FBAR and Your Indian Bank Accounts

Who actually has to file

The obligation falls on a United States person, which includes citizens, green card holders and anyone who is a resident alien for the year under the substantial presence test. Your visa category is not the test. Someone on an H-1B who has been in the US all year is normally a resident alien and is treated identically to a citizen here.

There is a real carve-out that this audience should know about, and it is routinely missed in both directions. F-1 and J-1 students are generally exempt individuals under the substantial presence test for a period of years, so their days in the US do not count toward residency. During that period they are nonresident aliens, and a nonresident alien has no FBAR obligation at all. Plenty of students file one unnecessarily; plenty of former students fail to start filing once the exempt period ends or they move to an H-1B.

If you are unsure which side of that line you fall on, the residency test is mechanical and you can work it out — our substantial presence test calculator applies the day-counting rules including the exempt individual treatment.

Which Indian accounts count

A foreign financial account is broader than most people assume. It is not limited to bank accounts, and it does not depend on the account earning anything or on you having moved money in or out during the year.

How the $10,000 threshold actually works

Two things about the threshold catch people out, and both push in the direction of owing a filing you did not expect.

First, it is aggregate. You add the maximum value of every foreign financial account together. Four modest accounts can cross a line that none of them approaches alone.

Second, it is the highest value at any point in the year, not the closing balance. A fixed deposit that matured mid-year and was spent still counts at its peak. So does money that passed through an account briefly — a property sale, a gift, a maturing policy.

There is one piece of relief hidden in the regulation, and families who have accumulated fixed deposits over two decades in India reach it more often than they expect. Once you have a financial interest in 25 or more foreign financial accounts, you report the number of accounts plus basic information rather than filling in a separate detail block for each one. A separate count of 25 applies to accounts you only have signature authority over. The relief is about the paperwork, not the obligation: the FBAR is still due, and you must be able to produce the full detail on every account if it is requested.

Accounts that are not yours

The FBAR covers accounts you hold a financial interest in and accounts over which you have signature or other authority. They are separate tests, and the second one has nothing to do with ownership. If you were added to a parent's account in India so you could operate it, or you are a signatory on a family business account, that account is reportable by you even though none of the money is yours. This is one of the most common reasons an otherwise careful filer has an incomplete FBAR.

Ownership of an Indian company reaches further than signature authority does, and the difference matters. Under the regulation you have a financial interest — not merely authority — in the foreign accounts of a company in which you own, directly or indirectly, more than 50 percent of the voting power or the total value of the shares. The same test applies to more than 50 percent of a partnership's profits or capital, and to any other entity by voting power, value or profits. It also catches an account held for you by an agent or nominee. So a founder who kept a majority stake in an Indian private limited company reports that company's accounts on a personal FBAR.

Keep the two things separate, because it is easy to overstate this. What goes on the FBAR is the company's account, not your shares. The shares are a different problem on a different form: an interest in an Indian private company or LLP is a specified foreign financial asset for Form 8938. So the majority shareholder and the family signatory both file an FBAR, but only one of them has the second exposure.

FBAR is not Form 8938

These are two different obligations that overlap heavily, and satisfying one does nothing for the other. Many people with Indian accounts owe both.

The IRS publishes a line-by-line comparison of the two, linked in the sources below. It is worth reading if you are close to either threshold.

Deadline, and what happens if you miss it

The FBAR is due April 15, with an automatic extension to October 15. The extension is genuinely automatic — there is no form to file and nothing to request, which differs from the extension for your tax return.

Penalties are tiered by whether the failure was non-willful or willful, and the willful ceiling is severe enough that the distinction matters more than any other fact in a late-filing case. The specific caps are adjusted for inflation annually, so we deliberately do not quote figures here that would go stale — the IRS FBAR page linked below carries the current ones.

One point of genuine relief: in Bittner v. United States (2023) the Supreme Court held that the non-willful penalty applies per report rather than per unreported account. Before that decision, someone with a dozen small Indian accounts faced a penalty multiplied by twelve.

If you have never filed one

This is the most common situation we see, and it is usually fixable. Which route applies turns on whether you also under-reported income:

• You reported all your income and simply missed the FBAR. The IRS position here is now general guidance rather than a named programme: if it has not contacted you about a late FBAR and you are not under civil or criminal investigation, file the late reports as soon as possible and give your reason for filing late on the FinCEN cover page. Note that guidance describing a distinct “Delinquent FBAR Submission Procedures” programme is out of date — that page no longer exists.
• Income was unreported too — the usual position with NRO interest. The Streamlined Filing Compliance Procedures are the mechanism, and they remain a formal programme with eligibility conditions, a signed non-willfulness certification, and in one of its two versions a penalty of 5% of your affected foreign assets. Whether you pay that 5% or nothing turns on a test that can favour recent arrivals and expires with time.

Entering the wrong route, or quietly filing late FBARs outside either, can make the position worse rather than better — a prior quiet filing does not disqualify you from the streamlined procedures, but penalties already assessed on it are not reversed. Our guide to the streamlined procedures sets out both versions, the test that decides which one you get, and what disqualifies you. Get the route decided before anything is submitted.

Where this comes from

Every statement on this page traces to a primary source — IRS guidance, FinCEN, the Treasury or the Supreme Court — rather than to secondary reporting. Check them yourself:

• IRS — Report of Foreign Bank and Financial Accounts (FBAR): who must file, thresholds, deadlines, and the current guidance on filing delinquent FBARs
• IRS Publication 5569, FBAR Reference Guide — account types, financial interest and signature authority
• 31 CFR 1010.350 — the FBAR regulation: who is a United States person, which accounts are reportable, what counts as a financial interest or signature authority, and the 25-account rule
• FinCEN BSA E-Filing System — where FinCEN Form 114 is actually filed
• IRS — Comparison of Form 8938 and FBAR requirements
• IRS Publication 519 — US Tax Guide for Aliens, including the substantial presence test and exempt individuals
• US Treasury Reporting Rates of Exchange — the rates to use for conversion
• IRS — Streamlined Filing Compliance Procedures

Reviewed by Teja K, CPA · last reviewed September 15, 2026. General information, not tax advice for your situation. FBAR outcomes turn on facts we cannot see from here. How we research and review this.