Question 1

Who must file Schedule FA in their ITR?

Accepted Answer

Resident and Ordinarily Resident (ROR) individuals must file Schedule FA if they hold any foreign assets at any time during the financial year, including foreign bank accounts, foreign equity shares, immovable property abroad, or interest in foreign trusts. NRIs and RNOR are exempt.

Question 2

What is the penalty for not disclosing foreign assets?

Accepted Answer

The Black Money Act prescribes severe penalties: Rs. 10 lakh penalty per year for non-disclosure, prosecution up to 7 years imprisonment for willful evasion, and 120% tax plus penalty on undisclosed foreign assets and income.

Question 3

What is the difference between Schedule FA and Schedule FSI?

Accepted Answer

Schedule FA (Foreign Assets) is for disclosing foreign assets like bank accounts, property, and investments. Schedule FSI (Foreign Source Income) is for reporting income from foreign sources like foreign salary, interest, dividends, or rental income from foreign property.

Question 4

Do I need to report foreign assets with zero value?

Accepted Answer

Yes, even if the foreign asset has zero balance or zero value, you must still disclose it in Schedule FA. The disclosure requirement is based on holding the asset, not its value. Report the peak balance during the year for bank accounts.

Question 5

Is my 401k or foreign retirement account reportable?

Accepted Answer

Yes, foreign retirement accounts like 401k, IRA, or UK pension must be reported in Schedule FA. However, under Section 89A, you can file Form 10-EE to defer taxation on accruals until withdrawal. The asset must still be disclosed in Schedule FA.

Foreign Asset Reporting (Schedule FA/FSI)

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