FBAR vs FATCA — the two US filings that catch NRIs in America

Every US-based NRI with Indian bank accounts, mutual funds, insurance, or retirement balances runs into two separate US filing regimes: FBAR (FinCEN Form 114) and FATCA (IRS Form 8938). They look similar, they cover overlapping ground, and they are routinely confused — but they are different forms, filed with different agencies, under different laws, with different thresholds and different penalties. You may need to file both, one, or neither depending on the size and mix of your Indian holdings.

This article sets out the current position for the 2025 tax year (filing in 2026) and flags the Indian-asset specifics — Indian mutual funds, life insurance, PPF, EPF — that trip up even careful filers.

Quick comparison

	FBAR — FinCEN Form 114	FATCA — IRS Form 8938
Law	Bank Secrecy Act (1970)	FATCA / Sec. 6038D of the IRC (2010)
Regulator	FinCEN (Treasury)	IRS
Filed with	BSA E-Filing System	With Form 1040
Purpose	Anti-money-laundering disclosure	Tax disclosure
Who files	US persons with signature authority or financial interest in foreign accounts	US persons holding specified foreign financial assets
Threshold (single, US resident)	$10,000 aggregate at any point in the year	$50,000 end of year or $75,000 any time
Threshold (single, living abroad)	Same $10,000	$200,000 end of year or $300,000 any time
Threshold (joint, living abroad)	Same $10,000	$400,000 end of year or $600,000 any time
Due date	15 April with automatic extension to 15 October	15 April, extended via Form 4868
Non-willful penalty	Up to ~$16,000 per report (post-Bittner)	Up to $10,000 per year for failure, plus $10,000/30 days up to $60,000
Willful penalty	Greater of ~$160,000 or 50% of account balance	40% accuracy-related + extended SOL + potential criminal

Key structural differences

FBAR is about accounts; FATCA is about assets

FBAR captures foreign financial accounts — bank accounts, brokerage accounts, mutual-fund accounts, insurance policies with cash value, retirement accounts, and accounts over which you have only signature authority. It does not capture a foreign stock certificate you hold in physical form, a privately held company stake, or an asset held "outside an account".

FATCA is broader. Form 8938 captures everything FBAR captures, plus:

Foreign-company stock or debt held directly.
Partnership interests in a foreign entity.
Foreign hedge funds, private-equity fund interests, and certain non-account financial instruments.
Interests in foreign trusts and estates.

So an NRI with Indian bank accounts below the FBAR threshold but a large direct holding of Indian company stock in physical form may owe Form 8938 without owing FBAR.

FBAR thresholds don't change with residence; FATCA thresholds do

A US person with $12,000 across Indian accounts files FBAR whether they live in Houston or in Hyderabad. The $10,000 aggregate is the same.

FATCA, by contrast, quadruples its thresholds when you live abroad (a US citizen or resident who is present in a foreign country more than 330 days in a 12-month period, or whose tax home is in a foreign country). A US-citizen NRI living in Mumbai files Form 8938 only if Indian assets exceed $200k end of year / $300k any time (single) or $400k / $600k (joint).

FBAR penalties are per report, not per account — post-Bittner

A significant change came from the US Supreme Court in Bittner v. United States (28 February 2023), holding that the non-willful FBAR penalty is per report, not per account. Before Bittner, the IRS had argued a non-filer with 50 unreported accounts could face $10,000 × 50 = $500,000 in non-willful penalties; the Supreme Court read the statute as capping non-willful penalties at $10,000 per annual report.

The willful-penalty position — greater of $100,000 (inflation- adjusted) or 50% of account balances — was not changed by Bittner and is still assessed per account for willful violations.

The $10,000 figure has been inflation-adjusted by FinCEN to roughly $16,117 for violations assessed in 2024 and later; willful to roughly $161,166. Check the current-year table before acting.

What counts as an Indian asset — the items that trip people up

Indian bank accounts (NRE, NRO, FCNR)

All three are reportable. The aggregate balance across all Indian accounts is what matters for the $10,000 FBAR trigger, not per-account value.

Joint accounts with a non-US-person relative (e.g., a parent) are reportable by the US-person account holder on the full value — regardless of whose money it is. The relative's name on the account does not remove the US-person's reporting obligation.

Signature authority without financial interest — being a signatory on a parent's NRO account, for example — is also reportable under FBAR, though at a reduced disclosure.

Indian mutual funds — report and beware PFIC

Indian mutual funds are reportable on both FBAR (as financial accounts) and Form 8938 (as specified foreign financial assets).

Far more problematic: each Indian mutual fund is typically a Passive Foreign Investment Company (PFIC) under the IRC. PFICs carry punitive US tax treatment:

Annual Form 8621 filing per fund.
"Excess distribution" rules that tax gains at the highest ordinary income rates plus interest charges on the deferred portion.
Loss of capital-gains treatment.
Qualified Electing Fund (QEF) or Mark-to-Market elections can mitigate — but require the fund to provide specific documentation that most Indian fund houses do not issue.

The practical answer for most US-based NRIs is to avoid Indian mutual funds and use Indian direct equity or US-domiciled India-exposed funds instead.

Indian life-insurance policies with cash value

A ULIP, endowment, or whole-life Indian policy with a savings / investment component has a cash surrender value and is reportable on both FBAR and Form 8938. Some are also classified as foreign trusts for Form 3520 / 3520-A purposes — triple reporting at worst.

Pure-term life insurance without cash value is not reportable.

Public Provident Fund (PPF) and Employees' Provident Fund (EPF)

The IRS has not issued a clean, published position on Indian PPF / EPF. Practitioner practice is:

Report on FBAR and Form 8938 — safer to include.
Annual interest is taxable in the US year-to-year (despite being tax-free in India), because the US does not recognise the India-side exemption for a US-person taxpayer.
Some practitioners treat PPF/EPF as foreign grantor trusts and file Forms 3520 / 3520-A annually; others do not. The risk tolerance and CPA view varies. Be consistent across years.

Indian employer stock plans, NPS, RSUs

Indian employer-granted stock options / RSUs — reportable at vest on Form 8938; tax implications depend on the plan and DTAA treatment.
National Pension System (NPS) — reportable; US tax treatment as a foreign financial account.
Fixed deposits — reportable as a bank account.

What is not reportable

Indian real estate held directly — not a financial asset; outside FBAR and FATCA. (Rental income is still US-taxable, but the property itself is not an FBAR/FATCA item.)
Gold jewellery or physical gold held personally — not a financial asset.
Cash in an Indian safe — not a financial account.
Indian credit cards — not a deposit account; reported only if you have a separate deposit linked.

Deadlines for the 2025 tax year

FBAR: due 15 April 2026; automatic extension to 15 October 2026 with no extension request required. A late FBAR without a reasonable-cause letter is a penalty risk even a day after the deadline.
Form 8938: due with your Form 1040 — 15 April 2026; or 17 June 2026 if you are a US citizen or resident living abroad (automatic 2-month extension); or 15 October 2026 if you file Form 4868 for a six-month extension. Form 8938 follows whatever extension you got for the 1040.

Filing mechanics

FBAR

Filed at bsaefiling.fincen.treas.gov.
Individual filers create a FinCEN account; a paid preparer filing on your behalf uses their own PTIN / PIN setup.
You file one FBAR per year that lists all your foreign accounts — not a separate FBAR per account.
Keep records for five years in case FinCEN queries.

Form 8938

Filed with your Form 1040 (or 1040-SR).
Values are reported at the higher of year-end fair market value or any in-year peak in USD.
FX conversion uses the Treasury Reporting Rate of Exchange on the relevant valuation date.

Both filings require precise USD values. The Treasury publishes quarterly reference rates; keep a record of the rate you used so you can defend the valuation if queried.

If you missed prior filings

For non-willful past lapses, two main remediation paths exist:

Streamlined Filing Compliance Procedures (domestic or foreign offshore): for non-willful delinquencies, requires 3 years of amended returns, 6 years of FBARs, and a narrative certification of non-willfulness. Foreign streamlined (for Americans living abroad) has no penalty; domestic has a 5% penalty on the highest aggregate balance.
Delinquent FBAR Submission Procedures: for filers who reported and paid tax on the foreign income but missed only the FBAR. No penalty if the criteria are met.

The older Offshore Voluntary Disclosure Program (OVDP) closed in September 2018; its successor is the IRS's Voluntary Disclosure Practice, relevant mainly for willful cases with potential criminal exposure. Engage a US tax attorney (not just a CPA) before filing into this program.

Do not simply backfile late FBARs without considering the path. Silent disclosure of prior-year non-filings carries penalty risk without the protection of the streamlined program.

India side — the reciprocal picture

The US pulls Indian bank data directly through two channels:

FATCA IGA with India (Model 1, signed 9 July 2015) — Indian banks identify US-person account holders and report balances and interest annually to the Indian CBDT, which forwards to the IRS. Every Indian bank you deal with asks for your W-9 and US TIN if you are a US person for exactly this reason.
Common Reporting Standard (CRS) — India is a participating jurisdiction for automatic exchange of financial account information with around 110 countries, including most OECD countries.

What this means in practice: if you hold Indian accounts as a US person and do not file FBAR/8938, the IRS will probably see the data regardless. "They won't know" is not a viable strategy.

Common mistakes

Filing only FATCA, assuming it covers FBAR. They are separate agencies and separate regimes. A Form 8938 does not satisfy FBAR.
Not aggregating accounts. Two Indian accounts at $6,000 each cross the FBAR $10,000 aggregate threshold; each account is reportable.
Ignoring signature-authority-only accounts. A parent's NRO account you can sign on — reportable by you on FBAR even if the money is not yours.
Using the bank statement's closing balance for FBAR. The maximum value during the year is the relevant number for FBAR, not the year-end balance.
Missing the PFIC problem on Indian mutual funds. The FBAR / 8938 entry is the easy part — the Form 8621 and excess- distribution tax is where real money is lost. Plan before buying an Indian mutual fund as a US person.
Treating Indian PPF interest as tax-free in the US. India's tax exemption does not cross the US border. Report the interest annually on the 1040 even if the scheme is tax-free in India.
Assuming living abroad raises FBAR thresholds. It does not; only FATCA thresholds change with residence.
Converting at the wrong FX rate. Use the Treasury Reporting Rate of Exchange for 31 December (or the valuation date, as applicable), not the average rate, not the RBI reference rate.
Thinking a US citizen renouncing and becoming an Indian tax resident removes the historical obligation. It does not; pre-renunciation years still need to have been filed, and expatriation itself carries its own tax and filing rules (Form 8854, potential exit tax).

Bottom line

FBAR and FATCA are complementary US-side disclosure regimes that every US-person NRI with Indian holdings has to navigate. The core rules have been stable for a decade, but 2023's Bittner ruling lowered the worst-case non-willful FBAR exposure substantially, and the India-US FATCA IGA plus CRS mean the IRS gets the account data either way. The Indian-asset specifics — especially the PFIC trap on Indian mutual funds and the ambiguous PPF / EPF positions — are where US-based NRIs most often get professional help. Engage a cross-border CPA who handles Indian-US filings routinely; this is not general-practitioner territory.