Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

401K reporting in ITR2 schedule FA

Suresh (engineer) (33 Points)

06 August 2020

Hello experts, I am a resident filing ITR2 and have 401K funds from my previous employers in USA.

Where exactly I should report these 401K funds in schedule FA?

I found in Schedule FA, sections A1 to A4 or B to G are not clearly lising for a retirement account details.

something close seems to be Section D, "Details of any other Capital Asset held (including any beneficial interest) at any time during the relevant accounting period"., whether this is the right place for reporting a foreign retirement fund such as 401K?

Thanks,

Suresh

Reply
Follow
Share

2 Replies

Nineth (Engineer) (30 Points)
Replied 30 December 2020

I think it would be Section B because none of the others fit well. The definition of 'Capital Asset' per Section 2(14) of the Income Tax Act doesn't seem to cover such 401k accounts (https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx ). So, Section D doesn't seem to be a perfect fit. Section A2 (foreign custodial accounts) appears to fit but some of the fields like the last three aren't consistent with a 401k kind of account. Section E's intent appears to be for those accounts that are owned by others but where you have signing authority. On the other hand, Schedule B (Details of Financial Interest in any Entity) is generic enough to fit. The institution maintaining the 401k account would meet the definition of a "Financial Institution". Unfortunately, Section 2 of the Act which deals with definitions doesn't define things like "Depository Account", "Custodial Account", "Financial Institution", etc. These are instead defined in Section 114F and also elaborated with similar language in/for the DTAAs.

https://www.incometaxindia.gov.in/Rules/Income-Tax%20Rules/ITR114F.htm#:~:text=%22custodial%20account%22%20means%20an%20account,(i)