FBAR Filing Guide for NRIs: Complete FinCEN 114 Requirements

The FBAR is not a tax form — it is an information return filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury. It exists under the Bank Secrecy Act (BSA) of 1970, originally designed to combat money laundering, tax evasion, and the financing of criminal activity through offshore accounts.

The FBAR requires any US person with a financial interest in, or signature authority over, one or more foreign financial accounts to report those accounts if the aggregate maximum value of all foreign accounts exceeds $10,000 at any point during the calendar year.

### Who Is a "US Person" for FBAR Purposes?

A US person includes:

• US citizens (including dual citizens living in India)
• US residents — anyone who meets the Substantial Presence Test or holds a green card
• H-1B, H-4, L-1, L-2, O-1 visa holders who are US tax residents
• F-1/J-1 visa holders who have exceeded their exempt individual period and become resident aliens
• US-domiciled trusts and entities

Important: Even if you file a US tax return as a non-resident alien (Form 1040-NR), the FBAR rules apply independently. Some non-residents who do not meet the SPT but have green cards are still US persons for FBAR purposes.

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The $10,000 threshold is misunderstood more than any other aspect of FBAR compliance. Here is how it works:

1. It is an aggregate threshold. You add the maximum balance of every foreign account you hold during the year. If the combined total exceeds $10,000 at any point, you must report all foreign accounts — not just the ones that individually exceed $10,000.

1. It uses the maximum balance during the year, not the year-end balance. If your NRE account held Rs. 9,00,000 in March and you withdrew most of it by December, the March balance is what counts.

1. It includes accounts where you have signature authority, even if you do not own the account. If you are a joint holder on your parents' account in India, that account counts.

1. The conversion rate is the Treasury Department's official year-end exchange rate (published at fiscaldata.treasury.gov). For 2025, use the December 31, 2025 rate.

### Quick Example

In this example, the aggregate exceeds $10,000, so all four accounts must be reported on the FBAR — including the NRE savings that individually held only $4,100.

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Almost every financial account you hold in India is reportable. Here is the complete list:

### Accounts That Must Be Reported

• NRE Savings Accounts — Yes, even though the interest is tax-exempt in India
• NRO Savings Accounts
• NRE and NRO Fixed Deposits (FDs) — Each FD is a separate account. If you have 5 FDs, you report 5 accounts.
• Public Provident Fund (PPF) — Reportable as a foreign financial account
• Employee Provident Fund (EPF) — The IRS has not issued definitive guidance, but best practice is to report it. Many tax practitioners treat EPF as a foreign financial account, and reporting it protects you from penalties.
• National Pension System (NPS) — Reportable; it is a financial account held with a foreign financial institution
• Mutual Fund Folios — Each folio number is a separate account. If you hold 8 mutual fund folios across AMCs, you report 8 accounts.
• Demat / Brokerage Accounts — Your Zerodha, Groww, or ICICI Direct demat account is a foreign financial account
• Life Insurance Policies with Cash Value — LIC endowment plans, ULIPs, and money-back policies with a cash surrender value are reportable. Pure term life policies with no cash value are generally not reportable.
• Post Office Savings Accounts (NSC, KVP, Sukanya Samriddhi)

### Accounts That Are NOT Reportable

• Real estate held in India (not a financial account)
• Gold or jewelry (physical assets, not accounts)
• Correspondent or nostro accounts held by a US financial institution at a foreign bank

### The PPF and EPF Debate

The IRS has not issued specific guidance classifying PPF or EPF for FBAR purposes. However, the FinCEN definition of "financial account" is broad — it includes any account maintained with a financial institution. Since PPF is maintained by banks or post offices and EPF is maintained by EPFO (a government trust that functions like a financial institution), the conservative and recommended approach is to report both. The cost of reporting is zero; the cost of not reporting can be $10,000+ per account per year.

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The FBAR is filed electronically through the BSA E-Filing System at bsaefiling.fincen.treas.gov. It cannot be filed on paper.

### Step-by-Step Process

1. Go to the BSA E-Filing website and select "File FinCEN Report 114"
2. Enter your information: Name, SSN/ITIN, date of birth, address
3. For each foreign account, provide:

• Type of account (bank, securities, or other)
• Name and address of the foreign financial institution
• Account number
• Maximum account value during the year (in USD)
• Whether you have sole or joint interest

1. Sign electronically and submit
2. Save your confirmation — FinCEN provides a BSA ID and confirmation number. Keep this for your records.

### Filing Through a Tax Professional

If your tax preparer files the FBAR on your behalf, they will use FinCEN Form 114a (Record of Authorization to Electronically File FBARs) to obtain your authorization. You do not submit Form 114a to FinCEN — it is retained in your records.

### What If You Have More Than 25 Accounts?

If you have 25 or more foreign accounts, you may file a consolidated FBAR by checking the appropriate box on the form and providing aggregate totals. You must still maintain detailed records of each account and provide them to FinCEN upon request.

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Key points:

• Unlike tax return extensions, you do not need to file Form 4868 or any other request to get the FBAR extension. If you miss April 15, you automatically have until October 15.
• There is no further extension beyond October 15.
• The FBAR is filed for the calendar year. For the 2025 tax year, the FBAR is due April 15, 2026, with an automatic extension to October 15, 2026.

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FBAR penalties are among the most severe in US tax law, and they are assessed per account, per year — not per return.

### What "Willful" Means

The IRS defines willfulness broadly. It includes not just intentional concealment but also reckless disregard — meaning you knew or should have known about the requirement and ignored it. Courts have found willfulness where taxpayers:

• Checked "No" on Schedule B, Part III (which asks if you have a financial interest in a foreign account) when the answer was clearly yes
• Failed to disclose foreign accounts despite being asked by their tax preparer
• Had a pattern of non-reporting over multiple years

NRIs often confuse FBAR and FATCA. They are separate requirements with different thresholds, different filing methods, and different enforcement agencies.

Key takeaway: If your total foreign accounts exceed $10,000, you almost certainly need to file the FBAR. If your total foreign assets also exceed the FATCA thresholds, you need to file both. Filing one does not excuse you from filing the other.

Check your FBAR and FATCA obligations in 3 minutes with our free compliance checker.

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1. Not filing because "my CA in India said I don't need to." Indian chartered accountants are experts in Indian tax law, not US tax law. The FBAR is a US requirement that has no Indian equivalent.

2. Reporting year-end balances instead of maximum balances. The FBAR requires the highest balance during the year, not the December 31 balance. If you received a large remittance in June that you spent by December, the June balance is what you report.

3. Omitting fixed deposits. Each NRE or NRO FD is a separate account. Many NRIs report only their savings accounts and forget the FDs — which often hold the largest balances.

4. Omitting mutual fund folios. Each mutual fund folio number is a separate account. If you have SIPs across 10 folios, you report 10 accounts.

5. Not reporting accounts with zero balance. If an account was open during the year and had a balance at any point, it is reportable — even if the balance was zero at year-end.

6. Using the wrong exchange rate. The FBAR requires the Treasury's year-end rate, not the rate on the date of the maximum balance. Convert all amounts using the single official rate for December 31 of the reporting year.

7. Confusing the $10,000 threshold as per-account. It is aggregate across all foreign accounts. Five accounts each holding $3,000 at their peak means a combined $15,000 — and all five must be reported.

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US law requires you to maintain records of your foreign accounts for 5 years from the FBAR due date. For each account, you should retain:

• Account statements showing balances throughout the year (or at least the highest balance)
• The name and address of the financial institution
• Account numbers
• Type of account
• The maximum value of the account during the year in the local currency and in USD

Practical tip for NRIs: Download your NRE, NRO, and FD statements from your Indian bank's online portal at least once a year. Indian banks do not always retain statements beyond 2-3 years, and requesting old statements later can be difficult and time-consuming.

For mutual funds, download your Consolidated Account Statement (CAS) from CAMS or KFintech. For demat accounts, save your holdings statement from your depository participant (NSDL or CDSL).

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If you have missed filing FBARs for prior years, you have several options to come into compliance:

### Streamlined Filing Compliance Procedures

If your failure was non-willful, the IRS Streamlined Procedures allow you to:

• File the last 3 years of delinquent or amended tax returns
• File the last 6 years of delinquent FBARs
• Pay a 5% miscellaneous offshore penalty (based on the highest aggregate balance of your unreported foreign accounts during the 6-year period) if you are a US resident
• Pay no penalty if you qualify as a foreign resident under the Streamlined Foreign Offshore Procedures

### Delinquent FBAR Submission Procedures

If you have no unreported income (just missed the FBAR itself), you may be able to file delinquent FBARs through the Delinquent FBAR Submission Procedures with no penalty. You must include a statement explaining why the FBARs are late.

### Voluntary Disclosure Practice

For willful non-compliance, the IRS Voluntary Disclosure Practice provides a path to avoid criminal prosecution — but it comes with significant penalties.

Our strong recommendation: Do not wait for the IRS to find your unfiled FBARs. The penalties increase with each passing year, and voluntary disclosure always results in a better outcome than an IRS-initiated examination.

Schedule a consultation to discuss your FBAR compliance situation confidentially.

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### What is the FBAR filing threshold?

You must file an FBAR if the aggregate maximum value of all your foreign financial accounts exceeds $10,000 at any point during the calendar year. This is a combined total across all accounts, not a per-account threshold.

### Do NRE accounts count for FBAR?

Yes. NRE savings accounts and NRE fixed deposits are foreign financial accounts and must be reported on the FBAR. The fact that NRE interest is tax-exempt in India has no bearing on the US FBAR requirement.

### Does PPF count for FBAR filing?

Yes. The Public Provident Fund (PPF) is a financial account maintained with a bank or post office in India and should be reported on the FBAR. While the IRS has not issued specific guidance on PPF, the FinCEN definition of "financial account" is broad enough to include it, and reporting is the recommended best practice.

### What is the FBAR penalty for non-filing?

Non-willful FBAR penalties are up to about $10,000, generally applied per violation. Willful penalties are the greater of about $100,000 or 50% of the account balance, and may apply per account per year.

### Can I file FBAR myself or do I need a CPA?

You can file the FBAR yourself through the BSA E-Filing System at no cost. However, if you have a complex situation — multiple accounts, past non-filing, or accounts where you have signature authority but not ownership — working with a CPA experienced in international tax compliance is advisable.

### Is FBAR the same as FATCA?

No. FBAR (FinCEN Form 114) is filed with FinCEN and has a $10,000 aggregate threshold. FATCA (Form 8938) is filed with the IRS as part of your tax return and has higher thresholds ($50,000/$100,000 depending on filing status). Many NRIs need to file both. See our FBAR vs FATCA comparison for a detailed breakdown.

### What if I missed filing FBAR for several years?

You have options to come into compliance, including the IRS Streamlined Filing Compliance Procedures (5% penalty for non-willful violations) or the Delinquent FBAR Submission Procedures (potentially no penalty if you have no unreported income). Do not ignore the issue — penalties grow with each unfiled year.

### Do I need to report my Indian mutual funds on FBAR?

Yes. Each mutual fund folio held with an Indian AMC is considered a separate foreign financial account. If you have SIPs across multiple folios, each folio must be reported individually on the FBAR with its maximum value during the year.

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