Jointly held foreign asset

1. Jointly Held Foreign Account (US stock trading account)

• Since you mentioned 100% of funds are contributed by you, and all income (dividends, capital gains) is shown in your ITR, the entire tax liability is yours.

  • The spouse (if no contribution, no beneficial ownership) is not required to show income or pay tax.

• Schedule FA disclosure in your ITR:

  • You should declare the foreign account in your ITR, including:

    • Country name (US)

    • Institution name

    • Account number (masked)

    • Peak balance during the year

    • Closing balance at year-end

  • Mention it as a joint account in the relevant column. The ITR utility has a field to mark whether it’s an individual, joint (with spouse), or any other type of holding.

• Does spouse need to disclose?

  • If spouse is a resident in India, yes, technically Schedule FA instructions say all joint holders must disclose foreign assets, even if not beneficial owners. But in practice, if you are the sole beneficial owner, it’s sufficient for you to disclose in your ITR.

  • To be extra safe: Your spouse can also declare the account in her Schedule FA with a note that she is a joint holder without beneficial interest (beneficial owner = you).

• Practical Recommendation:

  • If the account is purely for convenience and only you operate and declare tax, keeping it in a single name (yours) avoids ambiguity under Indian compliance.

  • But joint holding is not wrong, provided you disclose properly.

2. Foreign Assets Section – Do you need to list each stock/bond separately?

• Schedule FA requires disclosure of the account and its balances, not each stock or bond transaction.

• You do not need to list every single share or treasury bond separately with acquisition dates.

• Instead, you disclose at a summary level:

  • Type of asset (Equity/Financial Interest)

  • Account details (brokerage account in US)

  • Peak value during the year (USD → INR converted using SBI TTBR on reporting date)

  • Closing value at year-end.

• The individual transactions (purchase/sale of stocks) will be reflected only in:

  • Schedule CG (Capital Gains) for sales during the year,

  • Schedule OS (Other Sources) for dividends.

So, Schedule FA ≠ Transaction statement. It’s asset reporting only.

Feel free to connect if you need assistance in ITR filing !

Thanks & Regards,
CA Damini Agarwal

1. Tax liability – Since you funded 100%, income is taxable only in your hands. Your spouse need not declare or pay tax.

2. Disclosure – Only you must show the account in Schedule FA. Spouse has no disclosure requirement. No need to mention “joint” specifically.

3. Holding style – Single name is cleaner for Indian tax compliance, but joint is okay if only you disclose.

4. Transactions – You don’t report each stock/bond buy. Just disclose the brokerage account as one asset (peak balance, closing balance, and income separately in OS/CG).

1. Spouse who has funded for the stocks is a beneficial and legal owner of the stocks. Mention legal owner in the column of ownership

Other Spouse who has not funded for the stocks but holding it jointly is a beneficiary. Mention beneficiary in the column of ownership. He/she should also disclose the entire joint holding

2. Disclose the holding transaction wise/Item wise

For detailed discussion you may opt for phone consultation

A1 is to report the cash balance

A3 is to report the holding of stocks

• Tax: Since you funded 100%, tax & disclosure are only in your ITR. Spouse need not show anything.

• A1: Report the foreign trading/depository account (peak & closing balance).

• A3: Report the individual shares/bonds held (per security, not every trade).

• No double count: A1 = account, A3 = holdings inside.

• Income: Dividends in OS, capital gains in CG.

You’re right — the ITR Schedule FA (Foreign Assets) is not very clearly worded, and many taxpayers get confused between A1 and A3. Let me carefully clarify based on how the reporting framework is designed:

1. What A1 and A3 stand for

• A1 – Foreign Depository Accounts

  • This refers to foreign brokerage/demat/depository accounts you hold abroad (e.g., TD Ameritrade, Interactive Brokers, Charles Schwab).

  • Here, you disclose:

    • Peak balance during the year, and

    • Closing balance at year end.

  • This covers the account itself, i.e., your ownership of the depository relationship.

• A3 – Foreign Equity and Debt Interest

  • This is for equity or debt securities held abroad (i.e., individual shares, bonds, ETFs, mutual funds).

  • You disclose the value of your holding in each security.

  • Here, the reporting is for the underlying instruments, not just the account.

2. Why both are required

Think of it as two layers of reporting:

• A1 = “I have an account with XYZ foreign broker/depository, and here’s the total value that ever sat in that account.”

• A3 = “Inside that account, I hold Apple stock, Tesla stock, and US Treasury bonds, with these respective values.”

So, there isn’t really a duplication problem — A1 and A3 complement each other.

3. Common Misunderstandings

• It is not account vs. cash. A1 is not limited to cash — it is the overall account (including securities held).

• It is not listed vs. unlisted. Both listed and unlisted foreign securities go in A3.

• If you report in A1 only, you are missing the underlying detail of the securities (which A3 requires).

4. What you did last year

“I reported the cumulative peak and year-end value in A1, and individual stock transactions again in A3.”
That’s actually the correct approach. It may “feel like double counting,” but that’s exactly how the schedules are structured:

• A1 = overall account values.

• A3 = drill-down of the securities held in that account.

5. No explicit CBDT clarification

You’re right — CBDT has never issued a circular specifically reconciling A1 and A3, so taxpayers rely on logical interpretation and past scrutiny experiences. The conservative and safe position is to disclose in both, exactly as you’ve been doing.

Summary Recommendation:

• A1: Report your foreign depository/brokerage account (peak + closing value).

• A3: Report each share/bond/ETF you hold through that account.

• Don’t worry about “double counting” — the ITD expects both disclosures for the same assets.

Thanks & Regards,
CA Damini Agarwal

Spouse Disclosure

No, spouse should NOT declare anything. Since you're the beneficial owner (100% funded), spouse has zero reporting obligations in Schedule FA or income sections.

FSI Negative Capital Gains

• Declare OS: X (positive value as-is)

• Capital Gains: Leave as 0 (system won't accept negative)

• The negative Y will carry forward to offset future gains

A1 Gross Interest Includes:

•  (1) Cash balance interest from broker

•  (2) Treasury bond interest

• (3) Dividends (report in A3/OS instead)

ADR Country Selection

• Select USA (trading location)

• Not Japan (underlying company location)

Ownership Dropdown

• Select "Beneficial Owner" (you funded 100%)

Bottom Line: Only you report everything. Spouse reports nothing since you're the sole beneficial owner despite joint legal title.

1. Should Spouse Disclose the Same Asset?

• Principle: Schedule FA requires disclosure by legal owner, beneficial owner, and beneficiary.

• If your spouse is only a future beneficiary (i.e., has no present ownership rights and cannot derive income yet), technically she is not required to show the asset in A3.

• Correct way:

  • You (legal/beneficial owner) → disclose in A3 with full details.

  • Spouse (future beneficiary, not current) → may disclose in A1 (foreign bank account) or leave blank if she has no current ownership/benefit.

  • A beneficiary is only supposed to disclose if she actually has a present beneficial interest. Future contingent rights do not trigger reporting.

So your spouse should not duplicate your A3 disclosures. Instead, she should only disclose if she is an existing beneficiary of income or rights in that year.

2. Schedule FSI – Negative Capital Gains

• In FSI, fields for OS (Other Sources), CG (Capital Gains) etc. don’t accept negative values.

• Rule of thumb:

  • Report X (the positive income under “Other Sources”).

  • Report 0 for CG if it is negative.

  • You cannot net-off across heads in FSI. Losses are to be carried forward separately in Schedule CFL.

So yes: enter X under OS, 0 under CG, do not adjust X – Y.

3. “Gross Interest Paid/Credited” in A1

This refers only to interest (not dividend):

• Include:

  1. Interest paid on cash balances by broker.

  2. Interest received on treasury bonds.

• Exclude:
  3. Dividend (goes separately under A3 when you report income from equity).

So, only (1) + (2).

4. ADRs in A3 – Country Selection

For ADRs like Toyota Motors ADR traded in USA:

• The underlying equity is Japanese, but the ADR is a US financial instrument issued by a US depository.

• CBDT clarifications and practice: report the country where the asset is actually located/issued.
  So in this case, the country = USA.

Use USA for ADRs purchased in the US.

5. “Owner / Beneficial Owner / Beneficiary” Dropdown

• Since there is no “joint” option:

  • If you hold the shares and fund them → you are the owner.

  • If your spouse’s name is also included but funds are yours → you = beneficial owner, spouse = legal owner (or vice versa, depending on certificate).

  • If spouse is only future beneficiary → do not mark beneficiary in current year.

Always match what’s written on the foreign account/asset documents.

Thanks
Damini