Schedule FA foreign-asset disclosure under India's Black Money Act applies only to taxpayers classified as Resident and Ordinarily Resident -- a genuine NRI filing as a non-resident generally has no Schedule FA obligation for Sri Lankan assets until their Indian residential status changes. Separately, Sri Lanka's own exchange control regime remains under an active IMF-monitored recovery programme as of 2026, with periodic, conditions-linked easing rather than a full return to pre-2022 rules.
Schedule FA and the Black Money Act -- who actually needs to worry
A common misconception among NRIs is that any foreign bank account or asset must be disclosed on an
Indian tax return. In fact, Schedule FA disclosure under the Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Act, 2015 applies only to taxpayers classified Resident and Ordinarily
Resident (R&OR) under Section 6 of the Income-tax Act -- not to Non-Residents, and generally not to
Resident-but-Not-Ordinarily-Resident (RNOR) taxpayers either. A genuine NRI in Sri Lanka, filing as a
non-resident for Indian tax purposes, has no Schedule FA obligation for Sri Lankan bank accounts,
property, or other Sri Lankan assets.
Sri Lanka's own exchange control regime -- still recovering from the 2022 crisis
Separate from India's own rules, Sri Lanka's foreign exchange regime, administered by the Central Bank
of Sri Lanka under the Foreign Exchange Act No. 12 of 2017, is directly relevant to an NRI settled in Sri
Lanka moving funds out of the country. Sri Lanka imposed strict outward-remittance limitations during its
2022 economic crisis and has been progressively relaxing them since, under an active IMF Extended Fund
Facility programme -- the combined Fifth and Sixth Reviews of that programme were completed on 27 May
2026, releasing further funding and confirming Sri Lanka remains on an IMF-monitored track. This is not
yet a full return to pre-2022 free-flow rules; NRIs moving significant funds out of Sri Lanka should
confirm the currently applicable CBSL exchange control directions rather than relying on older
descriptions of either the crisis-era restrictions or a full, completed liberalization.
Whether Sri Lanka shares financial account data with Indian tax authorities
Unlike several other countries this platform covers, Sri Lanka's current participation in the OECD
Common Reporting Standard (CRS) automatic exchange of information framework was not confirmed as fully
active in this platform's research -- NRIs should not assume CRS-based automatic reporting between Sri
Lanka and India is currently in effect, and should not rely on its absence as a reason to skip any
disclosure that is otherwise legally required (Schedule FA obligations, where applicable, and general
Indian tax filing obligations, do not depend on whether CRS reporting exists).
