{"id":1563,"date":"2026-07-28T08:30:48","date_gmt":"2026-07-28T04:00:48","guid":{"rendered":"https:\/\/caalokkumar.com\/my-writing\/?p=1563"},"modified":"2026-07-28T08:30:51","modified_gmt":"2026-07-28T04:00:51","slug":"foreign-assets-in-itr-ay-2026-27","status":"publish","type":"post","link":"https:\/\/caalokkumar.com\/my-writing\/foreign-assets-in-itr-ay-2026-27\/","title":{"rendered":"Foreign Assets in ITR AY 2026-27: Reporting in Schedule FA & FTC"},"content":{"rendered":"\n

Reporting Foreign Assets in ITR and Foreign Income in ITR for AY 2026-27<\/h2>\n\n\n\n

Foreign Assets in ITR like Foreign bank accounts, overseas shares, RSUs, foreign retirement accounts, immovable property situated abroad and income received from outside India require special attention while filing an Indian income-tax return.<\/p>\n\n\n\n

A taxpayer may have paid tax outside India, received the income in a foreign bank account or never remitted the money to India. None of these facts, by itself, removes the Indian reporting requirement.<\/p>\n\n\n\n

For Assessment Year 2026-27, the following four compliances must be examined separately:<\/p>\n\n\n\n

    \n
  1. Reporting the income under the correct head of income;<\/li>\n\n\n\n
  2. Disclosing foreign-source income in Schedule FSI;<\/li>\n\n\n\n
  3. Disclosing foreign assets and accounts in Schedule FA; and<\/li>\n\n\n\n
  4. Claiming foreign tax credit through Schedule TR and Form 67.<\/li>\n<\/ol>\n\n\n\n

    The most common mistake is treating these as interchangeable disclosures. They are not. Reporting foreign dividends in Schedule OS does not eliminate Schedule FSI or Schedule FA, where applicable.<\/p>\n\n\n\n

    Important transition clarification for AY 2026-27<\/h2>\n\n\n\n

    Income earned during 1 April 2025 to 31 March 2026 is assessed in AY 2026-27 under the Income-tax Act, 1961.<\/p>\n\n\n\n

    Although the Income-tax Act, 2025 came into force from 1 April 2026, it applies to income earned from 1 April 2026 onwards. The Income Tax Department has expressly clarified that returns for AY 2026-27 continue under the 1961 Act and the corresponding old ITR forms.<\/p>\n\n\n\n

    Taxpayers should therefore select \u201cAY 2026-27\u201d and use the forms notified under the Income-tax Act, 1961. The distinction is explained further in our guide on the Income-tax Act 2025 forms transition<\/a>.<\/p>\n\n\n\n

    Official clarification: Income Tax Department\u2014transition-year ITR FAQs<\/a><\/p>\n\n\n\n

    Who must report worldwide income?<\/h2>\n\n\n\n

    The starting point is the taxpayer\u2019s residential status under Sections 5 and 6 of the Income-tax Act, 1961.<\/p>\n\n\n\n

    Residential status<\/th>General scope of taxable income<\/th>Schedule FA<\/th><\/tr><\/thead>
    Resident and Ordinarily Resident\u2014ROR<\/td>Worldwide income is generally taxable in India<\/td>Applicable<\/td><\/tr>
    Resident but Not Ordinarily Resident\u2014RNOR<\/td>Foreign income is generally excluded unless derived from a business controlled in, or profession set up in, India<\/td>Generally not applicable<\/td><\/tr>
    Non-Resident\u2014NR<\/td>Income received, accruing or deemed to accrue in India is taxable<\/td>Not applicable<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    Thus, an ROR must normally report foreign income even if:<\/p>\n\n\n\n