If you’re an Indian developer billing US or UK clients, Schedule FA is the foreign asset disclosure section in your ITR.
It covers Payoneer, Wise, Deel balances, foreign bank accounts, vested RSUs, foreign brokerage accounts and any other ways of holding funds and assets outside India. Non-disclosure leads to penalties under the Black Money Act (I know, scary!).
Why is Schedule FA such a common blind spot for developers?
The Indian government is not dependent on you for reporting the foreign assets. India receives financial information through international information exchange systems known as FATCA and CRS.
US and UK banks and brokers share financial information linked to Indian tax residents. This includes bank accounts, brokerage accounts and financial platforms linked to Indian address, Indian tax residency or PAN-linked identity records.
There is a huge penalty of ₹10 lakh
The Black Money Act imposes a ₹10 lakh penalty in two situations:
- If you had a foreign asset or foreign income during the year and did not file your return for the tax year (Section 42 of Black Money Act).
- If you filed your return but failed to disclose, or gave incorrect details of, a foreign asset or foreign income (Section 43 of Black Money Act).
This applies even if the asset is held as a beneficial owner.
There is a limited relief: No penalty applies for movable foreign assets (like stock, crypto and bank balances) if the total value does not exceed ₹20 lakh. This is only the relief of penalty under the Black Money Act .
The Income tax penalties will still apply. If you can not prove how you got the asset, Income tax will ask you to pay 30% of the value of foreign asset.
So, even if your RSUs are worth $8,000 or your Wise or Payoneer balance is small, you should report them in Schedule FA.
Does this apply to software engineers?
Schedule FA applies based on your residential status.
If you’re Resident and Ordinarily Resident in India, you need to disclose foreign assets held at any time during the relevant reporting period.
This includes foreign payment accounts, foreign brokerage accounts, vested RSUs, foreign shares, foreign bank accounts, foreign dividends and signing authority.
Which ITR should developers file?
The ITR form depends on both: income type and disclosure requirements. As a freelancer or remote software developer, your options are either ITR-3 or ITR-4.
A common misunderstanding is that Income under Section 44ADA/44AD can only be filed under ITR-4. This is incorrect. ITR-4 is simply a shorter version of ITR-3.
In other words, Section 58 benefits (earlier section 44ADA and 44AD) can be claimed even when filing ITR-3.
There are some scenarios when you can not file ITR-4. One of them is if you have foreign assets or foreign income. Please note that income earned from foreign clients is counted as Indian income. It is an export of services.
What counts as a foreign asset for Indian developers?
Foreign assets are not limited to overseas property or a foreign bank account. For developers, the issue comes from payment platforms, equity compensation, and investment accounts.
Payment platforms: Payoneer, Wise and PayPal
Deel, Upwork and Toptal accounts used to receive and store funds also fall within the scope of Schedule FA and the balances should be reported.
You will be required to provide the following information:
- Account opening date
- Institution name
- Country
- Account number or customer ID
- Opening balance
- Closing balance
- Peak balance
- Income credited during the relevant period
Vested RSUs and equity from US or UK companies
Developers working with foreign startups frequently receive RSUs, ESOPs or advisory equity shares.
Un-excercised RSUs are not owned shares, so they’re not reported. Once you exercise the RSUs, they become shares owned by you. Such shares are held in a foreign brokerage account, and must be disclosed in Schedule FA.
Example:
A developer working for a US SaaS company receives vested shares through Interactive Brokers. Both the brokerage account and the vested shares must be reported in Schedule FA.
Schedule FA only deals with disclosure of the asset. The shares will have to be reported even if you’re not required to pay any taxes on them.
Foreign brokerage accounts and crypto in foreign wallets
A foreign brokerage account holding US stocks, ETFs or employer shares must be reported as a foreign asset.
Crypto tokens held on a foreign exchange also need to be reported. Crypto income is reported under Schedule VDA (Virtual Digital Asset), but if the crypto is held in a foreign wallet, it will have to be reported in Schedule FA.
Schedule FA reporting is for the calendar year
Schedule FA does not follow India’s April to March financial year. The assets are reported in Schedule FA on a calendar year basis.
For foreign asset disclosure AY 2026-27 (that is, the ITR to be filed in 2026), you need to report foreign accounts and foreign equity held between January 1, 2025 and December 31, 2025.
You need to report all accounts with activity during the calendar year
Let’s say your Deel account had USD 8,000 in August 2025. The balance was withdrawn in September 2025. The account had zero balance after that.
That does not end the Schedule FA issue. The account had a balance during the relevant calendar year. The peak balance and account details need reporting.
So, download calendar-year statements from Upwork, Deel, Fiverr and foreign brokers and banks before preparing the ITR.
How to fill Schedule FA: A quick guide
Know your table assignments
Schedule FA is divided into asset-wise tables. The correct table depends on the nature of the asset, not just the platform name.
| Developer asset | Schedule FA table |
|---|---|
| Foreign bank account or depository account | Table A1: Foreign Depository Accounts |
| Upwork, Fiverr, Deel or similar foreign wallets | Table A2 as they works like a custodian account |
| Foreign brokerage accounts such as Schwab, Fidelity, Morgan Stanley, E*TRADE or Vested | Table A2: Foreign Custodian Accounts |
| Vested RSU shares, US stocks or foreign debt instruments | Table A3: Foreign Equity and Debt Interest |
| Foreign cash value insurance policy or annuity contract | Table A4 |
| SAFE, advisory equity, voting rights, partnership interest or financial interest in a foreign entity | Table B |
There are a lot more tables. But, for developers, the relevant tables are A1, A2, A3 and B.
Currency conversion using SBI TTBR
Schedule FA conversion is different from normal professional income conversion.
For Schedule FA, foreign balances and asset values must be converted into Indian rupees using the SBI Telegraphic Transfer Buying Rate (SBI TTBR).
Here are the relevant dates based on the item being reported.
| Item reported in Schedule FA | SBI TTBR date |
|---|---|
| Peak balance in a foreign account | Date on which the peak balance occurred |
| Closing balance in a foreign account | December 31 of that year |
| Initial Value of foreign investment | Date of investment |
| Foreign equity or debt value | Value of equity and debt value as on December 31 |
| Foreign-source income | Date on which the income is received or credited to foreign account/wallet |
Example:
A developer had an Upwork balance of USD 6,000 on August 10, 2025, and that was the highest balance during the calendar year. For Schedule FA, convert USD 6,000 using SBI TTBR for USD on August 10, 2025.
If the account balance was USD 500 on December 31, 2025, convert USD 500 using SBI TTBR on December 31, 2025 for closing balance reporting.
Keep proof of the rate used. Save the SBI TTBR rate sheet, screenshot or PDF in your tax folder. Do not mix this with professional income reporting.
Schedule FA mistakes can be expensive.
Remote Munshi helps Indian developers report foreign accounts and assets the right way.
Schedule FA, Schedule FSI, and Schedule TR: How they connect
Foreign reporting in the ITR has three connected parts.
1. Schedule FA
This is required under the Black Money Act. Schedule FA discloses the foreign asset. This includes Upwork, Fiverr, Deel, foreign bank accounts, foreign brokerage accounts, vested RSUs, US shares and signing authority. The reporting is to be done on a calendar year basis (Jan-Dec).
2. Schedule FSI
This is required under the Income Tax Act. Schedule FSI reports foreign-source income. This includes foreign client payments, foreign dividends, foreign bank interest and other income from foreign sources. The reporting is to be done on a financial year basis (April-March).
3. Schedule TR
This is also required under the Income Tax Act. Schedule TR is used to claim foreign tax credit where tax has been paid outside India (April-March).
Do not confuse these three.
- Schedule FA: To report to the Indian Government about what assets you hold outside India.
- Schedule FSI: To report to the Indian Government about your Income from sources outside of India.
- Schedule TR: To report to the Indian Government about Taxes you have paid outside of India.
Missed Schedule FA in the previous year? Here’s the exit route
The Finance Act, 2026 introduced the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026. This is also referred to as FAST-DS 2026.
It allows eligible taxpayers to declare specified foreign income or foreign assets for earlier years where the taxpayer failed to file the return, failed to disclose the foreign income or asset in the return, or where the income or asset escaped assessment.
For Indian developers, the scheme matters in two situations.
Category 1: Foreign income or unexplained foreign which asset was not reported
This covers foreign income and foreign assets that were not reported earlier. You are eligible if the value of unreported assets or Income is not more than Rs. 1 crores. Under this category:
- You pay 60% of the value of the undisclosed foreign asset or Income as on March 31, 2026
Important
If the misreporting happened 3 financial years ago or less , filing ITR-U costs almost the same in most cases. At the same cost, it is recommended that you file ITR-U as it is a simpler process.
For example, assume you did not report foreign income for Financial year 2023-24. We are currently in financial year 2026-27. For financial year 2023-24, the relevant assessment year will be 2024-25. In this case, the penalty for ITR-U will be 50% of the tax amount.
Assuming you fall under 30% slab rate and the unreported Income is Rs. 3,00,000, your total tax bill will be calculated as follows:
| Particulars | Amount |
|---|---|
| Unreported Income | Rs. 300000 |
| Basic tax on misreported Income (assuming 30% slab rate) | Rs. 90000 |
| Cess @ 4% (applicable on all tax payments) | Rs. 3600 |
| Interest on the missed payment (at 12% pa for 3 years) starting from 1st April 2024 (assuming you file the ITR on last day ie 31st March 2027) (36% of 93600) | Rs. 33696 |
| ITR=U penalty (50% of the additional tax + interest). (50% of 127296) | Rs. 63648 |
| Total payable to Income Tax department | Rs. 190944 |
| Total payment as percentage of Income | 63.64% |
Also, if your under reported Income is more than Rs. 1 crores, your only option is ITR-U.
Category 2: Income was taxed, but the foreign asset was not disclosed
For this category, you need to pay a fixed fee of ₹1 lakh. This option is available only if the total value of your foreign assets is ₹5 crore or less.
The scheme is not implemented yet, the date will be announced soon by the Central Government.
What protection does FAST-DS 2026 give?
Once you file the disclosure under the scheme and pay the fee, you get immunity under the scheme from:
- Prosecution
- Penalties under the Black Money Act for that disclosed asset and related income.
This disclosure scheme is available to taxpayers with undisclosed assets of less than Rs. 5 crores.
Consult with our tax experts at Remote Munshi
FAQs on Schedule FA for Indian software developers
My Upwork balance was zero by March 31. Do I still need to disclose it in Schedule FA?
Yes. Schedule FA follows the calendar year. A zero balance on March 31 does not remove disclosure where the account existed or had activity during the relevant period.
I use Section 44ADA presumptive taxation. Is ITR-4 enough if I have a balance in Upwork account?
No. A developer with Section 44ADA income and foreign assets should use ITR-3 and ensure Schedule FA is properly filled and filed along with the return.
My US client gave me vested RSUs worth $8,000. Is that below a threshold that exempts me from disclosure?
No. Even small amounts must be reported in Schedule FA. The less than ₹20 lakh rule only reduces penalties under the Black Money Act. Income tax act penalties will still apply.
I received payments directly into my Indian bank account through SWIFT. Is there anything to disclose in Schedule FA?
A SWIFT payment into your Indian bank account does not count as a foreign account or foreign income. You need to report Schedule FA only if you hold a foreign account or asset such as a Wise or Payoneer account, foreign shares, a brokerage account or signing authority abroad.
What is FAST-DS 2026?
FAST-DS 2026 is a scheme under the Finance Act, 2026. It lets you declare foreign income or assets you missed in earlier years, subject to limits and conditions.
Does a dormant US bank account opened during student days need Schedule FA reporting?
Yes, where you are Resident and Ordinarily Resident in India and the account existed during the relevant reporting period. A dormant foreign bank account still needs disclosure.
