Foreign Income Tax Filing — Report Right, Pay Smart
Indian residents earning abroad must disclose all global income & foreign assets in ITR-2. Claim DTAA relief via Form 67. TAXAJ CAs handle Schedules FA, FSI & TR — 1–2 working days.
File ITR-2 with Foreign Income
DTAA · Form 67 · Schedule FA · FSI · TR
- Foreign salary, interest, dividends, ESOP/RSU
- Foreign assets — Schedule FA (all accounts)
- DTAA relief — Form 67 filing
- Schedule FSI & TR in ITR-2
- e-Filing + ITR-V in 1–2 days
Step 1 — Know Your Status
Residential Status Checker — Which Category Are You?
Your tax liability on foreign income depends entirely on your residential status. Answer these questions to find out.
How many days did you stay in India during FY 2025-26?
Count from 1 April 2025 to 31 March 2026. Include day of arrival and departure.
For the 4 preceding years (FY 2021-22 to 2024-25), total days in India?
Also answer: In the last 10 years, were you a resident in at least 2 years? And did you stay 730+ days in the last 7 years?
| Residential Status | Indian Income Taxable? | Foreign Income Taxable? | Foreign Assets Disclosure (Schedule FA)? | ITR Form |
|---|---|---|---|---|
| Resident & Ordinarily Resident (ROR) | Yes — all Indian income | Yes — global income taxable | Mandatory | ITR-2 |
| Resident but Not Ordinarily Resident (RNOR) | Yes — all Indian income | Only if from India-controlled source | If held during ROR period | ITR-2 |
| Non-Resident (NR) | Yes — Indian-source income | Not taxable in India | Not required | NRI ITR-2 |
What You Must Report
Types of Foreign Income — Indian Tax Treatment
All foreign income must be converted to INR using SBI Telegraphic Transfer Buying Rate (TTBR) of the last day of the preceding month and reported under the correct head of income in ITR-2.
All foreign income must be converted to INR using the SBI TTBR of the last day of the month preceding the month in which income accrued. For example, if you earned USD salary in September 2025, use the TTBR rate of 31st August 2025. This rate is available on SBI’s website under “Forex Rates.” TAXAJ CAs apply the correct rate for each income transaction automatically.
ITR-2 Foreign Schedules
Schedule FA, FSI & TR — What You Must Fill
ITR-2 has three dedicated schedules for foreign income and assets. Non-disclosure attracts severe penalties under the Black Money Act.
- Foreign bank accounts (all — including dormant, joint, zero-balance)
- Immovable property outside India
- Foreign equity and debt interest (shares, bonds, MF units)
- Foreign insurance / annuity policies
- Foreign trusts, beneficial interests
- Any other capital asset outside India
- Foreign custodial accounts / demat accounts
- Country-wise income breakup
- Head of income (salary, HP, CG, other sources)
- Gross income in INR after TTBR conversion
- Income on which DTAA benefit is claimed
- TDS / withholding tax paid in foreign country
- Article of DTAA under which relief is claimed
- Country-wise foreign tax paid / withheld
- Tax credit claimed under DTAA or Section 90/91
- Corresponding Indian tax rate on same income
- Net tax credit = lower of Indian tax or foreign tax
- Balance Indian tax after foreign tax credit
Avoid Double Taxation
DTAA — Double Tax Avoidance Agreement
India has DTAAs with over 90 countries to prevent the same income from being taxed twice. If you paid tax abroad on income also taxable in India, DTAA lets you claim a credit or exemption.
Two methods of relief exist: the exemption method (income exempt in one country) and the tax credit method (pay tax in both but get a credit). To claim DTAA benefit, you must obtain a Tax Residency Certificate (TRC) from India and file Form 67 on the Income Tax portal.
- → Must be filed before filing ITR-2 (not simultaneously)
- → Requires: foreign tax paid certificate / TDS certificate from foreign payer
- → Country name, income type, DTAA article, foreign tax amount in INR
- → Credit limited to Indian tax on that income (not full foreign tax)
- → Even without DTAA, Section 91 allows unilateral credit for non-DTAA countries
TRC confirms your status as an Indian tax resident. Required to claim DTAA benefits. Indian residents apply via Form 10FA on the Income Tax portal; the department issues Form 10FB (TRC). Get TRC with TAXAJ →
Key DTAA Withholding Rates — India’s Major Treaties
| Country | DTAA Salary Rate | Key Note |
|---|---|---|
| 🇺🇸 USA | As per US tax brackets | DTAA Article 16 — employment income; Form W-2 as proof |
| 🇬🇧 UK | As per UK income tax | DTAA Article 15 — employment; P60/P45 as proof |
| 🇦🇪 UAE | NIL (UAE has no income tax) | No DTAA benefit needed — no UAE income tax; still report in India |
| 🇸🇬 Singapore | As per SG rates | DTAA Article 15; Singapore IR8A as proof |
| 🇩🇪 Germany | As per German tax brackets | DTAA Article 15; Lohnsteuerbescheinigung as proof |
| 🇦🇺 Australia | As per Australian rates | DTAA Article 15; Payment Summary / Income Statement |
| 🇨🇦 Canada | As per Canadian rates | DTAA Article 15; T4 slip as proof |
| Country | DTAA Withholding Rate on Interest | Key Note |
|---|---|---|
| 🇺🇸 USA | 10–15% | Article 11; Form 1099-INT as proof |
| 🇬🇧 UK | 10–15% | Article 11; annual interest statement |
| 🇸🇬 Singapore | 10% | Article 11; bank statement with withholding |
| 🇩🇪 Germany | 10% | Article 11; Kapitalertragsteuer certificate |
| 🇦🇺 Australia | 10–15% | Article 11; ATO withholding statement |
| 🇳🇱 Netherlands | 10% | Article 11 |
| 🇯🇵 Japan | 10% | Article 11 |
| Country | DTAA Withholding Rate on Dividend | Key Note |
|---|---|---|
| 🇺🇸 USA | 15–25% | Article 10; Form 1099-DIV as proof |
| 🇬🇧 UK | 10–15% | Article 10; dividend voucher as proof |
| 🇸🇬 Singapore | 10–15% | Article 10; CDP dividend statement |
| 🇩🇪 Germany | 10% | Article 10; Dividendenabrechnung |
| 🇫🇷 France | 10% | Article 10; relevé fiscal annual |
| 🇨🇭 Switzerland | 10% | Article 10; Verrechnungssteuer refund possible |
| 🇳🇱 Netherlands | 10% | Article 10 |
| Country | DTAA Rate on Royalties/Fees | Key Note |
|---|---|---|
| 🇺🇸 USA | 10–15% | Article 12; Form 1042-S as proof |
| 🇬🇧 UK | 10–15% | Article 13; WHT certificate |
| 🇩🇪 Germany | 10% | Article 12 |
| 🇸🇬 Singapore | 10% | Article 12 |
| 🇯🇵 Japan | 10% | Article 12; includes software royalties |
| 🇫🇷 France | 10% | Article 13 |
| 🇨🇦 Canada | 10–15% | Article 12; NR4 slip as proof |
Rates are indicative. Actual rates depend on specific DTAA article and taxpayer eligibility. Consult a TAXAJ CA for your specific case →
💱 Currency Converter — SBI TTBR Method
Enter your foreign income details. We use approximate reference rates for illustration — use actual SBI TTBR for filing.
Indicative estimates using reference rates. Use actual SBI TTBR from previous month-end for official filing.
How to Report Foreign Income in ITR-2
Step-by-Step Process
Determine residential status
Count India days for FY 2025-26 and preceding years. ROR = global income taxable. Use the checker above.
Convert income to INR
Use SBI TTBR of last day of month preceding income receipt. Get TRC if you want to claim DTAA relief.
File Form 67 BEFORE ITR
Submit Form 67 on the Income Tax portal with country, income amount, DTAA article, and foreign tax paid. CA handles this.
Fill Schedules FA, FSI, TR
In ITR-2 — declare all foreign assets (FA), income per country (FSI), and tax credit claimed (TR).
File ITR-2 & verify
e-File on the Income Tax portal. Verify via Aadhaar OTP. ITR-V acknowledgement emailed within 1–2 days.
Non-Compliance Risks
Penalties for Not Disclosing Foreign Income & Assets
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has severe penalties for non-disclosure.
❌ Undisclosed Foreign Asset
30% flat tax on undisclosed foreign income/assets (no deductions, no slab benefits) + 90% penalty = effectively 3x the tax. The Black Money Act 2015 applies on top of the Income Tax Act.
⚠️ Failure to Fill Schedule FA
Penalty of ₹10 lakh under Section 43 of the Black Money Act for failure to disclose foreign assets in Schedule FA of ITR-2. Applies even if the asset generated no income — all foreign assets must be disclosed.
📋 Not Filing Form 67
If Form 67 is not filed before the ITR due date, you cannot claim foreign tax credit — even if DTAA applies. This means paying full Indian tax on income already taxed abroad. TAXAJ ensures Form 67 is filed first.
🔴 Prosecution
The Black Money Act 2015 provides for rigorous imprisonment of 3–10 years for wilful concealment of foreign income or assets. The law applies to all ROR individuals — Indian and foreign nationals residing in India.
TAXAJ CAs have handled hundreds of foreign income cases — US employees with RSU/ESOP, UK residents with India property, UAE-based Indian professionals. We ensure complete disclosure, correct DTAA application, and maximum tax credit. Get started today →
Who Should File
Who Needs This Service?
FAQ
Frequently Asked Questions on Foreign Income Tax
1. At vesting/exercise: The difference between FMV on exercise date and exercise price is taxable as perquisite under salary. The employer should deduct TDS; if not, you must pay advance tax. Declare in Schedule FA and FSI.
2. At sale: The difference between sale price and FMV on exercise date is capital gains — STCG (listed company, held ≤12 months) at 20% or LTCG at 12.5%. Declare shares in Schedule FA from grant date. Foreign withholding on sale can be claimed via Form 67.
File Foreign Income ITR-2 — Correctly & On Time
TAXAJ CAs handle Schedule FA, FSI, TR, Form 67, and DTAA relief — so you disclose everything legally and pay only what you owe.