Schedule FA and a foreign life insurance policy: what to report, and what CRS already reports

By Eldar Edmond Grady, CEO, PPLI.com. Research checked 20 October 2026.हिन्दी में पढ़ें

Indian law as at 20 October 2026, Financial Year 2026-27. Section numbers follow the Income-tax Act 1961 unless stated; the Income-tax Act 2025 applies from 1 April 2026 and renumbers them. The ITR utility’s exact field labels change from year to year and should be read in the utility itself.

PPLI.com is a research publisher. It is not a tax adviser or a return preparer, it is not registered with IRDAI or SEBI, and it does not solicit or arrange insurance in India. Nothing on this page is advice on your own return.

Only an ordinarily resident taxpayer files Schedule FA

surrender value.">Schedule FA sits in ITR-2 and ITR-3 and applies to a resident and ordinarily resident individual. Residence is tested under section 6: 182 days in the year, or 60 days in the year and 365 in the previous four, with the 120-day variant for Indian citizens and persons of Indian origin whose Indian income exceeds ₹15 lakh. A returning NRI who was non-resident in nine of the previous ten years is usually resident but not ordinarily resident for two to three years after the move, and in those years Schedule FA is not required; the tests and the sequence are on returning to India: the RNOR window. From the first year as an ordinary resident, the policy goes in every year until it is surrendered or matures.

Two details catch people. The reporting period is the calendar year, January to December, not the financial year, so a policy bought in February 2026 appears in the return for assessment year 2026-27. And the duty is to report assets held at any time in that period, which includes a policy surrendered in March whose proceeds have already come home.

The cash value insurance contract table, and the number that goes in it

Schedule FA has separate tables for foreign bank accounts, custodial accounts, equity and debt interests, and one for a Foreign Cash Value Insurance Contract or Annuity Contract; in practitioner guides it is usually table A4. A life policy with a cash or surrender value belongs there. A pure term policy with no cash value is not a financial asset in this sense and is not reported. For each policy the table asks for the country and its code, the name and address of the insurer, the date of the contract, the cash or surrender value at the end of the period, and the gross amount paid or credited during the period, with its treatment in the return.

The value question is the one that most often goes wrong. Schedule FA wants the cash or surrender value at the period end, not premiums paid and not the sum assured. For a unit-linked policy that is the fund value less any surrender charge the insurer would apply on that date. Ask the insurer for the figure as at 31 December in writing every year; a figure read off an online portal in July is the wrong date. The same surrender value is the figure FAST-DS uses for a policy never reported: see FAST-DS 2026 and your foreign life policy.

A policy held through an offshore trust, or one in which you are a beneficiary rather than the owner, has its own rows: Schedule FA also asks for trusts in which you are a settlor, trustee or beneficiary, and for financial interests held as a beneficial owner. That is separate work with a lawyer and is not covered here.

What the insurer reports under CRS and FATCA

India signed the multilateral competent authority agreement for the Common Reporting Standard on 3 June 2015, the first reporting covered calendar 2016 and was due by 31 May 2017, and exchanges have run every year since. The legal basis in India is section 285BA, Rules 114F to 114H and Form 61B; the CBDT’s guidance note on FATCA and CRS treats a cash value insurance contract as a reportable financial account, and under CRS there is no minimum threshold. A Singapore, Luxembourg or Isle of Man insurer therefore reports an Indian resident policyholder’s name, address, tax identification number, policy number and year-end cash value to its own tax authority, which forwards it to the CBDT. The United States reports under the FATCA agreement of 9 July 2015 instead.

The insurer decides whom to report on the basis of the residence you declared to it. An NRI who gave a Dubai address when buying the policy and never updated it after moving to Pune may not be reported to India at all, which is not a comfort: the Schedule FA duty does not depend on the insurer’s records, and the mismatch surfaces when the self-certification is updated or the insurer runs its periodic review. Tell the insurer your new tax residence when it changes; the self-certification form is the document that drives the CRS report.

The practical consequence is that the CBDT holds, for each calendar year, a figure for the policy that came from the insurer. Schedule FA should carry the same figure, converted at the prescribed rate. Where the two differ, the explanation is usually a different valuation date or a different exchange rate, and the file should show which.

The Black Money Act, and the window that closes on 31 December 2026

A foreign asset left out of the return is the subject of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015: 30% tax on undisclosed foreign income and assets under section 3, a penalty of three times the tax under section 41, ₹10 lakh for each year the asset was omitted under sections 42 and 43, and prosecution under sections 49 and 50. Since October 2024, foreign assets other than immovable property worth up to ₹20 lakh in total escape the 42/43 penalty. A policy of any size that matters is above that.

For a returning NRI who bought the policy with foreign earnings while abroad and simply never listed it after becoming resident, the Finance Act 2026 opened a one-time route: the Foreign Assets of Small Taxpayers Disclosure Scheme, with declarations accepted from 16 August to 31 December 2026, a flat fee of ₹1 lakh for assets of that kind up to ₹5 crore, and immunity under the Black Money Act for what is declared. The categories, the valuation and the four forms are set out on FAST-DS 2026 and your foreign life policy. After the window closes, the ordinary route is a revised or updated return where the law allows one, with a CA who handles foreign asset matters.

What Schedule FA does, and what it does not do

Listing the policy does not tax it. The schedule is a disclosure; tax arrives only when money is received, under section 56(2)(xiii) for a policy outside section 10(10D), or section 45(1B) for a ULIP-type policy, and the sum received on death is exempt whatever the premium. The computation, the RNOR years and the two tribunal decisions on foreign insurers are on how India taxes a foreign life insurance policy, and the exemption rules on section 10(10D) for high-premium policies.

Equally, a policy reported every year, with values that match the insurer’s CRS report, is one of the most completely declared assets a resident can hold. That is the point of PPLI in India: lawful deferral, an exempt death benefit and a clean succession, with privacy from the public, heirs and litigants and none at all from the tax department.

Sources and authorities

• Income Tax Department: Schedule FA, details of foreign assets and income from any source outside India; step-by-step guide to Schedules FSI, TR and FA (March 2026).
• Income-tax Act 1961: sections 5, 6, 10(10D), 45(1B), 56(2)(xiii), 285BA; Rules 114F to 114H, Form 61B; Rule 11UACA; CBDT Circular 15/2023.
• CBDT Guidance Note on FATCA and CRS: cash value insurance contracts as reportable financial accounts; India’s MCAA signature of 3 June 2015; FATCA IGA of 9 July 2015.
• Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015: sections 3, 41, 42, 43, 49, 50; Finance (No. 2) Act 2024 relief up to ₹20 lakh.
• FAST-DS 2026: Finance Act 2026 and the Scheme Rules of 14 August 2026 (G.S.R. 732E), via KPMG and ClearTax (secondary).