Schedule FA: The Foreign-Asset Disclosure That Carries a ₹10 Lakh Penalty

This is the disclosure that quietly catches honest, well-paid professionals — and the penalty for missing it is brutal. If you hold foreign assets and qualify as a Resident and Ordinarily Resident, you must report them in Schedule FA of your tax return, even if you earned nothing from them and even if you already paid tax abroad.

Who must file Schedule FA

Only a Resident and Ordinarily Resident (ROR) has to disclose foreign assets. NRIs and RNORs do not. The moment a returning NRI becomes ROR, every foreign asset comes into the net.

What counts as a foreign asset

• Foreign bank accounts (and any signing authority you hold).
• Foreign shares, RSUs and ESOPs — including unsold ones.
• Custodial and brokerage accounts, mutual funds, bonds.
• Foreign immovable property and any beneficial interest.

Crucially, disclosure is required regardless of income— holding the asset is enough. Reporting follows the relevant calendar year, not the Indian financial year.

The penalty: Black Money Act, ₹10 lakh a year

Non-disclosure of a foreign asset can attract a penalty of ₹10 lakh for every yearit goes unreported, under sections 42 and 43 of the Black Money Act — entirely separate from the tax itself. Prosecution under sections 49 and 50 is a separate consequence again.

One relief applies to both. Neither the penalty nor the prosecution sections apply where the aggregate value of the assets, other than immovable property, does not exceed ₹20 lakh. That threshold has applied to the penalty sections since October 2024, and was extended to the prosecution sections by the Finance Act, 2026 with retrospective effect from the same date. Immovable property gets no relief at all.

Keep the two figures distinct: ₹10 lakh is the penalty amount, ₹20 lakh is the value threshold below which it does not bite.

If a foreign asset has already gone unreported for past years, there is now a one-time route to settle it — see our guide to the FAST-DS 2026 disclosure scheme, which closes on 31 December 2026.

A real example

Operative R, a Baner-based tech lead, has US RSUs worth ₹30 lakhsitting in a foreign brokerage — unsold, generating no Indian income. He assumes “no income, nothing to report.” Wrong: as an ROR he must list them in Schedule FA. Three years of silence could mean ₹30 lakh of penalties on assets that were fully legitimate. A single correct schedule each year avoids all of it.