FBAR & FATCA Explained: Reporting Indian Accounts to the IRS
Hold bank accounts, FDs, PPF, or mutual funds in India? Here are the exact filing thresholds, deadlines, forms, and penalties — plus how to fix missed years.
Priya Nair
June 1, 2026 · 11 min read
If you've moved to the US and still hold money in India — a savings account, a fixed deposit, PPF, mutual funds, or even a joint account with your parents — the US government wants to know about it. Two separate reporting regimes, FBAR and FATCA, exist precisely to surface foreign assets held by US taxpayers. They're not taxes; they're disclosures. But ignoring them carries some of the harshest penalties in the entire tax code, and "I didn't know" is not a defense. The reassuring part: once you understand the thresholds, compliance is genuinely straightforward.
In a nutshell
File an FBAR (FinCEN Form 114) if your foreign accounts combined crossed $10,000 at any point in the year. File FATCA (Form 8938) with your tax return if your foreign assets exceed $50,000 (single) or $100,000 (married filing jointly) at year-end — higher if you live abroad. Both are disclosures, not taxes. Penalties are severe, but voluntary disclosure through the Streamlined Procedures cleans up missed years cheaply.
Key takeaways
- FBAR threshold: $10,000 aggregate across all foreign accounts, measured at the highest balance during the year — not a per-account limit.
- FBAR is filed separately to FinCEN, not with your 1040; it's free and online.
- FATCA (Form 8938) kicks in at higher thresholds and is filed with your tax return.
- Reportable assets include savings, FDs, PPF, NRE/NRO accounts, mutual funds, Demat holdings, and cash-value insurance.
- Willful failure can cost the greater of ~$160,000 or 50% of the account balance, per year.
- Missed prior years? The Streamlined Filing Compliance Procedures let non-willful filers catch up with little or no penalty.
What is the FBAR?
FBAR stands for Foreign Bank Account Report, officially FinCEN Form 114. It's a disclosure of every foreign financial account you own or have signature authority over, filed with the Treasury's Financial Crimes Enforcement Network (FinCEN) — completely separate from your income tax return.
The trigger is simple but often misread: you must file if the combined maximum balance of all your foreign accounts exceeded $10,000 at any single point during the calendar year. It is not $10,000 per account, and it is not the year-end balance.
- One account that peaked at $15,000 → file.
- Three accounts that peaked at $4,000 each ($12,000 combined) → file.
- An account that briefly held $11,000 from a property sale before you moved it → file.
"Signature authority" matters too. A joint account with your parents where you can sign? Reportable. An account purely in your parents' names? Not yours to report.
What is FATCA (Form 8938)?
FATCA — the Foreign Account Tax Compliance Act — requires Form 8938, filed with your Form 1040. It overlaps with FBAR but has higher thresholds that depend on your filing status and where you live:
| Filing status | Living in the US | Living abroad |
|---|---|---|
| Single | $50,000 year-end / $75,000 any time | $200,000 / $300,000 |
| Married filing jointly | $100,000 / $150,000 | $400,000 / $600,000 |
Because FBAR's bar ($10,000) is so much lower, most newcomers hit FBAR first and only deal with Form 8938 once their Indian assets grow. Many people who must file FBAR don't yet need Form 8938 — but if you cross both, you file both.
What counts as a reportable account?
Almost anything you can convert to cash:
- Savings and checking accounts, including NRE and NRO accounts.
- Fixed deposits (FDs) and recurring deposits.
- PPF (Public Provident Fund) — yes, it counts.
- Mutual funds and Demat/brokerage holdings. (These also raise the separate PFIC problem — read that before you keep Indian mutual funds.)
- Cash-value or investment-linked insurance policies (e.g., ULIPs, certain LIC plans).
- Pension and provident-fund balances in many cases.
Deadlines
- FBAR: due April 15, with an automatic extension to October 15 — no form needed for the extension. Filed online through the BSA E-Filing System.
- Form 8938: due with your tax return (April 15, or October 15 if you extend the 1040).
The two are independent filings even though the dates align — filing one does not satisfy the other.
The penalties (why this matters)
This is where casual neglect gets expensive:
- Non-willful FBAR violation: up to roughly $16,000 per violation (inflation-adjusted), and the Supreme Court's *Bittner* decision (2023) limited this to per-report, not per-account — a meaningful relief.
- Willful violation: the greater of ~$160,000 or 50% of the account balance, per year, plus potential criminal exposure.
- Form 8938: $10,000 for failure to file, rising up to $50,000 for continued failure after IRS notice.
Important: FBAR and FATCA are disclosures, not taxes — filing them does not, by itself, create a tax bill. The income from those accounts (interest, gains) is taxed separately, with double-taxation relief via the DTAA. The penalties above are purely for *not reporting*, which is what makes ignoring them so irrational.
Already missed a year? Use the Streamlined Procedures
If you didn't file FBARs in prior years because you simply didn't know, you are likely non-willful — and the IRS's Streamlined Filing Compliance Procedures are designed for exactly you. They let you file the missing FBARs and amended returns with no penalty (for those living abroad) or a reduced 5% penalty (for those in the US), provided your failure was non-willful. Coming forward voluntarily is dramatically cheaper than being found. Do not wait for a letter.
Your action checklist
- List every Indian account you own or can sign on, including PPF, FDs, NRE/NRO, mutual funds, and Demat.
- Pull statements and record the highest balance each account hit during the year.
- Convert to USD using the Treasury's year-end exchange rate.
- If the combined peak crossed $10,000, file the FBAR via BSA E-Filing by October 15.
- If you cross the Form 8938 thresholds, attach it to your tax return.
- Missed prior years? Talk to an NRI-focused CPA about the Streamlined Procedures.
Frequently asked questions
Do I owe tax just for having money in India?
No. FBAR and FATCA are reporting forms, not taxes. You owe US tax only on the income those accounts generate (interest, dividends, gains), and the DTAA prevents you from being taxed twice.
Is PPF reportable on the FBAR?
Yes. PPF is a foreign financial account and counts toward the $10,000 FBAR threshold and, if applicable, Form 8938.
My account only briefly touched $10,000 — do I still file?
Yes. FBAR uses the highest balance at any point in the year, not the year-end balance. A brief spike above the combined $10,000 still triggers the requirement.
What if my accounts are joint with my parents in India?
If you have signature authority or ownership, report your interest in the account. An account solely in your parents' names, which you can't access, is not yours to report — though gifts you later receive may trigger Form 3520.
Can I file the FBAR myself?
Yes — it's free on the BSA E-Filing System and many people do it themselves. If you have many accounts, PFIC mutual funds, or missed prior years, a CPA is worth the few hundred dollars.
The bottom line
FBAR and FATCA feel bureaucratic until you see the penalty schedule — then they feel terrifying. The fix is simple: disclose. List your accounts, check whether the combined peak crossed $10,000, file the FBAR by October 15, add Form 8938 if you cross its higher bar, and use the Streamlined Procedures to clean up any missed years. The IRS wants visibility, not your savings. Give it the disclosure and you'll never lose sleep over this again.