Schedule FA · the penalty for non-disclosure
What is the penalty for not reporting a foreign asset?
Section 43 of the Black Money Act carries a ₹10 lakh penalty for failing to disclose a foreign asset — and it can apply even where no tax was evaded. Here is what the section says, what the ₹20 lakh de-minimis does and does not exempt, and why a traceable Schedule FA is the cheapest insurance against it.
The rule
Section 43 of the Black Money Act
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 governs foreign-asset disclosure by Indian residents. Section 43 provides for a penalty of ₹10 lakh where a resident and ordinarily resident taxpayer fails to disclose a foreign asset — including foreign equity such as US RSUs and ESPP shares held with a broker — in the Schedule FA of their income-tax return.
The point most people miss
This penalty is for the non-disclosure itself. It can be levied even when the taxpayer paid every rupee of tax due and evaded nothing — the default being penalised is the failure to report the asset, which is a separate obligation from the tax on any income it produced.
The carve-out
The ₹20 lakh de-minimis — and its limits
The Finance (No. 2) Act, 2024 added a de-minimis threshold, effective 1 October 2024: the Section 43 penalty does not bite where the aggregate value of the undisclosed foreign assets — other than immovable property — stays within ₹20 lakh. (This replaced an earlier, narrower ₹5 lakh threshold that applied only to foreign bank balances.)
What it exempts
The ₹10 lakh penalty, where the undisclosed movable foreign assets aggregate to ₹20 lakh or less. Below the line, a missed disclosure is not penalised under Section 43.
What it does NOT exempt
The duty to report. Schedule FA must still be filed for any foreign asset held during the year, whatever its value. The carve-out is a shield against the penalty, not a permission to leave the asset off the return. Immovable property is excluded from the threshold altogether.
Don't conflate them
Reporting and tax are two different questions
“Under ₹20 lakh, so no penalty” and “under ₹20 lakh, so no need to report” are not the same statement — only the first is correct. Schedule FA is a disclosure obligation: you list the asset whether or not it earned income and whether or not it crosses any threshold. The tax on foreign income, and any penalty for evading that tax, are separate machinery. Treating the de-minimis as a reporting exemption is exactly how a fully-tax-paid filer still ends up with a defective return. When in doubt about your own numbers, confirm the current thresholds with your chartered accountant.
How we help
A Schedule FA a reviewer can defend
The cheapest protection against a non-disclosure penalty is a complete, traceable disclosure. GetScheduleFA builds one from your Charles Schwab or Interactive Brokers statements: one Table A3 row per purchase lot, each figure converted at the State Bank of India TT-buying rate for its own date, with the rate date and statement line behind every rupee so a chartered accountant can check it rather than take it on trust. Peak values are computed on daily market closes. Anything that cannot be sourced is flagged with the reason, never estimated — because a guessed figure is its own kind of exposure.
See the full method for how each number is derived, or a finished sample workpaper for what the disclosure looks like.
Report the asset. Every year, whatever the value.
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