Non-compliance, underreporting or misreporting will attract a penalty of 50-200 per cent. The authorities may during assessment even tax assets that are 15-20 years old
Absence of records of assets may prove costly for high net worth individuals required to make disclosures as part of their income-tax return filing for assessment year 2016-17.
The government has issued a new set of income tax return (ITR) forms that require people with an annual income of Rs 50 lakh and more to disclose their assets by July 31, the deadline for filing returns.
Immovable assets like land and buildings have to be declared as also movable assets like cash in hand, jewellery, bullion and vehicles. Taxpayers reporting these will also have to describe the “liability in relation” to these.
"The disclosure requirements in the new tax forms are intended to help the government compile information on assets and liabilities of high income individuals and tackle black money," said Rakesh Nangia, managing partner, Nangia & Co.Non-compliance, underreporting or misreporting will attract a penalty of 50-200 per cent. The authorities may during assessment even tax assets that are 15-20 years old.
Non-compliance, underreporting or misreporting will attract a penalty of 50-200 per cent. The authorities may during assessment even tax assets that are 15-20 years old.
“Most taxpayers, especially the salaried class, did not keep records of assets because they never bothered to file wealth tax returns. Now these assets, especially inherited ones, will become a problem,” said Amit Maheshwari, partner Ashok Maheshwary & Associates.
After the abolition of the wealth tax in 2015-16, individual taxpayers were not required to file details of assets. Finance Minister Arun Jaitley, however, increased the super-rich tax to 12 per cent and further to 15 per cent in 2016-17 on individuals with taxable income over Rs 1 crore.
The Income Declaration Scheme 2016 offers a four-month window till September 30 to declare undisclosed assets and income by paying 45 per cent tax and receive immunity from prosecution.
The new provisions will require taxpayers to become more careful to avoid penalty as the government is using non-intrusive measures like PAN and Annual Information Reports to track transactions.
According to information available in reports to the parliamentary standing committee on finance, there were 565,000 taxpayers earning over Rs 20 lakh in assessment year 2013-14, and about 50,000 taxpayers had declared income of over Rs 1 crore. The department does not provide information for taxpayers earning over Rs 50 lakh.