Hello, I got some RSUs and that is put in a Fidelity account. Dividend from the stock is received in the same account. Additionally, Fidelity auto-sweeps any cash into a money market fund. And we also receive dividend on it which also gets reinvested into it. So there is no "cash" in the account but the MMF acts as a wallet. There can be no gain, its unit value is fixed at $1. So basically, we can have sale proceed from stock, dividend from stock, and dividend from "cash". How should I fill schedule FA? In table A3, I am clear about reporting the stock. What about the so-called "cash" which is MMF? Also, is there a need to fill table A2? If yes, how should I add entries? Only one nature of amount can be selected. So multiple entries for same account and peak balance? What if someone remitted to the account or I remitted back to India?
A2 (Custodial Account): Report the Fidelity brokerage account itself (peak + closing balance, country = USA, nature = Investment).
A3 (Financial Interest):
Report RSU shares (equity).
Report MMF sweep as a U.S. mutual fund (not cash).
Schedule OS: Show dividends from RSU + MMF as foreign income.
Form 67: Claim FTC for U.S. tax withheld.
So: A2 = Account, A3 = Assets (RSUs + MMF), OS = Income.
There is no "Investment" option in nature field for the gross amount paid/credited. Can you please open table A2 and check? And how would "investment" even be correct for that field even if it was available? Only the following values are allowed: - Interest - Dividend - Proceeds from sale or redemption of financial assets - Other income - No Amount paid/credited Also, for the MMF, how to correctly report? As sweep happens at different intervals, so the "per lot" entries would be many. Can I collapse MMF into one entry?
Table A2 - Foreign Custodial Account:
For your Fidelity brokerage account with multiple income types, create separate entries using the available nature field options:
Entry 1: Nature = "Dividend" (for RSU stock dividends)
Entry 2: Nature = "Dividend" (for MMF dividends)
Entry 3: Nature = "Proceeds from sale or redemption of financial assets" (if stock sales occurred)
Each entry shows the same peak balance and closing balance but different gross amounts based on income type.
Table A3 - Individual Assets:
RSU stocks: Report each holding separately under foreign equity investments
Money Market Fund: Report as single consolidated entry (foreign mutual fund, not cash) with aggregate balances for the calendar year
Additional Requirements:
Schedule OS: Report all dividend income as foreign source income
Form 67: Claim foreign tax credit for any U.S. withholding taxes
Thank you. Can you also tell which TTBR should be used for reporting INR value of initial cost of acquisition at vest - the merchant banker TTBR used for taxation (who used section 26), or the TTBR of the day as mentioned in [1]? [1] https://www.incometax.gov.in/iec/foportal/sites/default/files/2024-11/Enhancing%20Tax%20Transparency%20on%20Foreign%20Assets%20and%20Income.pdf
Use SBI TTBR on the vesting date (not merchant banker rate).
According to the Income Tax Department guidance document.
Key Points:
Schedule FA: SBI TTBR on vesting date
Taxation/TDS: Merchant banker rate (Rule 26)
Two different rates for the same RSU - this is correct per regulations
The Schedule FA follows specific CRS/FATCA disclosure guidelines, separate from taxation calculations.
Thank you very much. Can you also clarify how the MMF has to be reported with an example (say we got 1 dividend, sold 1 stock, remitted money to India, added money to account)? I mean, what goes into each field of table A3 like name, initial etc., and specifically what would it mean for "gross sale proceeds"? What would it even mean in the context of the cash position MMF? Do we add any usage of MMF in sale proceed? If yes, does that also need to be reported in A2? If yes, wouldn't it lead to double the amount of reporting? -> Stock sold, sale proceeds from stock received and auto-swapped into the MMF. Then when remitting the money to India, same amount is another "sale proceed"? I'm feeling it could be misleading. Do we really need to report the MMF labelled as cash? They call it a core position, please take a look at the following (they didn't effectively withhold any tax): 1) https://workplaceservices.fidelity.com/bin-public/070_NB_SPS_Pages/documents/dcl/shared/StockPlanServices/Core_Account_Updates.pdf 2) https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/mutual-funds/what-is-a-core-position.pdf 3) https://www.fidelity.com/trading/faqs-about-account
This is a subtle area, because Fidelity’s “core position” sweep into MMFs is essentially a cash management feature, but in the ITR Schedule FA format it can look like you are double-counting if you treat it as a normal “security.” Let’s go point by point with your questions.
As per Fidelity’s own explanation (link 2), the core position is not exactly an investment decision you make — it’s just how they hold your uninvested cash (by default in an MMF or FDIC sweep).
The unit value stays fixed at $1 and there’s no capital gain. Only dividends (interest) get credited.
From an Indian reporting standpoint:
A1 (Depository account) → already covers the peak and year-end value of the account, including this sweep balance.
A3 (Equity/Debt holdings) → intended for investments/holdings. Most professionals do not separately report the MMF core position here, because it’s essentially cash.
The dividend from the MMF (the “yield” from cash sweep) should be shown as Foreign Dividend Income in your ITR, not as an asset line item.
👉 So, practically, you can treat the MMF as cash (A1 only), not as a separate A3 holding.
Suppose in one year:
You held 10 Apple shares.
You sold 5 Apple shares for $1,000 → sale proceeds land in core position (MMF).
Apple pays $50 dividend → goes into core position.
Core position (MMF) yields $5 dividend.
You remit $800 back to India.
In Schedule FA:
A1: Fidelity account
Peak balance = max total value (Apple shares + core sweep) during the year.
Year-end balance = whatever remains.
A3:
Apple Inc. shares → Name, country, initial value (cost), peak balance (highest during year), closing balance (# shares × FMV), gross sale proceeds ($1,000).
Core sweep (MMF) → skip reporting as a separate line, since it’s cash.
Dividend reporting:
$50 (Apple dividend) + $5 (MMF yield) → in Schedule OS (Income from Other Sources → “Dividend – Foreign”).
Gross sale proceeds in A3 mean: the total you got when selling securities.
For Apple: $1,000 (before any remittance/transfer).
For MMF: not relevant, because units are redeemed at $1 automatically when you remit or use cash. If you treat MMF as “cash”, you don’t show remittance/redemption as “gross sale proceeds.”
A2 (Foreign Entity interest) applies to owning shares in a company, partnership, trust.
Neither Apple stock (already covered in A3) nor MMF (cash-like) requires A2.
So you can skip A2 unless you separately hold foreign business equity not through a brokerage.
Exactly as you suspected: if you show the MMF in A3, then the same $1,000 from Apple’s sale will appear:
Once as “gross sale proceeds” for Apple.
Again as a “new purchase” into MMF, and again as “sale” when remitting.
That will look like double reporting. That’s why treating MMF as cash (A1 only) is cleaner.
Thanks
Damini
Name: "FYIXX - Fidelity Treasury Money Market Fund (Core Position)"
Initial Cost: $7,100 (dividend $100 + stock sale $5,000 + money added $2,000)
Peak/Closing Balance: Actual MMF balances (convert using TTBR)
Gross Sale Proceeds: $3,000 only (remittance to India)
A2: Reports income by nature (dividend/sale proceeds from stocks)
A3: Reports the MMF as an asset (with only external redemptions as sale proceeds)
No Double Counting: The $5,000 stock sale appears in A2 as stock proceeds, but the auto-sweep into MMF is just internal movement - not a "sale" of MMF units.
Yes, report the MMF - it's technically a mutual fund, but limit "sale proceeds" to actual external transactions only. This avoids misleading double-counting of routine cash management activities
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