Foreign RSUs, dividends and foreign tax credit: How a tech professional resolved a Schedule FA notice?

Working with an experienced tax expert ensures that complex international disclosures are filed accurately, helping you resolve tax notices smoothly.

Written by Archit Gupta

July 31, 2026 13:30 IST

First, there was a difference in reporting periods. Indian tax filings cover the April-to-March financial year, but foreign assets under Schedule FA must be declared based on the calendar year ending December 31.

While tax was deducted at the source in the foreign country, Siva had omitted this income from his Indian tax return and had not filed Form 67 to claim the corresponding Foreign Tax Credit under Section 90.

Siva, a senior software engineer, received a tax notice from the Income Tax Department regarding his foreign assets. The department’s automated data-exchange systems had flagged a mismatch between the international financial data received from overseas tax authorities and the details reported in his tax return. Because Siva’s employer had already deducted tax on his Restricted Stock Units at the time of vesting, he assumed no separate disclosures were needed.

Siva tried to respond to the notice on his own through the income tax portal, but he quickly ran into practical issues. The foreign brokerage statements were formatted differently from standard Indian tax documents, and converting the multi-currency transaction records created room for error. Realizing that an incorrect response could lead to penalties, Siva reached out to ClearTax for expert assistance.

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ClearTax assigned senior tax consultant CA Divya Aggarwal to manage the case. Divya reviewed Siva’s financial documents, including his foreign stock statements, tax certificates, and Form 16. Her review highlighted the specific reasons for the tax notice.

First, there was a difference in reporting periods. Indian tax filings cover the April-to-March financial year, but foreign assets under Schedule FA must be declared based on the calendar year ending December 31. This timing gap created a mismatch with the income tax department’s records. Second, Siva’s foreign stock holdings had earned dividend income overseas. While tax was deducted at the source in the foreign country, Siva had omitted this income from his Indian tax return and had not filed Form 67 to claim the corresponding Foreign Tax Credit under Section 90.

To clear the notice, Divya updated Siva’s filings. She aligned his foreign asset disclosures in Schedule FA to the December 31 calendar-year period, accurately reporting the peak and closing values. She then added the foreign dividend income to his total taxable earnings and filed Form 67 on the portal to credit the foreign taxes already paid, preventing double taxation. Once the revised details were verified and submitted, the tax department closed the notice with no additional penalties.