FBAR and FATCA: Reporting Your Indian Bank Accounts

What H-1B workers and Indian immigrants need to know about mandatory disclosure of foreign financial accounts.

Overview

To combat offshore tax evasion, the U.S. enforces strict reporting of foreign assets through FBAR (Foreign Bank and Financial Accounts Report) and FATCA (Foreign Account Tax Compliance Act). Indian immigrants who have Indian bank accounts, PF balances, or investments must comply once they become U.S. tax residents.

For Indians Moving From India

As long as you remain a Nonresident Alien, FBAR and FATCA do not apply to you. The obligation begins the first year you become a Resident Alien for tax purposes. Use that transition year to get organized and understand what accounts you hold.

For Indians Already in the US

If the combined maximum balance of all your Indian accounts exceeds $10,000 at any point during the year, file an FBAR via FinCEN Form 114 (separate from your tax return, due April 15, extendable to October 15). Report NRE and NRO accounts, PPF, EPF, and any other foreign financial accounts.

Key Information

FBAR aggregate threshold is $10,000 across all accounts. FATCA (Form 8938) thresholds begin at $50,000 for single filers. NRE account interest, while tax-free in India, is fully taxable in the U.S. after you become a Resident Alien.

Requirements

FBAR via FinCEN Form 114 (filed online at BSA E-Filing System, not with your tax return). FATCA via Form 8938 attached to your federal tax return.

Common Mistakes

Thinking the $10,000 FBAR threshold applies per account. It is an aggregate limit across all foreign accounts. Three accounts with $4,000 each total $12,000 — all three must be reported.

Practical Tips

Penalties for missing FBAR filings start at $10,000 per violation per year. Keep a year-end spreadsheet tracking peak balances in all Indian accounts and provident funds.