Form 8938 for Indian assets: PPF, EPF, mutual funds and FDs (2026)

Who has to file Form 8938 as an Indian in the US?

You file Form 8938 if you are a "specified individual" with an interest in specified foreign financial assets whose total value crosses the threshold that applies to your situation. The IRS defines specified individuals to include "U.S. citizens, resident aliens, trusts, estates, and domestic entities" with the right threshold (IRS 8938 vs FBAR comparison). For most Indians on H1B, L1 or a green card, the "resident alien" test is met once you pass the Substantial Presence Test — see resident alien vs nonresident alien for how that works in your first years in the US.

Two things trip Indians up here. First, F-1 students on OPT in their first five calendar years are usually nonresident aliens and are not specified individuals for 8938 purposes — the IRS says 8938 applies to specified individuals, which excludes most nonresident aliens unless they elect to be treated as residents. Second, filing jointly with a nonresident spouse under an election to be treated as a resident pulls that spouse's Indian accounts into your 8938 total as well; this is a common surprise for mixed-visa couples (see ITIN for NRI spouse).

What are the Form 8938 thresholds for Indians living in the US?

The IRS splits the thresholds by filing status and by whether your tax home is in the US or abroad. For Indians who moved to the US on H1B/L1/green card and whose tax home is now the US, the "living in the US" thresholds apply.

Those figures come straight from the IRS 8938 vs FBAR comparison page (IRS). Note what matters is the total value of all your specified foreign financial assets, not any single account. A PPF at ~$18,000 plus EPF at ~$22,000 plus a mutual fund folio at ~$12,000 plus NRE/NRO balances at ~$5,000 is already $57,000 — over the $50,000 end-of-year floor for an unmarried filer in the US.

The "any time during the year" test is also easy to miss. A single transfer from an India property sale that briefly lifts your NRO balance over $75,000 can trip the threshold even if the balance was back under $20,000 by December 31.

Which Indian assets go on Form 8938?

PPF, EPF, NPS, superannuation

Public Provident Fund, Employees' Provident Fund, National Pension System and other employer or statutory retirement accounts count as either "foreign financial accounts" (if held with an Indian financial institution) or as "foreign pension or deferred compensation plans". The IRS FAQ states that "If you have an interest in a foreign pension or deferred compensation plan, you have to report this interest on Form 8938 if the value of your specified foreign financial assets is greater than the reporting threshold that applies to you" (IRS 8938 FAQ).

Valuation: use the fair market value of your beneficial interest on the last day of the year. If you cannot get that from readily accessible information and you received no distributions, the IRS allows a value of zero — but you still report the plan (IRS 8938 FAQ, "How do I value my interest in a foreign pension..."). In practice, PPF and NPS statements give you a clean year-end balance; EPF statements from EPFO are the usable number.

Rev. Proc. 2020-17 exempts certain tax-favored foreign retirement trusts from Form 3520/3520-A reporting, but the IRS is explicit that this "does not affect any reporting obligations under section 6038D" — meaning the Form 8938 obligation still applies (Instructions for Form 8938).

Indian mutual funds (folios held with Indian AMCs)

Shares of an Indian mutual fund held through an Indian AMC or distributor are a foreign financial account for 8938 purposes and the fund itself is almost always a Passive Foreign Investment Company (PFIC) for US tax. The 8938 reporting side is simple: the folio is a specified foreign financial asset, reportable at its year-end rupee balance converted to USD using the Treasury year-end rate.

The PFIC side is more work and separate. Each PFIC usually requires its own Form 8621 with QEF, mark-to-market or default "excess distribution" treatment. That is why we are splitting the mutual fund mechanics into a dedicated post — see Form 8621 for Indian mutual funds for cost, elections and the TurboTax gap. On 8938 you still list the account; the PFIC compliance happens on its own form.

If instead you hold the same AMC's scheme through a US-based brokerage or a US-domiciled India fund, that is a US financial account and does not go on 8938 (IRS 8938 FAQ, "U.S.-based financial accounts").

NRE, NRO, FCNR deposits and Indian bank FDs

Savings, deposit, checking and brokerage accounts held with an Indian bank are foreign financial accounts and go on 8938 if your total crosses the threshold. The IRS lists "Savings, deposit, checking, and brokerage accounts held with a bank or broker-dealer" as the core example of reportable financial accounts (IRS 8938 FAQ). This covers NRE, NRO and FCNR deposits, plain rupee FDs, HDFC/ICICI/SBI savings, Zerodha/Groww broking balances held through an Indian broker, and sweep accounts.

Jointly held accounts with a parent in India are a common question. If you have a legal interest in the account you include its maximum value on your 8938 — the fact that your father is the first holder does not remove your interest.

Direct holdings of Indian shares and bonds

Indian equity shares, listed or unlisted, and debentures held outside a financial account (for example, through a demat account in your name without an account structure, or physical certificates) are reportable foreign stock or securities. If the same shares sit inside a demat/broking account at an Indian broker, you report the account; you do not separately report each stock inside it (IRS 8938 FAQ, "Foreign stocks or securities").

Insurance and ULIPs

A foreign-issued life insurance or annuity contract with a cash-surrender value is a specified foreign financial asset (IRS 8938 vs FBAR comparison). LIC endowment plans, ULIPs and other Indian cash-value policies qualify. Pure term insurance without cash value does not.

What's not on Form 8938 even if it's in India

• Direct foreign real estate. A flat in Hyderabad or land in Pune that you own in your personal name is not a specified foreign financial asset. The IRS FAQ states, "Foreign real estate is not a specified foreign financial asset required to be reported on Form 8938. For example, a personal residence or a rental property does not have to be reported."
• Foreign currency held directly. Rupees in a locker at home are not reportable; rupees sitting in a bank account are.
• Precious metals and jewellery held directly. Gold bars, SGBs held in physical form outside a demat, and family jewellery are not specified foreign financial assets. SGBs held in a demat sit inside a reportable account.
• Foreign Social Security equivalents. "Payments or the rights to receive the foreign equivalent of Social Security, social insurance benefits or another similar program of a foreign government are not specified foreign financial assets" (IRS 8938 FAQ).

Form 8938 vs FBAR: do I file one, the other, or both?

Both, in most Indian-asset cases. The IRS states plainly: "The filing of Form 8938 does not relieve you of the separate requirement to file the FBAR if you are otherwise required to do so, and vice-versa. Depending on your situation, you may be required to file Form 8938 or the FBAR or both forms, and certain foreign accounts may be required to be reported on both forms" (IRS 8938 FAQ).

Our deeper walkthrough of the two sides is at FBAR and Form 8938 for Indian accounts (overlap, exceptions, FBAR mechanics). Step-by-step FBAR filing is at file FBAR for Indian bank accounts.

How to value Indian accounts for Form 8938

The IRS instructions let you use fair market value based on "periodic account statements unless you have reason to know that the statements do not reflect a reasonable estimate of the maximum value of the account during the tax year" (IRS 8938 FAQ). For most Indian accounts, this means the quarterly or year-end statement is fine.

Currency conversion: use the US Treasury Reporting Rates of Exchange for the last day of the tax year to convert rupees to dollars for Form 8938 purposes. For 2024 reporting the common convention has been to use the December 31 Treasury rate; FBAR uses the same rate (see Treasury Fiscal Service rates).

Three common valuation moves for Indian assets:

• PPF: year-end balance from the SBI/post office passbook, interest credited on March 31 included.
• EPF: the EPFO member passbook year-end balance (your contribution + employer contribution + accumulated interest).
• Mutual funds: the AMC's year-end NAV × units held in the folio.

A worked example: H1B in San Jose with Indian assets

Priya moved to the US on H1B in Jan 2023 and crossed the Substantial Presence Test in 2024. For tax year 2025 she is a resident alien filing single. Her Indian financial picture on December 31, 2025:

• PPF (SBI): ₹14 lakh ≈ $16,300 at year-end.
• EPF (left from TCS Bangalore): ₹18 lakh ≈ $21,000.
• NRO savings (ICICI): ₹2 lakh ≈ $2,300, highest balance ₹6 lakh in July (after a property sale, which later moved abroad).
• Mutual fund folios (ICICI Prudential, two schemes): ₹12 lakh ≈ $14,000.
• Flat in Hyderabad in her name: ~$120,000 market value.

Her 8938 total is $16,300 + $21,000 + $2,300 (year-end NRO; property-sale balance only matters for the "any time" test) + $14,000 = $53,600. The flat is not counted. She exceeds the $50,000 end-of-year unmarried threshold, so she files Form 8938 with her 1040. The "any time during the year" NRO spike of $6 lakh (≈ $7,000) is well under $75,000 on its own but the aggregate during the year with other accounts is also over threshold, so the filing requirement is clear either way. She also files FBAR because her accounts aggregate over $10,000, and she files Form 8621 for each PFIC-classified mutual fund scheme (see Form 8621).

Penalties: what missing Form 8938 actually costs

The IRS penalty structure is harsher than people assume because 8938 adds a 40% accuracy-related penalty on top of the flat failure-to-file amount:

• Failure to disclose: up to $10,000.
• Continued failure after IRS notice: additional $10,000 for each 30-day period, capped at an additional $50,000 — giving a maximum of $60,000 (IRS 8938 vs FBAR comparison).
• Accuracy-related penalty: 40% on an underpayment of tax attributable to any undisclosed specified foreign financial asset, under IRC section 6662(j) (see "Accuracy-Related Penalty" in the Instructions for Form 8938).
• Statute of limitations: the IRS gets an extended statute to assess tax where you omit income over $5,000 attributable to a foreign financial asset — six years instead of three ("Extended Statute of Limitations for Failure To Include Income" in the Instructions).
• Reasonable cause: a reasonable-cause exception exists but only applies if you can show the failure was due to reasonable cause and not willful neglect (Instructions for Form 8938, "Reasonable Cause Exception").

If you missed Form 8938 in prior years, you can either amend each return under 1040-X or go into the Streamlined Filing Compliance Procedures, depending on how willful the omission was — see streamlined filing for NRIs for which route fits. There is no stand-alone "delinquent 8938" procedure the way there used to be for FBAR.

How we handle Form 8938 at Lesser

Our walk-through for every Indian client in their first US filing: pull one year of statements for every live Indian account (PPF, EPF, NPS, every bank, every demat, every AMC folio), convert at the right Treasury rate, add up the two totals (year-end and highest-during-year), and compare to the threshold that fits the filing status. If the total crosses, Form 8938 goes in with the 1040. If the client also has mutual fund folios, each scheme gets its own Form 8621 with the mark-to-market election evaluated for its first-year suitability — see NRI tax CPA vs TurboTax for why DIY software fails on this.

Our flat-fee tax filing for NRIs includes Form 8938 (and FBAR) at no extra charge; Form 8621 is priced per PFIC. See how Lesser works for NRIs.