Form 8938 for Indian Assets

Form 8938, the Statement of Specified Foreign Financial Assets, is filed with your income tax return when your foreign assets pass certain thresholds. It comes from the Foreign Account Tax Compliance Act (FATCA). Treasury lists India as having a FATCA intergovernmental agreement in force since August 31, 2015, so information about U.S. persons' accounts in India can reach the IRS. This page explains how the form applies to people with Indian accounts, funds, shares, pensions and businesses.

Thresholds for tax year 2025

You count as living abroad only if you are a U.S. citizen who is a bona fide resident of a foreign country for a full tax year, or a U.S. citizen or resident who spent at least 330 full days outside the United States in a 12-month period ending in the tax year. Most H-1B holders and green card holders living in Illinois use the U.S. thresholds. These are the amounts on IRS.gov for tax year 2025; confirm them before filing a 2026 return.

Who files

Specified individuals include U.S. citizens, resident aliens for any part of the year (green card holders and people who pass the substantial presence test), and nonresident aliens who choose to be treated as residents for a joint return. You do not file if you have no income tax return to file. If you are dual-status, the instructions explain the rules for the nonresident part of the year. See the residency rules.

Form 8938 is attached to your return and due when the return is due, including extensions. If you leave it out by mistake, the IRS says to file Form 1040-X with the form attached.

What Indian assets are reported

Generally reported if you are over the threshold:

• Indian savings, NRE, NRO, FCNR and deposit accounts (the account is listed, not each item inside it).
• Indian mutual fund units held directly, which the IRS lists as reportable foreign mutual funds.
• Shares of Indian companies held outside an account, and interests in an Indian company, LLP or partnership.
• Life insurance or annuity contracts issued in India that have a cash value.
• Interests in an Indian pension or deferred compensation plan, and in an Indian estate or trust. Ask for a review of provident fund balances before assuming they are excluded.

Generally not reported:

• Real estate you own directly, including a personal residence or rental flat. If the property is held through a company or trust, your interest in that entity is reported instead.
• Foreign currency you hold yourself, and directly held gold, jewelry, art or other collectibles.
• A safe deposit box, and rights to a foreign equivalent of Social Security.

How to value the assets

Use fair market value, in rupees first and then converted to dollars using the exchange rate on the last day of the tax year. The IRS says to use the Treasury rate generally; if none is available you may use another public rate and disclose it. For accounts you may rely on periodic statements unless you know they are not a reasonable estimate of the maximum value. The threshold test uses both the year-end value and the maximum value during the year.

Overlap with other forms

Assets already reported on Forms 3520, 3520-A, 5471, 8621, 8865 or 8891 count toward the threshold, but the IRS does not require you to list them again on Form 8938. Indian mutual funds usually involve Form 8621, and Indian companies and partnerships can involve Forms 5471 and 8865.

Penalties and the statute of limitations

Under the current instructions, the penalty for not filing a complete and correct form is $10,000. If the failure continues for more than 90 days after an IRS notice, additional penalties can reach $50,000. An understatement of tax tied to an undisclosed asset can carry a 40 percent penalty. No penalty applies if you show reasonable cause. The time the IRS has to assess tax can stay open until three years after you file the form, and is six years if you omit more than $5,000 of income tied to a specified foreign asset. See Form 8938 penalties.

How we can help

We total your Indian accounts and investments, decide which forms apply, prepare Form 8938 with your return and, where earlier years were missed, help you review correction options. See international tax services.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.