Schedule FA, FSI, TR & Form 10F for Returning NRIs - ITR Guide

Moving back to India after years abroad changes more than just your address. It changes your tax world entirely. Most returning NRIs have vaguely heard terms like Schedule FA, Schedule FSI, and Form 10F, but few know exactly which applies to them, when obligations kick in, or what triggers a Rs 10 lakh penalty.

The answer to all of it comes down to one thing: your residency status under the Indian Income Tax Act. This guide maps each schedule and form to the right status, explains what you must report, and highlights the traps that catch returning NRIs off guard when filing their India tax return.

Your Residency Status Determines What You Must Report

Before you open your ITR form, you need to know your residency category for the financial year. India's Income Tax Act classifies individuals into three groups.

NRI (Non-Resident Indian): You spent fewer than 182 days in India during the financial year. Your India tax covers only Indian-sourced income. No foreign asset or foreign income reporting is required.

RNOR (Resident but Not Ordinarily Resident): This is the transitional status most returning NRIs hold for the first two to three years after moving back. You qualify as RNOR if you were an NRI for at least 9 of the 10 financial years before the current year, or if you spent 729 days or fewer in India during the preceding 7 years. Your RNOR status protects your foreign income from India tax during this window, since only Indian-sourced income is taxable.

ROR (Resident and Ordinarily Resident): Once you no longer meet the RNOR criteria, you become a full resident. Your global income is taxable in India. Every foreign asset and every rupee of foreign income must be reported.

Schedule FA: Disclosing Your Foreign Assets

Schedule FA (Foreign Assets) is the section in ITR-2 and ITR-3 where ROR taxpayers list every asset they hold outside India. It exists because of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which requires full transparency on overseas holdings.

If you are an NRI or RNOR, you skip this section entirely. The obligation begins only when you cross into ROR territory.

What Assets Go into Schedule FA

Schedule FA divides foreign assets into specific tables. You fill only the tables that apply to you.

Table A1: Foreign Depository Accounts. This covers foreign bank accounts, including savings, current, and fixed-deposit accounts. You report the name and address of the bank, your account number, the date the account was opened, the peak balance during the calendar year, the closing balance, and the gross interest credited. Your US savings account, checking account, and any foreign fixed deposits go here.

Table A2: Foreign Custodial Accounts. This is for accounts where a foreign institution holds financial assets on your behalf. Your 401(k), IRA, HSA, and any foreign brokerage account (Schwab, Fidelity, Vanguard) go into Table A2. Report the institution name, account number, peak value, closing value, and any amounts paid or credited during the year (dividends, interest, distributions).

Table A3: Foreign Equity and Debt Interests. Individual stock holdings, ETFs, and foreign mutual fund units go here. Each holding is a separate line. If you hold Apple shares, Microsoft shares, and a Vanguard S&P 500 ETF, that is three entries. RSUs that have vested and converted into shares also go into Table A3. Report initial value, peak value, closing value, and gross proceeds from any sale during the year.

Table A4: Foreign Insurance or Annuity Contracts. If you hold a life insurance policy, pension annuity, or annuity contract outside India, report the cash or surrender value here.

All values must be converted to Indian Rupees using the SBI buying rate on the last day of the reporting calendar year.

The Calendar Year Trap

This is where many returning NRIs make mistakes. Schedule FA follows the calendar year (January 1 to December 31), not India's financial year (April 1 to March 31).

For AY 2026-27 (FY 2025-26), you must report all foreign assets held at any time between January 1, 2025 and December 31, 2025. If you closed a US bank account in February 2025, it still needs to appear in Schedule FA for that year.

The penalty for failing to disclose foreign assets is Rs 10 lakh per year of default under the Black Money Act. In serious cases, this can escalate to prosecution and imprisonment of up to 7 years. Disclosure is non-negotiable once you become ROR.

The Income Tax Department has published a step-by-step guide on filling Schedule FA, FSI, and TR for residents with foreign assets and income.

Schedule FSI: Reporting Income from Foreign Sources

Schedule FSI (Foreign Source Income) is where ROR taxpayers declare income earned outside India. Every dollar, pound, or dirham of foreign income must be reported here.

If you are an RNOR, your foreign income earned and received outside India does not trigger Schedule FSI. That protection lifts the moment your RNOR period ends.

For a typical returning NRI who worked in the US, FSI-reportable income includes:

• Interest earned in your US bank accounts
• Dividends from US stocks or ETFs
• Capital gains from selling US shares or mutual funds
• Rental income from a US property
• Any remaining US salary earned before your move

Here is how you fill it. For each income item, enter the country code (US = United States), the nature of income, the amount in foreign currency, the Indian Rupee equivalent, the tax paid in the foreign country, and the tax relief you are claiming under India's treaty or domestic law.

Example: Priya returned to India in mid-2024. By FY 2026-27, she qualifies as ROR. During calendar year 2025, she earned $2,000 in US dividend income, on which she paid $300 in US withholding tax. She reports this in Schedule FSI and then claims the $300 (converted to INR) as tax relief in Schedule TR.

Schedule FSI is not a penalty trigger on its own. It simply declares the income. The relief comes through Schedule TR.

Schedule TR: Claiming Relief on Taxes You Already Paid Abroad

Schedule TR (Tax Relief) lets you avoid paying tax twice on the same income. It must always be used alongside Schedule FSI, covering the same income declared there.

India offers tax relief through three routes:

Section 90 (DTAA countries): India has a Double Taxation Avoidance Agreement with the US, the UK, Canada, and many other countries. If your foreign income comes from a DTAA country, you claim relief under Section 90. The relief amount is the tax you paid abroad, capped at the tax India would have levied on that income. The US-India DTAA is the most relevant treaty for NRIs from America.

Section 90A (Specified associations): Similar to Section 90 but applies to agreements entered into by certain associations, not governments.

Section 91 (Non-DTAA countries): If India has no treaty with the country where you paid tax, you can still claim unilateral relief under Section 91, subject to specific conditions.

Continuing Priya's example: India's tax rate on her US dividend income is 30%. She paid 15% in the US ($300). Under Section 90, she claims Rs 25,000 (approximately) in Schedule TR. She pays only the remaining 15% to India. No double tax.

Section 89A: Deferring Tax on Foreign Retirement Accounts

If you have a 401(k), IRA, or similar foreign retirement account, Section 89A gives you an important option. Rather than paying tax every year on accrued gains inside your retirement account, you can defer the tax to the year you actually withdraw the money.

You make this election in your ITR by filing the relevant details in Schedule FSI for the year of withdrawal, and claiming relief in Schedule TR. Talk to an NRI-specialist tax advisor before making this election, since it is irreversible once filed.

Form 10F: What NRIs and RNORs Need to Claim DTAA Benefits

Form 10F operates at a different point in the process. It is not about your India tax return. It is a declaration you file with the Indian tax authorities (or submit to the income payer) so they can apply a lower TDS rate on India-sourced income.

If you are still an NRI or RNOR and you earn income from India (NRO account interest, rental income, dividends from Indian stocks), the payer typically deducts TDS at the standard rate (30% for NRIs on most income). To claim the lower treaty rate under DTAA, you need Form 10F.

To file Form 10F, you need a Tax Residency Certificate (TRC) from your country of residence. The TRC is the official document proving you are a tax resident of that country. Form 10F essentially supplements the TRC with specific details the certificate may not include: your status (individual or company), your Tax Identification Number (TIN), your address outside India, and the period of your residency.

Since July 16, 2022, filing Form 10F online on the income tax e-filing portal has been mandatory. You cannot submit it in paper form.

Form 10F is filed once per financial year for each income type. Once you transition to ROR, the form becomes irrelevant. As a full resident, you claim DTAA relief directly in Schedule TR of your ITR. For a complete breakdown, read our guide on Form 10F for NRIs.

Conclusion

Your obligations under Schedule FA, Schedule FSI, Schedule TR, and Form 10F all flow from one question: what is your residency status this financial year? As an NRI or RNOR, your foreign assets and foreign income stay largely outside India's reporting net.

The moment you cross into ROR territory, that changes completely. Schedule FA and Schedule FSI become mandatory, Schedule TR lets you avoid double tax, and Form 10F steps aside. If you are in the transition year from RNOR to ROR, or unsure about your schedule FA FSI NRI India tax return obligations, get advice from a cross-border tax specialist before you file.