Foreign assets with Foreign Broker - A2 vs A3

This query is : Resolved

Guest

Guest (Querist)

20 June 2023 I have a brokerage account with a foreign broker.
I hold cash balance and foreign stocks with this broker.

Should I be filling both A2 and A3 of Schedule FA?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

07 July 2024 When filling out Schedule FA of the Income Tax Return (ITR) form in India for foreign assets held with a foreign broker, you generally categorize your foreign assets based on their nature. Here's how A2 and A3 classifications typically apply:

1. **A2 - Foreign Bank Accounts**: This section usually pertains to reporting details of your foreign bank accounts held outside India. If you have a foreign bank account associated with your brokerage account (for example, if the brokerage account includes a linked foreign bank account), you would report this under A2.

2. **A3 - Foreign Financial Assets including shares in a foreign company**: A3 is generally used for reporting other types of foreign financial assets, such as shares or securities held with a foreign broker. If you hold foreign stocks (shares in foreign companies) with your foreign broker, you would report these under A3.

Since you have both cash balance and foreign stocks with your foreign broker, you should consider reporting these as follows:

- **Cash Balance**: If your brokerage account includes a foreign bank account where cash balances are held, report this under A2.
- **Foreign Stocks**: Report any foreign stocks or securities (shares in foreign companies) held through your foreign brokerage account under A3.

Ensure you accurately report the details of each asset category in the respective sections (A2 for cash balances in foreign bank accounts associated with the brokerage, and A3 for foreign stocks and other financial assets held with the broker). This helps in complying with Indian tax reporting requirements related to foreign assets.

For precise guidance tailored to your specific situation, especially considering the complexities involved with foreign assets and taxation, consulting with a tax advisor or chartered accountant familiar with international tax laws and Indian tax reporting requirements is recommended. They can provide personalized advice based on your holdings and the relevant tax regulations.