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Returning to India with US RSUs? Schedule FA needs the account, not just the shares

You moved back with vested RSUs sitting in a US brokerage, and you reported the shares but not the account they sit in.

You came back to India after years in the US, your vested RSUs are still in a Fidelity, E-Trade or Schwab account, and once you became ordinarily resident you knew you had to disclose them in Schedule FA. So you filled in the shares. The trap is that the shares and the account they sit in are two separate disclosures, and reporting only the shares leaves the brokerage account itself undisclosed, which is exactly what the Black Money Act penalises. This is one of the most common returning-techie mistakes, and fixing it is India-side work.
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Last reviewed: 4 August 20267 min readReviewed by Preetesh Maloo, CA

The short answer

A US brokerage holding your vested RSUs needs two Schedule FA entries, not one. Table A2 discloses the foreign custodial account, the brokerage account itself, and Table A3 discloses the foreign equity, the vested shares inside it. Filing only Table A3 leaves the account undisclosed, and an incomplete Schedule FA is treated as non-disclosure of a foreign asset. Two more things trip people up. Schedule FA runs on the calendar year (1 January to 31 December), unlike the rest of the return, and it applies once you are resident and ordinarily resident, not during your RNOR years. And there is no minimum value for disclosure: even one share held for one day must be reported. The penalty for getting it wrong is flat and heavy under the Black Money Act 2015, so the fix is to complete both tables, with the right conversions, from the first year you are ordinarily resident.

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Related situations

The shares and the account are two different disclosures

The mistake is treating the RSUs as one thing to report. In Schedule FA the brokerage account and the shares inside it are disclosed separately. The account, your Fidelity, E-Trade or Schwab account, is a foreign custodial account and goes in Table A2. The vested shares themselves are foreign equity and go in Table A3.

Many returning engineers fill Table A3 with the shares, see the holding reported, and stop. But the custodial account in Table A2 is then left blank, so the account that holds everything is undisclosed. The department treats an incomplete Schedule FA as a failure to disclose the foreign asset, which is the omission the Black Money Act is built to punish. So the rule is simple: whenever RSUs sit in a foreign brokerage, both A2 and A3 have to be filled.

The calendar-year and RNOR quirks that catch people out

Schedule FA does not follow the rest of your return. The whole return runs on the Indian financial year, April to March, but Schedule FA reports foreign assets held during the calendar year, 1 January to 31 December. So the period you describe your holdings over is different from the period your income is taxed over, and mixing them up produces a wrong schedule.

The other quirk is who has to file it. Schedule FA is required only once you are resident and ordinarily resident. During your RNOR years, which a returning NRI usually gets for two to three years, you are not required to fill it. So the disclosure duty switches on the year you become ordinarily resident, and that is the first year both tables must be complete.

Why the penalty is the reason to get this right

The reason to take Schedule FA seriously is the Black Money Act 2015. Its penalty for failing to disclose a foreign asset in the return is a flat 10 lakh rupees for the year, and it applies to the omission itself, not to unpaid tax. So declaring the RSU income does not cover you if the account is missing from Table A2.

Be careful about one thing you may have read. A later change exempts smaller movable foreign assets from that 10 lakh penalty in some cases, but that is relief from the penalty, not permission to leave the asset off the return. The duty to disclose has no threshold. So the safe position is to report the account and the shares in full, every year you are ordinarily resident, and treat the penalty relief as a backstop rather than a reason to skip a disclosure.

A worked example: Karthik's Schwab account after moving to Bengaluru

Karthik moved back to Bengaluru with about 30,000 dollars of vested RSUs in a Schwab account. For his first two years home he was RNOR, so Schedule FA did not apply. In the third year he became ordinarily resident, and the disclosure switched on.

He first filed only Table A3, listing the shares, and left Table A2 blank. His CA caught it: the Schwab account itself was undisclosed, an incomplete Schedule FA and a Black Money Act exposure even though he had declared the dividends. They corrected it to show the custodial account in Table A2 and the shares in Table A3, using the calendar-year period and the right exchange rates, so both the account and the holding are on record. Karthik now files both tables every year, and the RSUs are a clean line on his return rather than a penalty waiting to happen.

What's involved

What the CA actually does

  1. 1

    We complete both Table A2 and Table A3

    We disclose the foreign custodial account in Table A2 and the vested shares in Table A3, so the account is never left off, which is the omission the Black Money Act targets.

  2. 2

    We get the calendar-year period and conversions right

    We report the holdings over the calendar year Schedule FA actually uses, with the correct exchange rates on the right dates, so the schedule is internally consistent and defensible.

  3. 3

    We map when the disclosure duty starts

    We confirm when your RNOR window ends and you become ordinarily resident, because that is the first year Schedule FA is due, and we make sure nothing is missed from that year on.

  4. 4

    We check prior years and close any exposure

    If earlier ordinarily-resident years were filed with only Table A3, or missed entirely, we assess the Black Money Act exposure and put it right rather than leave it to surface in a notice.

What to have ready

Documents you'll typically need

  • Your US brokerage statements (Fidelity / E-Trade / Schwab) for each calendar year
  • RSU vesting records and the shares held
  • Your date of return and when you became ordinarily resident
  • Any dividends received and US tax withheld
  • PAN and your filed Indian returns for the ordinarily-resident years

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next, how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 46 countries.

References on this page

  • Schedule FA of the ITR: foreign assets, reported on a calendar-year basis (1 January to 31 December), once resident and ordinarily resident
  • Table A2: foreign custodial account (the brokerage account); Table A3: foreign equity and debt interest (the shares)
  • Black Money Act 2015, Section 43: flat penalty for failure to disclose a foreign asset in the return
  • Section 6: RNOR is not required to fill Schedule FA; the duty begins on becoming ordinarily resident

Frequently asked questions

Common questions

Not if you only filled Table A3. The shares go in Table A3, but the brokerage account they sit in is a separate disclosure in Table A2. Reporting only the shares leaves the account undisclosed, which is treated as non-disclosure of a foreign asset under the Black Money Act. Both tables have to be filled.

From the year you become resident and ordinarily resident. During your RNOR years, usually the first two to three after returning, Schedule FA does not apply. The duty switches on when you become ordinarily resident, and both tables are due from that year, every year.

No. Schedule FA has no minimum value for disclosure, so even a single share must be reported. A later change reduces the penalty for smaller movable assets in some cases, but that is penalty relief, not permission to leave the asset off the return.

Schedule FA reports foreign assets held during the calendar year, 1 January to 31 December, while the rest of your return runs on the April to March financial year. It is a known quirk, and using the financial-year period by mistake produces a wrong schedule.

Yes. The Black Money Act penalty is for not disclosing the asset, separate from the tax on the income. Tribunals have upheld the penalty even where the income was declared and only the asset was left off Schedule FA. Declaring the income does not cover a missing Table A2.

The exceptions that change the answer

Where the general rule stops applying to you

Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.

Black Money Act penalty for non-disclosure of foreign assets

Right now: Rs 10 lakh flat, per year of default

Where it works differently

Aggregate value of foreign assets (OTHER than immovable property) does not exceed Rs 20 lakh at any time in the year
No penalty under s.42 or s.43.
De minimis proviso, raised from Rs 5 lakh to Rs 20 lakh by the Finance (No. 2) Act 2024 with effect from 1 October 2024.
The person is RNOR or non-resident
Schedule FA does not apply, so no exposure.
The obligation attaches to a resident and ordinarily resident.
The foreign asset is immovable property
The Rs 20 lakh carve-out does NOT apply.
The proviso expressly excludes immovable property.

Commonly got wrong

  • The de minimis threshold is Rs 5 lakh. Raised to Rs 20 lakh from 1 October 2024.Rs 20 lakh, excluding immovable property.
  • NRIs must file Schedule FA. It applies to residents and ordinarily residents only.The obligation starts when you become ordinarily resident.

Schedule FA reporting period

Right now: The CALENDAR year ending during the relevant financial year, not the Indian financial year

Where it works differently

Filing for FY 2025-26
Schedule FA covers 1 January to 31 December 2025, a nine-month offset from the Indian tax year.
The schedule is aligned to foreign reporting years so that CRS and FATCA data reconcile.
An asset was held for even one day in that calendar year
It is reportable. Closing the account before 31 March does not remove the obligation.
'At any time during' the period.
The taxpayer is RNOR or non-resident
Schedule FA does not apply at all.
The duty attaches to a resident and ordinarily resident.

Commonly got wrong

  • Schedule FA covers the Indian financial year. It covers the calendar year ending within that financial year.Schedule FA in the FY 2025-26 return covers 1 January to 31 December 2025, the calendar year, not the Indian financial year.

Related

If this matched your situation, these go further

Foreign tax credit and Schedule FA disclosure on your Indian returnReturning to India with a US 401(k) or IRA, how India taxes it, and Section 89AThe same salary taxed twice on an onsite deputation, and how to get it backNRI ITR filing (we file for you)DTAA TDS recoverySwitch your NRI CA (free audit)Schedule FA disclosure builderResidential status checker

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