Schedule FA: foreign assets, and a window that closes on 31 December 2026

The department page says Schedule FA applies to resident assessees who hold, own, or have a beneficial interest in foreign assets, or who have income from any source outside India.

It names one exception. An individual who is not an Indian citizen, and who was a non-resident in the earlier year when the foreign asset was acquired, does not have to report that asset if no income is derived from it in the current year.

The ₹10 lakh penalty in section 43 is narrower than the schedule page. It applies to a resident who is ordinarily resident, and only where a return was already furnished under section 139(1), 139(4), or 139(5) of the Income-tax Act, 1961, as that section is written. The section's own words are "a resident other than not ordinarily resident".

The same page asks for foreign bank and custodial accounts, equity or debt interest in entities, insurance or annuity contracts, immovable property, capital assets, financial interests, signing authority in foreign accounts, trusts, and any other foreign-sourced income. For each, it asks for country, ownership, values, income derived, and whether that income is offered in the return.

The page starts the structure at Part A (foreign depository and custodial accounts), Part B (financial interest in any entity abroad), and Part C (immovable property located outside India).

Tax already paid on a dividend or on a vesting does not fill this schedule. The schedule is the list of the asset and of income from a source outside India.

The department page says the reporting period for these disclosures is the end of the calendar year. That runs to 31 December. It is not the tax year from 1 April to 31 March.

The return form prints the 31 December date for the year you are filing. Use that date, and report a beneficial interest where the form asks for one. A dividend you already paid tax on is still foreign-source income if the schedule asks for income from a source outside India.

The department page says the schedule applies to ITR-2, ITR-3, ITR-5, ITR-6, and ITR-7. It does not list ITR-1 or ITR-4.

ITR-1 is the form many salaried people open first. ITR-4 is the presumptive form. Neither is on that list, so a foreign account or foreign shares takes you off those two forms. For an individual, the forms on the list are ITR-2 and ITR-3. Which of those two fits the rest of your income is on the ITR filing guide.

Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 says the Assessing Officer may direct a penalty of ten lakh rupees where that resident (other than not ordinarily resident) has filed a return and fails to furnish information, or furnishes inaccurate particulars, about an asset located outside India. The asset includes a financial interest in any entity. It covers an asset held as a beneficial owner or otherwise, or as a beneficiary, and income from a source located outside India, at any time during that previous year.

The proviso on the same page says this section shall not apply to an asset or assets other than immovable property, where the aggregate value does not exceed twenty lakh rupees. The rupee value is worked out in the manner in the Explanation to section 42 of the same Act. The proviso does not say you can leave the asset off the return. It says this penalty section does not apply in that band, and it never applies the band to immovable property.

The department FAQ describes a one-time scheme in Chapter IV (sections 130 to 144) of the Finance Act, 2026. It lets an eligible person declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee.

• ✓ The scheme comes into force on 16 August 2026. The rules say the same date.
• ✓ The last date for a declaration is 31 December 2026. The FAQ says no declaration can be filed after that date.
• ✓ The valuation date is 31 March 2026. Fair market value is computed as on that date.

The FAQ's eligible person is a resident in the relevant previous year under section 6 of the Income-tax Act, 1961, or a non-resident or resident but not ordinarily resident who was resident in the year the undisclosed foreign income relates to, or in the year the asset outside India was acquired. A declaration is for a case where no return was furnished under section 139, or the asset or income was left out of a return furnished before the scheme began, or the asset or income has escaped assessment under section 147.

The FAQ says a valid declaration gives immunity from further tax, penalty, and prosecution under the Black Money Act, 2015, for the income or asset so declared. It also says that declared income, or the amount invested in the declared asset, is not included in total income under the Income-tax Act, 1961 or the Black Money Act.

The scheme does not apply to income or an asset that represents proceeds of crime where proceedings under the Prevention of Money-laundering Act, 2002 have been initiated or are pending. It also does not apply to an assessment year for which a Black Money Act assessment is already complete.

The scheme is about a disclosure that was missed. If you still hold the asset in a later calendar year, the Schedule FA page still applies to that later return.