FBAR and FATCA for US NRIs: reporting NRE, NRO and India FD accounts to the IRS
US citizens and Green Card holders with Indian financial accounts (NRE, NRO, FDs, demat) must report them annually via FBAR (FinCEN Form 114) if aggregate value exceeds USD 10,000 and via FATCA Form 8938 if total foreign assets exceed USD 200,000 (overseas filer threshold). These are separate reporting obligations — both must be filed independently. Penalties for failure are severe: up to USD 10,000 per violation for FBAR non-willful and up to 50% of account balance per year for willful violations.
FBAR due April 15 (auto-extension Oct 15) — NRE and NRO accounts are both reportable
If you are a US person (citizen, Green Card, resident alien) with Indian bank accounts and the aggregate maximum value exceeded USD 10,000 at any point in the year, you must file FBAR (FinCEN Form 114) by April 15. NRE, NRO, and India FD accounts are all reportable. Separately, if your total foreign financial assets exceed USD 200,000 (for overseas filers), file Form 8938 with your 1040. Both are required — filing one does not satisfy the other.
Key points
- FBAR: aggregate > $10,000 at any point in year — FBAR (FinCEN 114) requires reporting if NRE + NRO + FD + demat accounts had a combined maximum of more than USD 10,000 at any single day during the year.
- Form 8938 FATCA: overseas threshold $200,000 — FATCA Form 8938 is due with your 1040 — threshold for overseas filers is USD 200,000 at year-end or USD 300,000 at any point. Includes mutual funds and demat value.
- Penalty severity: up to 50% of balance for willful — FBAR willful non-disclosure: penalty up to 50% of the account balance per year. Non-willful: up to $10,000 per violation. Criminal penalties apply for egregious cases.
Which India accounts must be reported
NRE savings account: Yes — even though interest is exempt from India tax, it is a foreign financial account reportable for FBAR and FATCA.
NRO savings account: Yes — always reportable.
India FD (fixed deposits): Yes — both NRE FDs and NRO FDs are reportable. Report the peak balance.
NRI demat account: Yes — for Form 8938 FATCA (demat is a 'financial account'). For FBAR, Indian demat accounts at brokers must also be reported.
India mutual funds: Yes for Form 8938 (foreign mutual fund is specified foreign financial asset). FBAR: the mutual fund account at the AMC/broker may be reportable depending on account structure.
EPF (Employees' Provident Fund): generally reportable for FBAR as a foreign financial account. IRS has provided limited guidance but the consensus is: report it.
How to file FBAR and Form 8938
FBAR: File online at BSA e-Filing (FinCEN website). Use FinCEN Form 114. Report the maximum value during the year in USD. Deadline: April 15, with automatic extension to October 15 (no form needed to claim extension).
Form 8938: Filed with your 1040 tax return. Part I: foreign financial accounts. Report NRE/NRO at year-end fair market value. Part II: other specified foreign financial assets (India mutual funds, unlisted shares). Deadline aligns with your 1040 deadline (April 15 or June 15 for overseas filers).
Frequently asked questions
If I file Form 8938, do I still need to file FBAR?
Yes. FBAR and Form 8938 are separate legal requirements with different thresholds, forms, and filing locations. Filing one does not satisfy the obligation for the other.
My NRE FD is tax-free in India. Do I still report it?
Yes. The tax-exempt status in India is irrelevant to US reporting obligations. FBAR and FATCA are foreign account disclosure requirements, not tax computation forms. Any foreign financial account exceeding the threshold must be reported.
What if I forgot to file FBAR in prior years?
Use the IRS Streamlined Filing Compliance Procedures (SFCP) or the Delinquent FBAR Submission Procedures — designed to allow non-willful non-filers to catch up with reduced or no penalties. Do not delay: continuing non-compliance increases the risk of willful classification.