How to file FBAR (FinCEN 114) for Indian founders with US accounts

FBAR (Report of Foreign Bank and Financial Accounts) is filed on FinCEN Form 114 by US persons - US citizens, US residents (green card holders and substantial-presence-test residents) and US entities - who have signature authority over or financial interest in foreign financial accounts aggregating over USD 10,000 at any point during the calendar year. The filing is annual, electronic, and separate from the income tax return. The penalties for non-filing are severe: USD 10,000+ per non-willful violation, and willful penalties can reach the greater of USD 100,000 or 50% of account balance.

US person includes: US citizens (including dual-citizen Indians), green card holders, foreign nationals meeting the substantial presence test (183 days over current and prior two years weighted), and US-organized entities. An Indian-resident founder who is not a US person does not file FBAR. But an Indian founder who is a green card holder, or who spends significant time in the US, or whose US C-Corp is the account holder, may need to file. Determine status first; the filing question follows.

From a US person's perspective, 'foreign' means non-US. So an Indian resident with a US passport files FBAR for their Indian bank accounts, demat accounts, fixed deposits, EPF accounts, NRE/NRO accounts. Aggregate the highest balance during the year across all foreign accounts; if the total exceeds USD 10,000 at any point in the year, all foreign accounts must be reported on the FBAR. Joint accounts must be reported by both parties. Signature authority over an employer's account (e.g., as a director) also triggers reporting even without ownership.

FBAR is filed electronically through the BSA E-Filing System at bsaefiling.fincen.treas.gov, not through the IRS or in your tax return. For each account, report: maximum value during the year (in USD), name and address of the financial institution, account number, and account type. The form has separate sections for individual accounts, joint accounts, and accounts where you only have signature authority. The due date is 15 April with an automatic extension to 15 October.

FBAR is not the only foreign-account form. US persons may also need to file Form 8938 (Statement of Specified Foreign Financial Assets) with the income tax return if higher thresholds are met (USD 50,000-200,000 for unmarried individuals depending on residence; higher for joint filers and US-residents). Form 5471 is required for US owners of foreign corporations over certain thresholds. Form 3520 for foreign gifts and trusts. The forms have overlapping but distinct triggers; complete a matrix of all foreign-account-related forms for the year before filing.

Do I need to file FBAR if my account had under USD 10,000 all year?
No, if the aggregate maximum across all foreign accounts stayed under USD 10,000 throughout the year. Test the aggregate, not individual accounts. The instant the aggregate crosses USD 10,000 at any point in the year, all foreign accounts become reportable.

What is the penalty for missing FBAR?
Non-willful: USD 10,000+ per violation, with recent court cases capping at per-form rather than per-account. Willful: greater of USD 100,000 or 50% of account balance, per violation per year. The IRS Streamlined Procedures offer reduced-penalty resolution for non-willful late filers.

Does an Indian-resident founder with a US bank account file FBAR?
Only if they are also a US person (citizen, green card, substantial presence). An NRI without US person status does not file FBAR. They may need to report foreign assets in their Indian income tax return under Schedule FA if they qualify as ordinarily resident in India.

Do US C-Corps file FBAR for their accounts?
Yes. A US C-Corp filing FBAR for any non-US accounts it holds. Officers and directors with signature authority over the corporation's foreign accounts may also have individual FBAR obligations even if they have no ownership interest.

When is the FBAR due?
15 April of the following calendar year, with an automatic extension to 15 October (no separate extension request required). The extension is announced annually by FinCEN and has been consistent.

How do I correct a late or missed FBAR?
If non-willful, use the IRS Streamlined Filing Compliance Procedures (Streamlined Foreign Offshore Procedures for non-residents, Streamlined Domestic Offshore for residents). These programs require filing six years of FBAR, three years of amended returns, and a non-willful certification.