⚠️ Not tax or legal advice. FBAR + FATCA penalties are severe (up to 50% of account value per violation for willful non-filing). Consult a licensed CPA + tax attorney for your specific situation. Verify current rules on irs.gov + bsaefiling.fincen.treas.gov.
US-based NRIs are subject to two distinct foreign-asset reporting regimes: FBAR (via Treasury) and FATCA (via IRS). Indian bank accounts (NRE, NRO, FCNR), mutual funds, real estate, and other foreign investments trigger reporting obligations at specific thresholds. Failing to file carries severe civil + criminal penalties — up to 50% of account value per violation for willful non-filers, plus $10K+ per non-willful violation. This 2026 guide walks through what to file, thresholds, and how to catch up if you missed prior years.
FBAR (Report of Foreign Bank and Financial Accounts)
What FBAR is
- Filed with FinCEN (Financial Crimes Enforcement Network) via Form 114 (FinCEN 114 / FBAR)
- Required if aggregate value of all foreign accounts exceeds $10,000 at ANY point during the calendar year
- Filed ONLINE only via BSA E-Filing System
- Due date: April 15 of following year (automatic extension to October 15 if missed)
- Does NOT go on IRS tax return
Who must file FBAR
- US persons: US citizens, permanent residents (green card), residents meeting substantial presence test
- Foreign account signature authority or ownership
- Threshold: aggregate value exceeds $10,000 at any single moment in the year (not year-end)
What accounts must be reported
- NRE + NRO + FCNR bank accounts in India
- Indian brokerage accounts (Zerodha, Upstox, ICICI Direct)
- Indian mutual fund folios (via SBI, HDFC, ICICI Prudential, etc.)
- Employer PPF / EPF accounts in India
- Life insurance policies with cash surrender value
- Any foreign financial account where you have signature/ownership
FATCA (Foreign Account Tax Compliance Act) — Form 8938
What FATCA / Form 8938 is
- Filed with IRS as part of Form 1040 tax return
- Higher thresholds than FBAR
- Reports foreign financial assets (including real estate through structured entities)
Thresholds (as of 2024 rules; verify current)
- Single filers living in USA — Aggregate foreign assets exceeding $50,000 at end of year OR $75,000 at any time during year
- Married filing jointly in USA — $100K end / $150K anytime
- Single filers living abroad — $200K end / $300K anytime
- Married filing jointly abroad — $400K end / $600K anytime
FBAR vs FATCA Comparison
| Feature | FBAR (FinCEN 114) | FATCA (Form 8938) |
|---|---|---|
| Filed with | Treasury (FinCEN) | IRS (part of 1040) |
| Threshold | $10K aggregate | $50K single US / $200K single abroad |
| Timing | Any moment in year | End of year + anytime |
| Includes real estate | Only via account | Yes, if held via foreign entity |
| Penalty (non-willful) | $10K per violation | $10K per violation + accuracy penalty |
| Penalty (willful) | Greater of $100K or 50% of account balance | Criminal + civil penalties |
| Due date | April 15 (auto extension Oct 15) | Same as Form 1040 (April 15) |
Penalty Structure
FBAR non-willful (unintentional)
- Up to $10,000 per violation per year
- Recent Supreme Court ruling: penalty is per FBAR form, not per account (Bittner v. US, 2023)
- Statute of limitations: 6 years from due date
FBAR willful (intentional)
- Greater of $100,000 OR 50% of account balance at time of violation
- Criminal penalties: fines up to $500,000 + up to 10 years prison
FATCA Form 8938
- Failure to file: $10,000 per year + additional $10,000 per 30 days of non-filing (up to $50,000)
- Understatement penalty: 40% of tax attributable to undisclosed foreign asset
- Statute of limitations extended to 6 years for substantial income omissions
How to File FBAR (Step-by-Step)
- Gather all foreign account statements for the year
- Identify highest single-day balance in each account (in USD, use Treasury exchange rate)
- Go to bsaefiling.fincen.treas.gov
- Register + file Form 114 online
- Report: account number, financial institution name + address, account type, maximum value
- Submit before April 15 (automatic extension to October 15 if missed)
- Save confirmation for records
How to File Form 8938
- Compile foreign financial asset details (accounts, values, income earned)
- Include Form 8938 as attachment to Form 1040
- Report on Form 8938: account/asset info, maximum value, income earned
- File by regular Form 1040 due date (April 15, extension October 15)
Streamlined Foreign Offshore Procedures (Catch-up for Missed Filings)
If you missed FBAR/FATCA filings due to non-willful reasons (didn't know about the requirement), the IRS Streamlined Foreign Offshore Procedures allow catch-up:
- File 6 years of delinquent FBARs
- File 3 years of amended Form 1040 with Form 8938
- Pay any taxes + interest owed on undisclosed foreign income
- NO penalty if you qualify (much lower than standard non-willful penalties)
- Certify non-willfulness under penalty of perjury
Streamlined Filing has strict eligibility rules — consult a tax attorney before pursuing.
Key Considerations for NRIs
Indian rupee to USD conversion
Use the Treasury's year-end exchange rate for each currency. Available at fiscal.treasury.gov.
PPF/EPF are reportable
Indian PPF (Public Provident Fund) + EPF (Employee Provident Fund) accounts are reportable on FBAR + potentially FATCA. Value = balance at highest point in year.
Real estate + FATCA
Directly-owned foreign real estate is NOT reported on Form 8938. If held through a foreign entity (LLC, trust), the entity IS reportable.
Mutual funds — PFIC issues
Indian mutual funds may be classified as Passive Foreign Investment Companies (PFICs) with punitive tax treatment. Consult a specialized tax attorney if you hold Indian mutual funds — filing Form 8621 may be required.
Spouse's accounts
Joint accounts count for BOTH spouses' thresholds. Married filing jointly can combine on FBAR + Form 8938.
Best Practices for NRIs
- Maintain a spreadsheet of all Indian financial accounts with balances
- Track highest balance in each account annually
- File FBAR by April 15 every year (even if $0 tax owed on foreign income)
- Include Form 8938 with 1040 when thresholds are met
- Report all foreign interest, dividends, capital gains on 1040 with foreign tax credit
- Hire a CPA experienced with NRI/international tax
- Consider streamlined amnesty if you have missed prior years
Related NRI Globe Coverage
- NRE / NRO / FCNR Accounts 2026 — Complete NRI Banking Guide
- NRI Income Tax Filing India 2026-27
- India Real Estate NRI Compliance 2026 — FEMA + RBI + Tax
- Rupee vs Dollar Sept 2026 — NRI Impact Guide
- Sending Money to India 2026 — Wise vs Remitly vs Bank Wire
Frequently Asked Questions
What is FBAR and who must file it?
FBAR (FinCEN 114) is a Treasury report of foreign financial accounts. Any US person (citizen, green card holder, or resident) with aggregate foreign accounts exceeding $10,000 at any point during the year must file FBAR by April 15 (auto extension to October 15).
What are the thresholds for Form 8938 (FATCA)?
Single filers living in USA: $50K end-of-year OR $75K anytime. Married jointly in USA: $100K end / $150K anytime. Single filers abroad: $200K / $300K. Married jointly abroad: $400K / $600K. Verify current thresholds at irs.gov.
Are NRE + NRO accounts reportable on FBAR + Form 8938?
Yes. Both NRE and NRO accounts are foreign financial accounts that must be reported on FBAR (if aggregate exceeds $10K) and on Form 8938 (if you exceed the applicable threshold). Report highest balance in the year.
What are the penalties for missing FBAR?
Non-willful: up to $10,000 per violation (per FBAR form per Supreme Court ruling in Bittner v. US, 2023). Willful: greater of $100,000 or 50% of account balance + criminal penalties (fines up to $500,000 + up to 10 years prison).
What is Streamlined Foreign Offshore Procedures for catching up on missed FBAR?
An IRS program allowing non-willful non-filers to catch up on 6 years of FBARs + 3 years of amended 1040 with Form 8938, paying only tax + interest owed on unreported foreign income — no penalties. Strict eligibility rules; consult a licensed tax attorney.
Disclaimer: NRI Globe provides journalism and general information only. Not tax, legal, or financial advice. FBAR + FATCA rules are complex + carry severe penalties; consult a licensed CPA + tax attorney for your specific situation.