Tax Season Guide · FY 2025–26 / AY 2026–27
The Global Investing Tax Filing Checklist
Everything a resident Indian investing through IBKR, Schwab, Fidelity, or holding US stocks, UCITS ETFs, RSUs, ESPPs or foreign dividends needs to file correctly this season — Schedule FA, Foreign Tax Credit, LRS TCS, and the exact ITR schedules that apply to you.
✓ 5-minute filing wizard
✓ Covers 45+ real-world tax situations
✓ Updated for AY 2026-27
Tax Filing Assistant
Answer 5 quick questions, get your filing plan
Two minutes. Nothing leaves your browser. You'll get your recommended ITR form, exactly which schedules apply to you, and a tailored document checklist.
Step 1 of 5
1
2
3
4
5
Your results
Your personalised filing plan
Based on your answers — bookmark this page or download your checklist before you go.
🟢
Estimated complexity
Simple
Recommended ITR Form
—
Schedule FA required?
—
Schedule FSI required?
—
Form 67 required?
—
Capital gains reporting?
—
LRS reconciliation?
—
Form 26AS / AIS reconciliation?
Always required
Your document checklist
0 of 0 completeNothing you enter here leaves your browser. "Email My Checklist" opens your own mail app with the checklist pre-filled — no server, no data collection.
The Complete Tax Guide
For full detail behind every line in your checklist above — deadlines, Schedule FA, RSUs/ESPPs, LRS, Foreign Tax Credit, and 47+ FAQs.
Getting Started
Foreign Assets
Employee Equity
Foreign Tax Credit
Who should use this guide
This guide is written for one specific reader: a resident Indian (Resident and Ordinarily Resident, or "ROR") who has any exposure to money, assets, or income outside India during FY 2025–26. That includes far more people than most assume.
You should read this closely if you fall into any of these buckets:
- You hold or trade US stocks, ETFs, or options through IBKR, Schwab, Fidelity, Vested, INDmoney, or a similar broker.
- You hold UCITS ETFs (Ireland/Luxembourg-domiciled) through an international broker or a GIFT City IFSC platform.
- You've received RSUs, ESPP shares, or stock options from a foreign (usually US) parent or employer.
- You've remitted money abroad under the Liberalised Remittance Scheme (LRS) for investment, education, travel, or property.
- You've earned foreign dividends, foreign bank interest, or rental income from an overseas property.
- You have a dormant foreign bank account, brokerage wallet balance, or signing authority on an account abroad — even if the balance is small or you never traded.
- You're a returning NRI who became a resident during FY 2025–26 and now needs to disclose assets accumulated while abroad.
The one rule that surprises people most: foreign asset disclosure under Schedule FA has no minimum threshold and is not linked to your total income. Even if your total income is below the basic exemption limit, holding a single foreign asset at any point in the year obligates you to file a return and disclose it.
The FY 2025–26 tax timeline
Global investors deal with two overlapping calendars — the Indian financial year (April–March) for tax computation, and the calendar year (January–December) for Schedule FA disclosure. Missing this distinction is the single most common filing error in this guide.
| Event | Applies to | Current statutory due date |
|---|---|---|
| ITR-1 / ITR-2 filing | Salary, capital gains, foreign assets, no business income | 31 Jul 2026 |
| ITR-3 filing (non-audit) | Business/professional income, F&O traders — ITR-4 not applicable once foreign assets exist | 31 Aug 2026 |
| ITR filing — audit cases | Accounts requiring tax audit u/s 44AB | 31 Oct 2026 |
| Tax audit report (Form 3CD) | Audit cases | 30 Sep 2026 |
| Transfer pricing report | International/specified domestic transactions | 30 Nov 2026 |
| Form 67 (Foreign Tax Credit) | Anyone claiming FTC on foreign tax paid | Before filing ITR; in any case before end of AY — 31 Mar 2027 |
| Belated return | Missed the original deadline | 31 Dec 2026 |
| Revised return | Correcting an already-filed return | 31 Mar 2027 |
| Updated return (ITR-U) | Voluntary disclosure of missed income | 31 Mar 2031 (48 months from AY end) |
| Schedule FA reporting period | Foreign asset holdings (calendar year, not FY) | 1 Jan 2025 – 31 Dec 2025 |
| FAST-DS 2026 amnesty window* | Undisclosed foreign assets from earlier years | Six months from Gazette notification — commencement date not yet notified. Subject to Government notification. |
*The Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS), 2026 is enacted law (Section 130 of the Income-tax framework, via the Finance Bill 2026) — see Section 4 below. As of this guide's last-updated date, the Central Government had not yet issued the Gazette notification that starts the six-month window; declarations filed before that notification are invalid. Check the e-filing portal or CBDT press releases for the commencement date before acting.
Why the Schedule FA calendar trips people up: most countries (including the US) report account and holding values as of 31 December, not 31 March. So when you file your ITR for AY 2026-27 in July 2026, the "foreign assets" you disclose are the ones you held between 1 Jan 2025 and 31 Dec 2025 — a 9-month look-back from your April–March income figures. It's easy to disclose the wrong period entirely.
Documents checklist
Gather these before you sit down to file. Foreign broker statements in particular take time to request or format correctly — start early.
| Category | What to collect | Where it's used |
|---|---|---|
| Domestic income | Form 16, Form 16A, Form 26AS, AIS/TIS | Salary, TDS reconciliation |
| Foreign broker | Annual account statement, trade confirmations, 1042-S (US dividend withholding) | Schedule FA, FSI, capital gains |
| RSU/ESPP | Vesting schedule, Form 16 perquisite breakup, employer equity portal export | Salary schedule, Schedule FA, capital gains |
| LRS remittances | Form A2, Form 27D (TCS certificate), bank remittance advice | Schedule 26AS reconciliation, LRS threshold tracking |
| Foreign tax paid | Foreign tax certificate/statement, proof of payment, Form 67 draft | Foreign Tax Credit claim |
| Foreign bank accounts | Year-end and peak balances, account opening date, interest certificates | Schedule FA, Schedule FSI |
| Property abroad (if any) | Purchase deed, valuation, rental agreements | Schedule FA, house property income |
| Prior year records | Last year's ITR-V, capital loss carry-forward schedule | Loss set-off, continuity checks |
Foreign assets & Schedule FA
Schedule FA, mandated under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is the single highest-penalty, lowest-awareness section of the entire ITR for global investors.
At a glance: do I need to file Schedule FA?
Are you Resident & Ordinarily Resident (ROR) for FY 2025-26?
↓ Yes → No: Schedule FA does not apply to you
Do you hold any foreign asset — stocks, ETFs, accounts, RSUs, property — at any point 1 Jan–31 Dec 2025?
↓ Yes → No: nothing to disclose this year
Schedule FA is required, regardless of the asset's value
| Residential status | Schedule FA required? | Notes |
|---|---|---|
| Resident and Ordinarily Resident (ROR) | Yes | Mandatory for any foreign asset, however small |
| Resident but Not Ordinarily Resident (RNOR) | No | Applies typically to recently-returned NRIs for 2–3 years |
| Non-Resident (NR) | No | Only Indian-source income is taxable/reportable |
| Asset type | Reported even if no income earned? |
|---|---|
| Foreign bank accounts (savings, checking, brokerage cash/wallet balance) | Yes |
| Foreign equity shares, ETFs, mutual funds | Yes |
| Vested and unvested RSUs/ESOPs of a foreign company | Yes (vested; unvested reporting is debated — see FAQs) |
| Foreign retirement accounts (401(k), IRA, SIPP, RRSP) | Yes |
| Immovable property abroad | Yes |
| Signing authority on any account abroad (even if not the beneficial owner) | Yes |
| Life insurance or annuity contracts with a foreign insurer | Yes |
The reporting period is a calendar year, not a financial year
For your AY 2026-27 return, Schedule FA covers assets held at any point between 1 January 2025 and 31 December 2025. This is because most foreign jurisdictions report year-end values as of 31 December. Values are converted to INR using the SBI Telegraphic Transfer Buying Rate (TTBR) on the last day of the calendar year (or the relevant transaction date, for FSI/capital gains entries).
Penalty exposure: ⚖ Discretionary vs mandatory is disputed Under Section 42 of the Black Money Act, failing to disclose foreign assets in Schedule FA attracts a penalty of ₹10 lakh — this is a per return, per assessment year penalty, not multiplied by the number of individual assets you hold. Section 43 imposes a separate ₹10 lakh penalty for a return where assets were disclosed but with materially inaccurate particulars. Whether the Assessing Officer must impose this penalty ("shall") or has discretion ("may") is genuinely disputed — some ITAT benches have treated it as mandatory, others as discretionary depending on facts and intent. Either way, the exposure applies whether the asset generated income or not, and a small dormant account carries the same statutory exposure as a large portfolio.
The ₹20 lakh relief and the 2026 amnesty scheme
Two distinct reliefs apply here, at two different levels of certainty — it's worth keeping them separate:
- The ₹20 lakh penalty relief ✓ Settled law since 1 Oct 2024 Finance (No. 2) Act, 2024 amended the proviso to BMA Sections 42 and 43: non-disclosure of foreign assets other than immovable property, with an aggregate value not exceeding ₹20 lakh at any point in the year, does not attract the ₹10 lakh penalty. This is enacted, in-force law, not a proposal. Separately, CBDT has instructed (via an amended prosecution circular) that Section 49/50 prosecution also won't be initiated at the same ₹20 lakh threshold — that part currently rests on a CBDT administrative instruction rather than the statute itself, though the Finance Bill 2026 proposes to write it directly into Sections 49/50, retrospectively from 1 October 2024. Either way, the obligation to disclose the asset itself is unchanged — this only removes the penalty/prosecution exposure for a genuine, small-value miss, and the government has been explicit that this is not an amnesty.
- FAST-DS 2026 ⏳ Enacted, but window not yet open The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 is now enacted law (it appears as its own section within the income-tax framework introduced by the Finance Bill 2026), letting taxpayers regularise past Schedule FA lapses. Category 1 covers aggregate undisclosed foreign income/assets up to ₹1 crore (valued as on 31 March 2026) at a reduced 60% total levy (30% tax + 30% additional charge, versus the standard 120% under the Black Money Act). Category 2 is a flat ₹1 lakh fee, covering aggregate asset value up to ₹5 crore, for cases where the underlying income was already taxed in India (or the asset was acquired while NRI) but the asset itself was never disclosed on Schedule FA — the common ESOP/RSU scenario. Critically: as of this guide's last-updated date, the Central Government had not yet issued the Gazette notification that starts the six-month window. Declarations filed before that notification are explicitly invalid. There is no confirmed closing date yet — treat any specific date you see elsewhere as unconfirmed until CBDT notifies it.
If you've held foreign RSUs or a foreign brokerage account for years and never filed Schedule FA, FAST-DS Category 2 (once the window opens) is built specifically for people who paid the right tax but missed the disclosure form — a flat ₹1 lakh fee for full immunity is a very different proposition from open-ended Black Money Act exposure. Don't file a declaration before the official commencement notification (it will be invalid), but do get a CA with Black Money Act experience lined up now so you can act the moment the window opens.
Foreign income & Schedule FSI
Schedule FSI (Foreign Source Income) is where you report income actually earned from foreign assets — dividends, interest, rent, and capital gains — separately from the disclosure-only Schedule FA.
| Income type | Taxed as | Rate | Foreign withholding |
|---|---|---|---|
| US stock dividends | Income from other sources | Slab rate | 25% (US, per DTAA) |
| Foreign bank interest | Income from other sources | Slab rate | Varies by country |
| Foreign stocks — LTCG (held >24 months) | Capital gains (treated as unlisted securities) | 12.5%, no indexation, no ₹1.25L exemption | None typically |
| Foreign stocks — STCG (held ≤24 months) | Capital gains | Slab rate | None typically |
| India-listed foreign ETFs — LTCG (>12 months) | Capital gains | 12.5% | N/A |
| India-listed foreign ETFs — STCG (≤12 months) | Capital gains | Slab rate | N/A |
| Foreign rental income | Income from house property | Slab rate, after standard deduction | Varies by country |
US stocks are "unlisted securities" under Indian law. Because they aren't listed on a recognised Indian stock exchange, direct holdings of Apple, Microsoft, Tesla, etc. get the 24-month long-term threshold and the flat 12.5% rate that applies to unlisted shares — not the more favourable 12-month/₹1.25 lakh exemption regime that applies to Indian-listed equity under Section 112A. India-domiciled feeder funds and ETFs that themselves hold foreign stocks (e.g. Nasdaq-100 India ETFs) are taxed under the listed-securities rules instead, since the fund unit itself is listed in India.
Worked example — US dividend, taxed and credited (illustrative only)
Dividend received$100 → ₹8,700 (at an illustrative ₹87/$1)
US withholding tax (25%)−$25 → −₹2,175
Added to Indian income, taxed at slab (illustrative 30% + 4% cess)₹2,714
Foreign Tax Credit claimed via Form 67 (lower of foreign tax paid or Indian tax on the same income)−₹2,175
Net additional tax payable in India₹539
Illustrative only — your actual slab rate, cess, and the SBI TTBR on your specific transaction date will change every number here. This shows the mechanism, not your figure.
Currency conversion
Convert every foreign-currency figure to INR using the SBI Telegraphic Transfer Buying Rate (TTBR) applicable on the last day of the month preceding the transaction (for capital gains) or the last day of the calendar year (for Schedule FA balances). Using an approximate or spot rate is one of the most common reasons FTC and capital gains figures don't reconcile with broker 1099/consolidated statements during scrutiny.
Employee equity: RSUs & ESPPs
Foreign employee equity is taxed twice in India — once as salary, once as capital gains — and each event has its own reporting trail. This is the section with the most moving parts for tech professionals at MNCs.
The RSU lifecycle, in one picture
GrantNot taxed
→
VestFMV becomes cost basis
→
Salary TaxPerquisite taxed at slab
→
HoldDisclosed in Schedule FA
→
SellTriggers realisation
→
Capital Gains12.5% LTCG / slab STCG
| Event | Taxed as | Value used | Where reported |
|---|---|---|---|
| Vesting | Salary perquisite (Section 17(2)) | FMV of shares on vesting date | Schedule Salary; usually already in Form 16 if run through Indian payroll |
| Holding (year-end) | Disclosure only, no tax | Year-end/calendar-year-end value | Schedule FA |
| Sale | Capital gains | Sale price minus FMV at vesting (cost basis) | Schedule CG, Schedule FSI |
| Dividend (if any, while held) | Income from other sources | Gross dividend, less foreign withholding credit | Schedule FSI, Form 67 |
| Event | Taxed as | Notes |
|---|---|---|
| Purchase (discount received) | Salary perquisite | Perquisite = FMV on purchase date minus price actually paid |
| Sale | Capital gains | Cost basis = FMV on purchase date (the price you actually paid is not the cost basis for Indian tax purposes) |
| Qualifying disposition (US Section 423 concept) | Not directly relevant to Indian tax | India taxes the perquisite + capital gains regardless of US holding-period qualification |
The cost-basis trap: many people use the price they paid for ESPP shares (often at a 10–15% discount) as their cost basis when computing capital gains — understating gains and creating an under-reporting exposure. The correct Indian cost basis is the fair market value on the purchase/vesting date, which is the same figure already taxed as salary perquisite. Using the discounted price double-counts part of your gain as if it were still untaxed.
If your employer runs vesting through Indian payroll, the perquisite value typically already appears in Form 16 and TDS is deducted at the time of vesting. If it doesn't (common with smaller subsidiaries or when RSUs are administered directly by the foreign parent via Fidelity NetBenefits, E*TRADE, or Schwab Equity Awards), you're responsible for computing and disclosing the perquisite yourself — this is a frequent gap.
LRS remittances & TCS
Every rupee you send abroad to fund a foreign brokerage account moves through the Liberalised Remittance Scheme (LRS), and above a threshold, a bank collects Tax Collected at Source (TCS) upfront. It isn't an extra cost — it's a prepaid credit against your final tax bill — but it does create a real, if temporary, cash flow drag.
| Purpose of remittance | TCS-free threshold | Rate above threshold |
|---|---|---|
| Overseas investment (stocks, ETFs, property, gifts) | ₹10 lakh/year (cumulative, per PAN) | 20% |
| Education / medical (self-funded) | ₹10 lakh/year | 5% (FY 2025-26); reduces to 2% from 1 Apr 2026 |
| Education funded by a specified loan (Section 80E) | N/A | Nil |
| Overseas tour packages | None (from first rupee, FY 2025-26) | 5% up to ₹10L, 20% above; flat 2% from 1 Apr 2026 |
The ₹10 lakh threshold is cumulative across all purposes, for the entire financial year, per PAN — not a separate allowance per remittance type. If you've already remitted ₹6 lakh this year for travel and a child's tuition, only ₹4 lakh of headroom remains before a fresh investment remittance starts attracting 20% TCS.
| Step | Amount | Running total | TCS this step |
|---|---|---|---|
| Overseas tour package (Mar 2026) | ₹6,00,000 | ₹6,00,000 | ₹15,000 (5% × ₹3L above pro-rated threshold — simplified) |
| Remittance to IBKR for US equity (Apr 2026) | ₹15,00,000 | ₹21,00,000 | 20% on the amount crossing ₹10L for the new FY |
Note: the ₹10 lakh threshold resets each financial year (1 April), so remittances just before and just after 31 March can effectively use two years' thresholds — a legitimate timing lever worth discussing with your CA for large one-off investments.
TCS is not a cost — it's a prepaid tax. The amount collected shows up in Form 26AS and AIS, and you claim it back (fully or partially, depending on your final liability) when you file your ITR. For large remittances, the practical issue is cash flow: a ₹40 lakh investment remittance can lock up roughly ₹6 lakh in TCS for several months until your refund is processed.
Foreign Tax Credit & Form 67
If tax has been withheld abroad — most commonly the 25% US withholding on dividends — you can claim credit for it against your Indian tax liability under Section 90 (DTAA) or Section 91 (no DTAA), using Form 67.
| Requirement | Detail |
|---|---|
| When to file | Before filing your ITR, and in any case on or before the end of the assessment year — 31 March 2027 for AY 2026-27 (per Rule 128(9), as amended by Notification 100/2022) |
| How to file | Online only, through the e-filing portal, verified with DSC or EVC |
| Documents needed | Foreign tax certificate/statement (e.g. broker's 1042-S), proof of payment, nature and amount of income |
| What FTC covers | Foreign tax, surcharge and cess payable under Indian law — not interest, fees, or penalties |
| What it doesn't cover | Disputed foreign tax under active litigation abroad |
| Currency conversion | SBI TTBR on the last day of the month preceding the date of payment/deduction |
Filing Form 67 late can cost you the credit entirely. ⚠ Based on tribunal rulings, not statute Tax tribunals have gone both ways on whether the Form 67 deadline is strictly mandatory or merely procedural — some rulings have allowed credit even when Form 67 was filed a few days after the ITR, others have upheld a strict denial. Given the inconsistency, the safe approach is always to file Form 67 before your ITR, not after.
Looking ahead: ⚠ Proposed transition under the Income-tax Act, 2025 (effective for income earned from 1 April 2026 onwards, i.e. Tax Year 2026-27), Form 67 is expected to be replaced by a renumbered/renamed equivalent as part of the broader Act transition. For the return you're filing now — for FY 2025-26, AY 2026-27 — you are still governed entirely by the Income Tax Act, 1961, and Form 67 under Rule 128 remains the correct form.
Which ITR form & schedules apply to you
Foreign assets or foreign income of any kind rule out ITR-1 and ITR-4 entirely — both forms lack Schedule FA. This trips up salaried investors who've filed ITR-1 for years and don't realise a single US stock purchase changes their required form.
| Your situation | Correct ITR form |
|---|---|
| Salary + capital gains + foreign assets, no business income | ITR-2 |
| Business/professional income + foreign assets | ITR-3 |
| Presumptive business income + foreign assets | Not eligible for ITR-4 — must use ITR-3 |
| Any foreign asset or foreign income, however small | Never ITR-1 or ITR-4 |
| Schedule | Purpose | Applies to |
|---|---|---|
| Schedule FA | Disclose foreign assets held (calendar year basis) | All ROR taxpayers with any foreign asset |
| Schedule FSI | Report income earned from foreign sources | Anyone with foreign dividends, interest, rent, or capital gains |
| Schedule TR | Summarise total tax relief claimed under Section 90/91 across countries | Anyone claiming FTC |
| Schedule CG | Capital gains computation, including foreign shares | Anyone who sold foreign stocks, ETFs, or vested RSU/ESPP shares |
| Schedule Salary | Includes RSU/ESPP perquisite value if not already in Form 16 | Employees with foreign equity compensation |
| Schedule 26AS/AIS reconciliation | Match TCS on LRS remittances and TDS to Form 26AS | Anyone who remitted funds abroad this year |
Common mistakes that trigger notices
| Mistake | Why it happens | Consequence |
|---|---|---|
| Filing ITR-1 despite holding foreign shares | Salaried investors default to the familiar form | Defective return notice u/s 139(9) |
| Skipping Schedule FA for a "small" or dormant account | Assumption that low value = no obligation | Flat ₹10 lakh penalty per asset per year, regardless of value |
| Reporting Schedule FA on FY (Apr–Mar) instead of calendar year | Confusing it with the rest of the ITR's FY basis | Under- or mis-reporting flagged on cross-check with CRS data |
| Using ESPP purchase price as cost basis instead of FMV at purchase | Conflating the discount with the taxable cost | Understated capital gains |
| Filing Form 67 after the ITR | Treating it as a formality that can follow later | Foreign Tax Credit denied at processing |
| Not reconciling LRS TCS in Form 26AS/AIS with actual remittances | Overlooking that TCS is only a credit, not a payment | Missed refund of excess TCS, or unexplained mismatch |
| Treating unvested RSUs as reportable income at grant | Confusing grant, vesting, and sale | Overstated income (a rarer but real error) |
| Ignoring CRS/FATCA data matching | Assuming foreign accounts are invisible to CBDT | Automatic exchange of information flags undisclosed accounts |
CRS and FATCA mean foreign accounts are not invisible. India participates in the OECD's Common Reporting Standard and has a FATCA arrangement with the US. Foreign banks and brokers routinely report account balances and income linked to your PAN/tax residency directly to CBDT. The question was never whether an undisclosed account gets noticed — only when.
The final filing checklist
Run through this once, in order, before you submit.
0 of 12 completeFrequently asked questions
Grouped by topic. Click any question to expand.
Deadlines & forms
31 July 2026 for ITR-1/ITR-2 filers (salary, capital gains, foreign assets, no business income), 31 August 2026 for ITR-3 non-audit cases (ITR-4 does not apply once you hold foreign assets), and 31 October 2026 for audit cases.
ITR-2 if you have no business income, or ITR-3 if you do. ITR-1 and ITR-4 do not have a Schedule FA and cannot be used once you hold any foreign asset.
Yes, until 31 December 2026, with a late fee under Section 234F (₹1,000 if total income is under ₹5 lakh, otherwise ₹5,000) plus interest on any unpaid tax.
You can file a revised return under Section 139(5) up to 31 March 2027 for AY 2026-27.
ITR-U lets you voluntarily disclose income you missed in your original, belated, or revised return, within 48 months from the end of the relevant assessment year — so by 31 March 2031 for AY 2026-27. It comes with additional tax, so it's a correction mechanism, not a planning tool.
No. Even though the new Act takes effect from 1 April 2026, your return for FY 2025-26 (AY 2026-27) relates to income earned before that date and is governed entirely by the Income Tax Act, 1961.
Schedule FA & foreign assets
Yes. There is no minimum value threshold for Schedule FA disclosure — the obligation is based on holding the asset, not its size.
The calendar year, not the financial year. For AY 2026-27, that's 1 January 2025 to 31 December 2025.
₹10 lakh under Section 42 of the Black Money Act — this is a per-return, per-assessment-year penalty, not multiplied by how many separate assets you hold. A separate ₹10 lakh under Section 43 applies if assets are disclosed but with materially inaccurate details. Whether the Assessing Officer must impose it or has discretion is disputed across ITAT rulings.
Yes. Non-immovable foreign assets aggregating below ₹20 lakh are exempt from the ₹10 lakh penalty — this is settled, enacted law effective 1 October 2024. The equivalent protection from prosecution currently rests on a CBDT instruction (with Finance Bill 2026 proposing to write it into the statute itself). Disclosure is still required either way — this only removes the penalty/prosecution exposure for a genuine miss.
An enacted, one-time, six-month voluntary disclosure window (introduced via the Finance Bill 2026) for taxpayers who missed past Schedule FA disclosures. Category 1 applies a reduced 60% levy for aggregate undisclosed value up to ₹1 crore; Category 2 is a flat ₹1 lakh fee (up to ₹5 crore in assets) where the underlying income was already taxed but never disclosed on Schedule FA — the common ESOP/RSU scenario. As of this guide's last update, the Central Government had not yet issued the Gazette notification that starts the window — don't file a declaration until it does, and don't trust any specific closing date you see elsewhere until CBDT confirms it.
Vested shares you legally hold are clearly reportable. Treatment of unvested RSUs (which you don't yet own) is less settled in practice — most conservative filers disclose the vested portion and consult a CA on edge cases involving unvested grants with contingent rights.
Yes. Signing authority alone triggers a Schedule FA disclosure obligation, independent of beneficial ownership.
Once you're ROR, every foreign asset you hold — including ones accumulated entirely during your NRI years — becomes reportable going forward. Past non-disclosure while you were NR/RNOR isn't a violation, but continuing to hold undisclosed assets after becoming ROR is.
Use the SBI Telegraphic Transfer Buying Rate (TTBR). For closing balances, use the TTBR on 31 December. For peak balances, use the TTBR on the date the peak balance was reached.
Foreign income & capital gains
As unlisted securities: 12.5% LTCG (no indexation, no ₹1.25 lakh exemption) if held over 24 months, or slab rate STCG if held 24 months or less.
Because Indian tax law's favourable listed-securities regime (Section 112A, 12-month LTCG, ₹1.25 lakh exemption) applies only to securities listed on a recognised Indian stock exchange. US stocks aren't listed in India, so they default to the unlisted-securities rules.
No — since the fund unit itself is listed on an Indian exchange, it gets the listed-securities holding period (12 months) rather than the 24-month unlisted threshold, though the underlying LTCG rate is still 12.5%.
The gross dividend is added to your Indian income and taxed at your slab rate under "income from other sources." The 25% US withholding tax can be claimed back as a Foreign Tax Credit via Form 67, subject to the DTAA limitation.
Yes — capital losses can generally be set off against capital gains of the same type (short-term losses against both STCG and LTCG; long-term losses only against LTCG), regardless of whether the underlying asset is Indian or foreign.
The SBI TTBR on the last day of the month preceding the sale (and separately, the purchase) transaction date.
No. That exemption under Section 112A is specific to listed Indian equity and equity-oriented mutual funds. Foreign stock LTCG is fully taxable at 12.5% from the first rupee.
The computation mechanics (standard 30% deduction, interest deduction on any loan) are broadly similar, but the income is reported separately under Schedule FSI and any foreign tax withheld can be claimed via Form 67.
RSUs & ESPPs
At vesting. The grant itself isn't a taxable event; the fair market value of the shares on the vesting date is taxed as salary perquisite.
The fair market value on the vesting date — the same figure already taxed as perquisite income. Any further gain or loss from that value to the sale price is a capital gain or loss.
As salary perquisite at the time of purchase — the discount (FMV minus price paid) is taxed like a bonus. Any gain from FMV-at-purchase to eventual sale price is a separate capital gain.
You're still responsible for including the perquisite value in your salary income and paying advance tax/self-assessment tax on it — the absence of employer TDS doesn't remove the tax liability.
Yes — once vested, they're a foreign asset you hold, reportable in Schedule FA regardless of whether you've sold them.
You'll need to compute the perquisite value yourself (FMV at vesting × shares vested, converted to INR) and include it in your salary schedule, since it likely won't appear on your Indian Form 16 automatically.
LRS & TCS
20% on the amount exceeding ₹10 lakh in a financial year, cumulative across all LRS remittances under your PAN.
No — it's a prepaid tax credited to your PAN, adjustable against your final tax liability or refundable when you file your ITR. It's a cash-flow drag, not a permanent cost.
No — it's one combined ₹10 lakh threshold per PAN per financial year across every LRS purpose, not a separate allowance for each category.
Remittances for education funded through a specified loan under Section 80E are exempt from TCS entirely, regardless of amount.
Currently no — the government has kept international credit card spending while physically overseas outside the LRS/TCS framework, pending further notification.
It automatically reflects in your Form 26AS and AIS against your PAN, and is adjusted against your total tax liability when you file your ITR — any excess is refunded.
No — LRS applies only to resident Indians. NRIs remit through NRE/NRO/FCNR accounts under separate RBI rules, not LRS.
Foreign Tax Credit
Claiming credit in India for tax already withheld or paid abroad on the same income, to avoid double taxation under Section 90 (DTAA) or Section 91.
Before filing your ITR — the safest practice — and in any case on or before the end of the assessment year, i.e. 31 March 2027 for AY 2026-27 (Rule 128(9), as amended by Notification 100/2022).
Some tribunal rulings have still allowed the credit, treating the deadline as procedural rather than mandatory, but outcomes have been inconsistent — don't rely on this. File Form 67 before your ITR.
You can claim credit up to the amount of Indian tax actually payable on that same income — FTC cannot exceed your Indian tax liability on the foreign income, and it can't be claimed against interest, fees, or penalties.
No — Form 67 is only relevant when there's actual foreign tax paid or withheld on realised income (dividends, interest, or gains), not for unrealised holdings.
General & edge cases
Yes, if you hold any foreign asset at any time during the year — filing becomes mandatory regardless of your income level.
If the aggregate value is under ₹20 lakh, you likely fall under the standing penalty relief (settled law since 1 October 2024), but disclosure is still required going forward. For past-year gaps, FAST-DS 2026 Category 2 is built for exactly this scenario — a flat ₹1 lakh fee for full immunity — but the window hasn't opened yet as of this guide's last update. Line up a CA now so you're ready the moment CBDT notifies the start date.
Generally yes — each account holder with beneficial ownership or signing authority has an independent disclosure obligation, though the specific reporting share can depend on how the account is structured.
No — GIFT City investments made through Indian resident-compliant IFSC structures (e.g. India-domiciled feeder funds investing into US equity) are typically treated as Indian assets for disclosure purposes, since the investment vehicle itself is Indian, not foreign.
Keep broker statements, Form A2/27D, foreign tax certificates, and vesting schedules for at least six years, since assessment can be reopened for foreign-asset matters well beyond the standard window (in some cases up to 16 years under specific provisions).
Simple, single-broker cases are manageable with careful DIY filing using this checklist. If you have RSUs across multiple grant years, several foreign accounts, or any history of missed Schedule FA disclosure, a CA experienced specifically in cross-border/Black Money Act matters is worth the fee — the penalty asymmetry (₹10 lakh per miss) makes this one of the few tax areas where professional help clearly pays for itself.
⚠ Read this before you rely on any figure above. Every claim in this guide has been checked against primary sources — the Finance Bill 2026 text, Section 130 of the income-tax framework, CBDT instructions, and Rule 128 — as of the "Last updated" date above. Where the law is settled and in force, we've said so plainly (e.g. the ₹20 lakh Section 42/43 penalty relief, effective since 1 October 2024). Where it genuinely isn't settled, we've labelled it inline rather than presenting it as fact: FAST-DS 2026 is enacted but its commencement window has not yet been notified by the Central Government as of this writing — do not file a declaration under it until that notification is issued. The Section 49/50 prosecution relief at ₹20 lakh currently rests on a CBDT administrative instruction, with statutory codification only proposed. Whether the ₹10 lakh Schedule FA penalty is mandatory or discretionary is genuinely disputed across ITAT rulings. Tax law changes fast, and CBDT can issue new notifications at any time — treat this guide as a well-sourced starting point, not a final word, and confirm anything material with a qualified Chartered Accountant and directly on incometax.gov.in before you file or rely on it, particularly for Black Money Act / Schedule FA matters where the exposure is high.