Reporting Your Indian Accounts to the IRS

If you are a US citizen, a green card holder or a US tax resident and you have money in India, the IRS wants to know about the accounts even when they pay no tax you owe. Two separate reports carry that duty, the FBAR and Form 8938, and Indian holdings reach their thresholds more easily than most people expect. This chapter covers which Indian holdings count, how to value them, how the IRS learns about them, and what the options are for years you missed. The visa-shelf chapter Reporting Foreign Accounts: the FBAR and Form 8938 covers the general rules; this one is the Indian case.

The two reports

The FBAR threshold covers all your foreign accounts added together. In rupees it is small: at the Treasury's year-end 2025 rate of 89.854 rupees to the dollar, the FBAR threshold is about ₹8.99 lakh. A single fixed deposit can pass it, and a household with a savings account, a few deposits and a demat account usually does.

Which Indian holdings count

For the FBAR, FinCEN's definition of a financial account covers savings and deposit accounts, securities and brokerage accounts, insurance or annuity policies with a cash value, and shares in a mutual fund. In Indian terms, report:

• NRE, NRO and FCNR(B) accounts, and any resident savings account you never closed;
• each fixed deposit that has its own account number, valued separately at its own highest balance;
• demat and broking accounts, and mutual fund folios held directly with a fund house;
• endowment and money-back policies with a cash value (a pure term policy has none);
• joint accounts, where each US person who is an owner reports the full balance, and accounts that are not yours but on which you can sign, such as a parent's account with your mandate.

The answer page Which Indian accounts go on the FBAR? works through these one by one. Property, gold and cash at home are not accounts and are not reported on the FBAR.

PPF, EPF and NPS

Practitioners differ here, and we say so plainly. The IRS FBAR page lists as not reportable accounts "held in a retirement plan of which you're a participant or beneficiary", but the regulation behind it (31 CFR 1010.350(g)(4)) names only plans under sections 401(a), 403(a) and 403(b) of the Internal Revenue Code and IRAs, which Indian schemes are not. We found no statement from FinCEN or the IRS about the Public Provident Fund, the Employees' Provident Fund or the National Pension System. Some preparers report them on the FBAR because they hold money at a financial institution in your name; others treat EPF and NPS as foreign pension arrangements outside the definition. For Form 8938 the IRS instructions say expressly that an interest in a foreign pension plan is reportable, valued at the fair market value of your interest on the last day of the year. Ask your preparer for one answer, write it down, and apply it the same way every year.

Valuing the account

Both reports work in US dollars, so each Indian balance has to be converted.

• FBAR: take each account's maximum value during the year and convert it at the Treasury Reporting Rate of Exchange for the last day of the calendar year, even if the peak was in March. The Bureau of the Fiscal Service publishes the rate for the Indian rupee quarterly. It was 89.854 on 31 December 2025 and 85.577 a year earlier, so the same rupee balance is worth fewer dollars when the rupee is weaker.
• Highest balance, not year-end balance: a deposit that briefly held the proceeds of a sale, or a transfer on its way out of India, counts at its peak.
• Records: keep the account name and number, the bank's name and address, the account type and the maximum value for five years from the due date (IRS FBAR page).
• Form 8938 uses its own valuation rules and the Treasury rate in most cases; follow the form's instructions.

How the IRS learns about Indian accounts

India and the United States signed a FATCA intergovernmental agreement on 9 July 2015 (US Treasury). Under Article 2, Indian financial institutions collect the name, address and US taxpayer identification number of each account holder who is a US person, plus the account number and the year-end balance, and for deposit accounts the gross interest paid in the year. India's tax authority exchanges that information each year with the IRS. This is why banks ask for your US taxpayer number and tax residence on forms, and it means a mismatch between your return and the bank's report can be seen. It also means that filing correctly is the straightforward course.

If you missed a year

The IRS says that filing an FBAR late or not at all is a violation that may bring penalties, and that a person the IRS has not contacted, and who is not under investigation, should file late FBARs as soon as possible to keep potential penalties to a minimum, with an explanation of the reason. If you use a compliance option such as the streamlined filing compliance procedures, follow its instructions instead. These are maximums, not automatic charges, and they change: the statutory civil FBAR maximum for a non-wilful violation is $10,000 before the yearly inflation adjustment, and the failure-to-file penalty for Form 8938 is $10,000. The Supreme Court held in Bittner v. United States that the non-wilful penalty applies per report, not per account. Which route fits depends on your facts, including whether the income was reported, so a review by a US tax professional who files these regularly is worth the fee before you file anything late.

India asks the mirror-image question

While you are a non-resident or RNOR, India does not ask about your US accounts in the same way. When you become resident and ordinarily resident, it does. India has a one-time disclosure scheme for foreign assets, the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (Finance Act, 2026, Chapter IV, sections 130 to 144). As reported in secondary sources, a Gazette notification of 14 August 2026 opened it from 16 August to 31 December 2026; we did not read the notification, so confirm the dates. The Act covers people who were resident in India in the year an undisclosed income arose or an undisclosed asset was acquired, including some now non-resident. It has two routes: one for undisclosed assets and income up to ₹1 crore combined, and one for assets up to ₹5 crore acquired while non-resident or from income already taxed in India but missing from the foreign-asset schedule (sections 131 and 133). Read the department's FAQs and take advice before relying on it. The plan for moving back, and the book on it later in this shelf, return to this.