FBAR and Form 8938 for Indian accounts: who must file and what counts

You did nothing wrong by keeping your Indian accounts open. Almost every Indian immigrant in the US has an NRO account, a few FDs, maybe a PPF from their first job. The mistake is assuming these are too small or too "Indian" to matter to the IRS. The reporting rules do not care where the money came from or whether it earned anything. They care about balances. Two separate forms cover this, and confusing them is the most common error.

Who has to file the FBAR for Indian accounts?

The FBAR (FinCEN Form 114, Report of Foreign Bank and Financial Accounts) applies to every US person: citizens, green card holders, and anyone who is a US tax resident under the substantial presence test. If you are on H1B and have spent most of the year in the US, that is you. F1 students in their first five calendar years are usually nonresident aliens and generally do not file, but confirm your residency status before assuming.

The trigger is simple and lower than most people expect: file if the aggregate value of all your foreign accounts exceeded $10,000 at any time during the calendar year. Per FinCEN and the IRS, that means all accounts added together, at their highest point, even for a single day.

Two traps inside that sentence:

1. Aggregate means combined. Three accounts holding $4,000 each never individually cross $10,000, but together they are $12,000. You file, and you report all three.
2. Any time means any moment. If a maturing FD briefly pushed your NRO balance over $10,000 in March before you moved the money, you file for that year. At current exchange rates, $10,000 is roughly Rs 8.5 to 9 lakh, a threshold many salaried professionals crossed years ago without noticing. Use the US Treasury's December 31 exchange rate to convert (published at fiscal.treasury.gov).

You do not need daily balance records to do this. The FBAR instructions let you rely on periodic account statements to find each account's maximum value, as long as the statements fairly reflect it, so taking the highest balance shown on your quarterly statements is acceptable.

The FBAR is not part of your tax return. You file it electronically through FinCEN's BSA E-Filing System at bsaefiling.fincen.gov. It is free, takes under an hour once you have your statements, and asks for each account's institution, account number, and maximum value during the year. The deadline is April 15, and FinCEN grants an automatic extension to October 15 with no request needed.

What is Form 8938 and do I also need it?

Form 8938 (Statement of Specified Foreign Financial Assets) comes from FATCA. It is attached to your Form 1040 and filed with your return, so it follows your tax deadline, including extensions.

The thresholds are higher and depend on filing status and where you live. These are the IRS figures:

Most H1B and green card households in the US use the first two rows. The "living abroad" rows can matter in the year you move back to India, but only if you meet the IRS presence-abroad test: a tax home in a foreign country plus at least 330 full days outside the US in a 12-month period. A mid-year move usually does not qualify, so plan on the US-resident thresholds for that year. If a move is on your horizon, the reporting picture changes alongside everything else covered in selling RSUs when moving back to India.

Form 8938 does not replace the FBAR. If you cross both thresholds, you file both, reporting largely the same accounts twice. Annoying, but that is the rule. And the FBAR threshold is so much lower that plenty of people file only the FBAR and never touch Form 8938. Side by side:

Which Indian accounts and assets actually count?

For the FBAR, count any financial account held at an institution outside the US:

• NRE, NRO, and ordinary savings accounts. All count, including the resident savings account you never converted after moving.
• Fixed deposits. Each FD is an account. A ladder of five FDs is five line items.
• PPF. A Public Provident Fund account is a foreign financial account for FBAR purposes. Its tax-free status in India does not carry over to the US.
• EPF. Most practitioners report EPF balances on the FBAR and Form 8938, but the US tax treatment of EPF (whether accruals are taxable, whether it is a foreign trust) is genuinely unsettled. Report it, and get professional advice on the income side rather than guessing.
• Indian mutual funds. Reportable, and they carry a second problem: US tax law generally treats Indian mutual funds as PFICs, which brings punitive tax rules on top of the reporting. If you hold meaningful mutual fund positions, this needs a preparer who knows PFICs.
• LIC and other insurance policies with cash surrender value. Endowment and money-back policies typically have cash value and are reportable. Pure term insurance with no cash value is not.
• Demat and brokerage accounts holding Indian stocks.

Property in India is not a financial account and does not go on the FBAR. Directly held real estate is also not reported on Form 8938, though shares of an entity that owns property can be.

Do joint accounts with my parents in India count?

Yes, and this is where most of the anxiety lives. If your name is on the account, you have a financial interest in it, and FBAR rules require you to report the entire maximum value of the account, not your share. Your parents' account with Rs 40 lakh in it, where you were added as a joint holder for convenience, is reportable at its full value. Signature authority alone, even with none of your money in the account, also triggers FBAR reporting.

Reporting does not make the money yours for tax purposes and does not tax your parents. It is disclosure, nothing more. Do not remove your name from accounts in a panic; just report accurately.

What are the penalties if I never filed?

Stated carefully, because the numbers online are often inflated or outdated:

• FBAR, non-willful: a civil penalty of up to $10,000 per violation by statute, inflation-adjusted to $16,536. One 2026 wrinkle: the government cancelled this year's inflation adjustment because the October 2025 CPI data needed to compute it was never published during the federal shutdown, so the 2025 figures stay in effect for penalties assessed in 2026 (confirm current amounts at fincen.gov). After the Supreme Court's Bittner decision in 2023, non-willful penalties apply per unfiled report, not per account, which capped the worst-case math for ordinary people.
• FBAR, willful: the greater of $165,353 or 50 percent of the account balance, per violation, plus possible criminal exposure. Willful means you knew or recklessly ignored the requirement.
• Form 8938: $10,000 for failure to file, up to an additional $50,000 if you ignore an IRS notice, plus a 40 percent penalty on any understated tax tied to the undisclosed assets. Missing it can also keep the statute of limitations open on all or part of your return until three years after you finally file the form.

The realistic picture: the IRS distinguishes sharply between people who did not know and people who hid money. Non-willful cases that come forward voluntarily are routinely resolved without the headline numbers. People found first through FATCA data matching (Indian banks report US-person accounts to the IRS) have a weaker story.

I have missed years of FBARs. How do I catch up?

Do not just start filing this year and hope, and do not quietly amend old returns. The IRS has formal paths for exactly this situation.

The main one is the Streamlined Filing Compliance Procedures, designed for taxpayers whose failure was non-willful, meaning negligence, inadvertence, or a good-faith misunderstanding. Broadly, you file three years of amended returns, six years of FBARs, and a certification of non-willfulness. There is a domestic version and a foreign version with different penalty terms. If you had no unreported income at all, note that the IRS withdrew its separate delinquent-FBAR submission procedures around July 1, 2026; the current route is filing the late FBARs through the BSA E-Filing System with an explanation, so confirm the right path with a CPA first.

Which path fits and whether your facts read as non-willful are judgment calls with real consequences. This is the one part of this topic you should not DIY, and a blog post cannot substitute for advice. Talk to a cross-border CPA or tax attorney before submitting anything.

For the forward-looking version of your finances, the FBAR itself is easy: if your situation is just bank accounts and FDs, file it yourself for free at bsaefiling.fincen.gov and be done in an evening. Where it gets tangled is everything around it: NRO interest on your 1040, RSU income on an H1B, PFIC mutual funds, or the reporting cliff in the year you leave the US for good. Lesser's cross-border CPAs handle FBAR, Form 8938, and the Indian-account questions around them as part of tax prep built for NRIs; you can see how it works at lesser.tax.