Foreign Assets reporting

For an Indian resident who owns 100% of a UAE FZCO, here is how each question plays out under Indian income tax law:

1. Beneficial ownership for Schedule FA: Yes, you are the beneficial owner. Under FEMA and income tax Schedule FA guidance, an individual who directly or indirectly owns or controls a foreign entity is treated as a beneficial owner of its accounts and assets. Report the FZCO accounts and holdings in Schedule FA accordingly.

2. Schedule FA.A3 - shares bought or sold by the FZCO: This part is about equity or preference shares in foreign companies held by YOU as an individual. The FZCO itself is a company, not a security you hold as shares. Report the FZCO itself in Schedule FA.A1 (foreign equity interests) - the company name, jurisdiction (UAE), date of acquisition, and cost. The securities that the FZCO holds inside it are assets of the FZCO, not direct holdings of yours in Schedule FA.

3. Capital gains of the FZCO clubbed with your income: India does not have a formal Controlled Foreign Corporation (CFC) regime as of FY 2026-27. The FZCO capital gains are income of the foreign company, not of you as an individual, as long as dividends are not paid out. If the FZCO pays a dividend to you, that dividend becomes your income and is taxable in your hands in the year of receipt. Retain the FZCO gains at the company level if deferring Indian tax.

This [ITR-2 vs ITR-3 vs ITR-4 guide](https://taxgarden.in/blog/itr-2-vs-itr-3-vs-itr-4-comparison-guide-2026) covers which form to use when you have foreign assets and Schedule FA reporting obligations.

As the FZCO is an independent entity, having 100% of its stocks will not imply that the individual owns the bank or brokerage accounts or even the stocks held by the company. It is the 100% ownership of the individual of the FZCO that needs to be taken into account under the disclosure requirements of Schedule FA (A3) and not the various stocks bought and sold by the FZCO as part of the individual's foreign assets. The disclosure of foreign assets in Schedule FA must necessarily be made by a resident individual who is the beneficial owner or the beneficiary of the foreign assets.

Also, the income of the FZCO cannot be automatically treated as part of the individual's income. But the POEM, dividends and other Indian tax laws have to be considered based on the facts.