FBAR from India, without the USD 10,000 penalty trap.

FBAR applies to a US person with a financial interest in or signatory authority over one or more foreign accounts the aggregate maximum value of which exceeded USD 10,000 at any time during the calendar year.

Three triggers for an Indian founder scenario:

1. Green-card-holder or dual-tax-resident founder with a US entity: the founder is a US person. All non-US accounts (Indian bank, Indian brokerage, Indian mutual funds, Indian PPF, Indian NPS, Indian insurance with cash value) aggregating USD 10,000+ at any point in the year must be reported.
2. Pure Indian-resident founder with a US entity: generally not a US person — no FBAR obligation for Indian accounts. However, if the founder is also a signatory on the US entity's US bank account, no FBAR filing is required for the US account itself (US accounts are not foreign to a US person; and for a non-US-person founder, there is no US person obligation at all).
3. Indian entity holding US bank account: no FBAR — FBAR is a US-person filing, not a US-entity filing. The US bank account held by an Indian company does not trigger FBAR.

The ambiguous case — and the one that catches people — is the Indian founder on an H-1B, L-1, or green card. Once US-person status attaches (183-day substantial-presence test, green-card test, or voluntary election), the FBAR obligation attaches to all non-US accounts worldwide, including those held in India and never used while US-resident.

Reportable foreign accounts include:

• Bank savings and current accounts in India (SBI, HDFC, ICICI, Axis, etc.).
• Fixed deposits, recurring deposits.
• Demat and brokerage accounts (Zerodha, Groww, ICICI Direct, HDFC Securities).
• Mutual fund accounts (if held in a custody arrangement).
• PPF (Public Provident Fund) and EPF (Employee Provident Fund).
• NPS (National Pension System).
• Insurance policies with cash surrender value (ULIPs, endowment plans).
• Any Indian account over which the US person has signatory authority — including spouse-held or company-held accounts if signatory authority exists.

Not reportable: direct real estate holdings, gold held outside a vault account, direct equity shares held in physical form (vanishingly rare after dematerialisation).

Due date: 15 April of the following year, with an automatic 6-month extension to 15 October — no extension form required. In practice almost everyone files by 15 October.

Filing method: electronic only, through the FinCEN BSA E-Filing System at bsaefiling.fincen.treas.gov. No paper filing accepted. Requires creating an individual-filer account (one-time setup, 10-15 minutes).

Information required per account:

• Account number.
• Name and address of the financial institution.
• Type of account (bank, securities, other).
• Maximum value during the calendar year, in USD (translate at the exchange rate on the date of maximum value or the Treasury year-end rate; be consistent).
• Nature of interest (own, joint, signatory only).

FBAR penalties under 31 USC 5321 have two tiers:

• Non-wilful violation: up to USD 10,000 per violation. The IRS has historically interpreted 'per violation' as per account per year, which the US Supreme Court narrowed in Bittner v United States (2023) to per form per year. Still a meaningful penalty for a filer with multiple missed years.
• Wilful violation: up to the greater of USD 100,000 or 50% of the account balance per violation. Criminal referral possible for aggravated cases.

Streamlined Foreign Offshore Procedures (SFOP) is the IRS clean-up route for non-wilful missed FBAR filers who are not under examination: file three years of amended 1040s + six years of back FBARs + a non-wilful certification. No penalty under SFOP if accepted.

Streamlined Domestic Offshore Procedures (SDOP) for US-resident taxpayers has a 5% miscellaneous offshore penalty. Different route; same six-year back-filing requirement.