN.
Aggregate all such transactions in the financial year.
Thank you very much for your help sir. Have a great day!
I apologize for not asking my question clearly.
Isn’t the amount I receive from the US client considered revenue? Does adding this revenue as income in Schedule FSI make it adding same revenue two times? I try to explain my situation below:
My company is an Indian private limited company providing IT services to clients in the USA.
The amounts received from these clients are recorded as revenue in our books of accounts. For ITR-6 filing, we reported as business income under Schedule BP.
However, I am unclear whether I also need to disclose this on Schedule FSI.
Specifically, if no tax has been paid overseas (i.e., no withholding in the USA), should Schedule FSI be left blank? Or is it still required to show export revenue there, even without claiming any foreign tax credit?
I want to make sure the income is not counted twice (once in Schedule BP and again in Schedule FSI). Can you please clarify the correct treatment?
Thank you for your help.
1. Is Revenue from US Clients “Foreign Source Income”?
Yes, revenue from export of IT services to foreign clients (like in the US) is considered foreign source income for an Indian resident company.
This revenue is correctly recorded as business income in your books and reported in Schedule BP (Profit and Loss) of ITR-6, where you compute the total business profit after deductions/expenses.
2. Do You Need to Report This in Schedule FSI?
Yes, you must disclose it in Schedule FSI (Details of Income from Outside India and Tax Relief), even if no tax was withheld/paid in the US.
Schedule FSI is a mandatory disclosure schedule for all resident taxpayers (including companies filing ITR-6) with any foreign source income, regardless of whether foreign tax credit (FTC) is claimed. It’s not optional—failure to report can attract penalties under the Black Money (Undisclosed Foreign Income and Assets)
Why even without foreign tax? FSI tracks the composition of your global income for transparency and potential DTAA audits. You simply enter “0” in the column for tax paid abroad. Schedule TR (Tax Relief) would remain blank or minimal if no FTC is claimed (via Form 67).
3. Does This Cause Double-Counting (Schedule BP + FSI)?
No, it does not add the revenue twice to your total income.
Schedule FSI is purely a disclosure and breakup tool—it does not flow into the total income computation. The amounts in FSI are not added again; they’re just mirrored/referenced for verification
Welcome
Sumit Agarwal
Agarwal Tax Consultancy
+91-9064011816
agarwaltaxconsultancy99@gmail.com
Hi,
I was working in UAE for 183 days (FY2024-2025) and earned the salary. I opened the NRE account in India for sending money to my family.
Do I need to declare the amount deposited in NRE account in Schedule FSI of ITR2?
Can any one guide me on this.
Best Regards
Sukhada
Mobile: +91 8788955206
no, not needed to report in schedule FSI.
if you want more clarification on this call me at 9064011816
I filed my ITR using clear tax site. I hold One Foreign ETF. The ETF’s instead of getting updated one time the entry got posted 4 times (duplicate in Schedule FA (Value is around 50 K INR). Even after revised ITR (second time) clear tax says the issue is not from their end. Should I ignore the duplicate entries or raise a grievance or wait till the ITR is processed and then file a revised ITR
You could wait for the ITR to be processed. If the CPC flags the issue, you can file another revised ITR to correct it.
How to report youtube ad revenue share received from Google USA in USD to an Indian bank account. Total payout is 1053 USD with USD 5 witholding but form 1042 not received yet.
1-is FSI required?
2- Treating YT income as BP income using presumptive calculation so what to show in FSI- Gross receipt or just Presumed income basis 44ad/ada
3- Dont want to clain FTC as have no proof (1042 not received yet. can we mention tax deducted as 0 and skip filing form 67/TR)
1.)Yes, reporting in Schedule FSI (Foreign Source Income) is required. As an Indian resident earning income from a foreign source (YouTube ad revenue from Google USA), you must disclose the details of this income in Schedule FSI of your Income Tax Return (ITR), irrespective of whether you claim any tax relief or not. This includes the country code (e.g., US), the amount of income in INR (converted using the telegraphic transfer buying rate), and the tax paid abroad (which can be mentioned as 0 if not claiming relief).
2.)If treating the YouTube income as business or profession (BP) income under presumptive taxation (Sections 44AD or 44ADA), report the presumed income (not the gross receipts) in Schedule FSI under the “Profits and Gains of Business or Profession” head. The presumed income is the deemed taxable profit (e.g., 50% of gross receipts under 44ADA for professionals, or 6-8% under 44AD for business, depending on payment mode). Since the entire income is from a foreign source, the full presumed amount qualifies as foreign source income for FSI reporting.
3.)Yes, you can mention the tax deducted abroad as 0 in Schedule FSI and skip filing Form 67 and Schedule TR (Tax Relief) if you do not wish to claim Foreign Tax Credit (FTC). By putting tax paid as 0, you avoid claiming relief under DTAA (e.g., Sections 90/91) and simply pay full Indian tax on the income. This is compliant if you’re okay forgoing the credit for the $5 withheld.
Very helpful and crisp article! Thanks.
Always welcome! keep following for such articles.
How and where in ITR-2 does one include salary received from France based NGO for services provided in France and Sudan as resident indian and the income has not been taxed outside
Schedule S (Salary): Report gross salary (converted to INR using TTBR of the last day of the month received) under “Details of Income from Salary.” Claim Section 16 deductions (e.g., ₹75,000 standard deduction).
Schedule FSI : Report salary under “Salaries” with country-wise details (France: FR, Sudan: SD). Mention zero tax paid abroad.
Schedule FA : If salary was deposited in foreign bank accounts, report details (country, account number, peak balance in INR)
Tax Liability: Taxed as per Indian tax slabs (old or new regime). No foreign tax credit since no taxes were paid abroad.