Do I have to file an ITR if I hold a foreign account?
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Short answer
Yes, if you are resident and ordinarily resident. Section 263(1)(a)(ix) of the Income-tax Act, 2025 requires a resident, other than not ordinarily resident, who at any time in the tax year holds an asset located outside India, including a financial interest in an entity, or has signing authority in any account outside India, to file a return, and section 263(1)(b) makes this apply regardless of income or loss.1 Whether a balance with a foreign payment platform is such an asset depends on how the account is structured.
Many service exporters hold money outside India without thinking of it as a "foreign asset": a US bank account opened during a stint abroad, a multi-currency account with a fintech, signing authority on a client's or employer's foreign account, or shares in a US startup received as part payment. For tax year 2026-27, section 263 of the Income-tax Act, 2025 links these to a duty to file a return.1
What does section 263 say?
Section 263(1)(a)(ix) lists, among those who must file, a person who is resident, other than not ordinarily resident, and who at any time during the tax year:1
- holds, as a beneficial owner or otherwise, any asset (including any financial interest in an entity) located outside India, or has signing authority in any account located outside India; or
- is a beneficiary of any asset located outside India, unless the income from it is included in another person's income under the first limb.
Section 263(1)(b) says such persons file "on or before the due date regardless of income or loss".1 Section 263(2)(b) also lets the Board require particulars of assets and of bank accounts in the return form.1
Who does this catch?
The table applies section 263(1)(a)(ix) to common situations for a resident freelancer.1
| Situation | Return needed regardless of income? |
|---|---|
| Developer holds a US bank account with $200 | Yes |
| Consultant has signing authority on a client's account in Dubai | Yes |
| Designer holds shares in a foreign startup received as fees | Yes |
| Writer is paid into an Indian bank account only | Not on this ground |
| Freelancer has a balance with a payment platform | Depends on whether the balance is an asset located outside India |
What if I am not ordinarily resident?
The rule does not apply to a person who is not ordinarily resident (NOR) under section 6(13), for example an individual who was non-resident in nine of the ten preceding tax years.12 A non-resident is also outside it.1 Residence is explained in Indian tax while living abroad.
Is the income in that account taxed too?
For a resident, income accruing outside India is part of total income under section 5(1), whether or not it is brought to India.3 See is foreign income taxable if I keep it abroad.
Before filing, list every foreign account, platform balance and holding you had during the tax year, and ask a chartered accountant (CA) which ones the return form requires you to report.1 The form for tax year 2026-27 is covered in which ITR form freelancers file.
How did we verify this?
We checked this page against the sources below on 28 October 2026. Read our methodology or report an error.
Frequently asked questions
My income is below the taxable limit. Do I still file?+
Yes, if you are resident (other than not ordinarily resident) and held a foreign asset or signing authority during the tax year. Section 263(1)(b) requires the return regardless of income or loss.1
Does a small or dormant foreign account count?+
Section 263(1)(a)(ix) sets no minimum balance. The test is holding an asset located outside India, or signing authority in an account outside India, at any time during the tax year.1
Does the rule apply to a non-resident?+
No. Section 263(1)(a)(ix) applies to a resident other than not ordinarily resident, whose status is decided under section 6.12
What is the due date if I file only because of the foreign account?+
A freelancer with business or professional income and no audit files by 31 August after the tax year, 31 August 2027 for tax year 2026-27.1
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
Keep reading
Which ITR form should an Indian freelancer with foreign clients file?
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Whether an Indian resident freelancer pays tax on fees left in a foreign bank or platform balance, what NOR status changes, and the return and FEMA points.
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