Form 8938 and Your Indian Assets
Filing an FBAR does not satisfy Form 8938, and Form 8938 reaches things the FBAR never touches — your directly held Indian shares, your stake in a family company, the loan you made to a cousin. Here is where the two diverge.
The short answer
Form 8938 is a FATCA disclosure filed with your tax return, listing specified foreign financial assets. Thresholds start at $50,000 on the last day of the year, or $75,000 at any point, for a single filer living in the US — far above the FBAR's $10,000. It is a separate obligation from the FBAR: neither is a subset of the other, and filing one does not satisfy the other.
Two forms, and neither contains the other
People reasonably assume one of these is the thorough version of the other. It does not work like that, and the asymmetry runs in both directions.
Form 8938 is broader on assets. It covers things that are not accounts at all — foreign stock held directly, an interest in a foreign entity, a loan you made to someone abroad, an interest in a foreign pension arrangement.
But the FBAR is broader on control. Signature authority over an account you have no financial interest in is an FBAR item, and generally not an 8938 one. Being a signatory on your parents' account in India is the everyday example.
There is also a practical difference worth knowing: Form 8938 is only required if you have to file a tax return, because it is attached to one. The FBAR carries no such condition — it is due on its own account, whether or not you file a return.
The thresholds
Four cases, and each has two tests. You meet the requirement if either test is satisfied — the aggregate value on the last day of the year, or a higher value at any point during it.
| Filing status | Residence | Last day of year | Any time in year |
|---|---|---|---|
| Single, or married filing separately | Living in the US | $50,000 | $75,000 |
| Married filing jointly | Living in the US | $100,000 | $150,000 |
| Single, or married filing separately | Living abroad | $200,000 | $300,000 |
| Married filing jointly | Living abroad | $400,000 | $600,000 |
Because these sit so much higher than the FBAR's $10,000, a very common position is owing an FBAR and no Form 8938. Do not read the absence of an 8938 requirement as meaning you have nothing to report.
Which Indian assets each form catches
Read the two columns against each other rather than down one of them — the disagreements are the point.
| Asset | Form 8938 | FBAR | Notes |
|---|---|---|---|
| Savings, NRE, NRO, FCNR accounts | Yes | Yes | Financial accounts at a foreign financial institution. Both forms. |
| Fixed deposits | Yes | Yes | Same treatment as a bank account. |
| Demat account | Yes | Yes | Report the account. The holdings inside it are covered by reporting the account. |
| Indian mutual funds | Yes | Yes | Also a PFIC question on the return. If you file Form 8621 for a fund, Part IV of Form 8938 lets you avoid detailing it twice. |
| Directly held Indian shares | Yes | No | The clearest gap between the two. Foreign stock held for investment outside an account is a specified foreign financial asset but not a financial account. |
| Interest in an Indian private company or LLP | Yes | No | An interest in a foreign entity. May also trigger separate forms depending on the structure and your ownership. |
| PPF and EPF balances | Generally yes | Yes | An interest in a foreign pension or deferred compensation arrangement. Whether the annual accretion is currently taxable is a separate, contested question. |
| LIC or other policy with cash value | Yes | Usually | A foreign-issued insurance or annuity contract with a cash surrender value. Pure term cover with no cash value is neither. |
| A loan you made to someone in India | Yes | No | A note or other debt instrument issued by a foreign person, held for investment. |
| Indian real estate held directly | No | No | Property itself is neither. Rental income is still taxable, and an account collecting the rent is reportable. |
| Indian real estate held through a company | Yes | No | The property is not reportable but your interest in the entity holding it is. |
| Gold or jewellery held directly | No | No | Directly held physical assets are outside both. Held in a custodial account, the account is reportable. |
| Signature authority on a parent's account | Generally no | Yes | The gap running the other way. Without a financial interest this is an FBAR item and generally not an 8938 one. |
Reporting is not the same as taxing. PPF and EPF are reportable, but whether the annual accretion is currently taxable in the US is genuinely unsettled — the India-US treaty contains no article that plainly defers it. This page takes a position on reporting only.
If you already file Form 8621
Anyone holding Indian mutual funds is probably filing Form 8621 for each of them. Those funds are also specified foreign financial assets, so the obvious worry is having to describe every holding twice.
You do not. Form 8938 has a part for assets already reported on certain other forms — 8621, 3520, 5471, 8865 and similar. You state how many of those forms you filed instead of repeating the detail. One thing does not change, though: those assets still count toward the threshold. Excluding them from the arithmetic is a common way to conclude wrongly that no 8938 is due.
Penalties, and the part that outlasts them
The statute sets a $10,000 failure-to-file penalty, escalating by a further amount up to $50,000 if the failure continues after the IRS notifies you. Reasonable cause is a defence, but it has to be established rather than asserted.
Separately there is a 40% accuracy-related penalty on an understatement of tax attributable to an undisclosed foreign financial asset — double the ordinary 20% rate.
The consequence that tends to matter most is neither of those. A missing required information return can hold the limitation period open on your entire return, not merely the portion relating to the asset. A year you had written off as closed may not be. The same rule applies to a missing Form 8621, which is why these two guides belong together.
Where this comes from
IRS guidance and statute. The thresholds in particular are worth confirming against the current instructions rather than any secondary summary, including this one:
- IRS — Summary of FATCA reporting for US taxpayers
- IRS — About Form 8938, Statement of Specified Foreign Financial Assets
- IRS — Instructions for Form 8938: current thresholds, asset definitions and the duplicative-reporting part
- IRS — Comparison of Form 8938 and FBAR requirements, line by line
- 26 U.S.C. § 6038D — the reporting requirement and the failure-to-file penalty
- 26 U.S.C. § 6662(j) — the 40% penalty for undisclosed foreign financial assets
- 26 U.S.C. § 6501(c)(8) — how a missing information return extends the limitation period
- IRS Publication 519 — US Tax Guide for Aliens, including exempt individuals
Reviewed by Teja K, CPA · last reviewed . This page is general information, not tax advice for your situation. Whether a particular Indian holding is reportable depends on facts we cannot see from here.
Frequently Asked Questions
I already file an FBAR. Do I still need Form 8938?
Quite possibly, yes. They are separate requirements with separate thresholds administered by different agencies — the FBAR goes to FinCEN, Form 8938 is attached to your tax return and goes to the IRS. Filing one does nothing for the other, and a great many people with Indian assets owe both for the same year.
What is the Form 8938 threshold?
It depends on your filing status and whether you live in the US or abroad, and each case has two tests — a value on the last day of the year and a higher value at any point during the year. Meeting either one triggers the requirement. For someone single and living in the US it is $50,000 on the last day or $75,000 at any time; married filing jointly in the US, $100,000 or $150,000. The thresholds are substantially higher if you live abroad. Note these are far above the FBAR's $10,000, which is why plenty of people owe an FBAR and no 8938.
What does Form 8938 catch that the FBAR does not?
Assets that are not accounts. Directly held Indian shares, an interest in an Indian private company or LLP, a loan you made to someone in India, and an interest in a foreign pension arrangement are all specified foreign financial assets, but none of them is a foreign financial account. If your Indian holdings are anything other than bank and demat accounts, the two forms will not cover the same ground.
Is there anything the FBAR catches that Form 8938 does not?
Yes, and it surprises people. Signature or other authority over an account you have no financial interest in — being a signatory on a parent's Indian account, for instance — is reportable on an FBAR and generally not on Form 8938. So neither form is a subset of the other.
Do I have to file Form 8938 if I do not have to file a tax return?
No, and this is a real difference from the FBAR. Form 8938 is only required if you are required to file an income tax return for the year, because it is filed as part of that return. The FBAR has no such condition — it is due on its own regardless of whether you file a return.
I file Form 8621 for my Indian mutual funds. Do I list them on Form 8938 as well?
You do not have to detail them twice. Form 8938 has a part for reporting the number of other forms — 8621, 3520, 5471, 8865 and similar — on which specified foreign financial assets have already been reported. You identify how many such forms you filed rather than repeating the asset detail. You still have to count those assets toward the threshold, though.
What are the penalties for not filing it?
The statute sets a $10,000 failure-to-file penalty, which escalates if the failure continues after the IRS notifies you, up to a further $50,000. Separately there is a 40% accuracy-related penalty on an understatement of tax attributable to an undisclosed foreign financial asset, which is double the ordinary 20% rate. Reasonable cause is a defence to the failure-to-file penalty but has to be established, not asserted.
Does not filing it affect anything beyond the form itself?
Yes, and this is the part most people miss. Failing to file a required information return can hold the limitation period open on your entire tax return, not just the part relating to the asset. A year you assumed had closed may still be open. The same rule applies to a missing Form 8621.
Does this apply to me on an F-1 visa?
Generally not while you are a nonresident alien. The requirement applies to specified individuals, which broadly means US citizens and resident aliens. F-1 and J-1 students are usually exempt individuals under the substantial presence test, so their days do not count toward residency. The obligation begins when you become a resident, most commonly on moving to an H-1B.
Not sure which forms you owe?
Send us the list of what you hold in India. We will tell you which of the FBAR, Form 8938 and Form 8621 apply, and what to do about any year already filed without them.