FBAR for Indians in the USA: Who Must File, Deadline and Penalties

What is the FBAR?

FBAR stands for Report of Foreign Bank and Financial Accounts. It is a yearly report, filed as FinCEN Form 114, that lists your accounts outside the United States and the highest balance each one reached during the year.

The FBAR is a disclosure only — it does not add any tax. But the penalties for not filing can be large, which is why it matters so much for Indian families who keep savings, deposits or investments back home.

Who must file an FBAR?

You must file if both of these are true:

• You are a U.S. person: a U.S. citizen, a green card holder, or a resident alien for tax purposes. Many people on H-1B, L-1 or H-4 visas become tax residents by meeting the substantial presence test.
• The total of the highest balances of all your foreign financial accounts was more than $10,000 at any time during the calendar year.

The $10,000 is the combined total, not per account. Three accounts with $4,000 each at their peak add up to $12,000 — so you must file, and you report all three.

Which Indian accounts count?

Almost any account held with a financial institution outside the U.S. counts, including accounts in your name alone, joint accounts, and accounts where you only have signing authority. Common examples for Indian families:

• NRO, NRE and FCNR accounts, and old resident savings accounts
• Fixed deposits and recurring deposits
• Demat and brokerage accounts
• Mutual fund accounts
• Joint accounts with parents — report the full balance, not just your share
• Accounts you can operate for someone else (for example a parent's account where you hold a mandate)
• Insurance policies with a cash or surrender value

Some items — such as PPF, EPF and certain pension schemes — need a closer look at how the account is held. If you are unsure, list it for us and we will tell you how it should be reported.

When is the FBAR due and how is it filed?

• Due date: April 15 for the previous calendar year.
• Automatic extension: to October 15 — you don't need to request it.
• Where: electronically through FinCEN's BSA E-Filing System. It is not mailed with your Form 1040.

For each account you report the bank name and address, account number, type, and the maximum value during the year. Balances in rupees are converted to dollars using the U.S. Treasury's exchange rate for the last day of the year.

What are the penalties?

Penalties depend on whether the failure was non-willful (an honest mistake) or willful:

• Non-willful: up to $10,000 per violation, adjusted each year for inflation. In 2023 the U.S. Supreme Court (Bittner v. United States) ruled that this penalty applies per report, not per account.
• Willful: up to the greater of $100,000 (inflation-adjusted) or 50% of the account balance, and possible criminal penalties.

The good news: people who simply didn't know about the FBAR usually have safe ways to become compliant — before the IRS contacts them.

Missed FBARs in past years? What to do

Don't just start filing this year and ignore the past. The IRS has specific procedures for late filers, and choosing the right one matters:

• Delinquent FBAR submission procedures — for people who reported all their income (for example Indian interest) on their U.S. returns but didn't file FBARs.
• Streamlined filing compliance procedures — for people who also missed income on their returns, where the failure was non-willful.

Which one fits depends on your facts. We review your history, prepare the missing FBARs and any amended returns, and file them the right way.

FBAR is not the only form — check Form 8938 and your income

Depending on your total foreign assets, you may also need Form 8938 (FATCA), which is filed with your tax return. And interest earned in India — including NRE interest that is tax-free in India — is generally taxable income on your U.S. return. Indian mutual funds can bring extra reporting as well. See our guide on FBAR vs FATCA for the difference.