Income Tax Return – Extensive Information asked

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Income Tax Return – Extensive Information asked

31st July 2019 is the deadline for filing your income tax return. Tax return forms requires extensive disclosure of foreign assets, Indian assets and liabilities etc. which must be properly disclosed to avoid various undue rigours from tax department.

Recently CBDT has notified revised ITR Forms for AY 2019-20 (pertaining to FY 2018-19) wherein significant amendments have been made in disclosure requirements on foreign assets. Moreover, for the first time CDBT has sought extensive disclosure with respect to investments in unlisted companies and details of residential status outside India if any person claims to be Non Resident in India. Where applicable, proper care must be taken in making such disclosures.

  1. Amendment in disclosure of Foreign Assets:

Under Schedule FA related to disclosure of foreign assets, earlier category of “Foreign bank accounts held” have been replaced with 4 new categories of accounts as stated below:

  1. Foreign Depository Account held;
  2. Foreign Custodial Account held;
  3. Foreign Equity and Debt Interest held;
  4. Foreign Cash Value Insurance contract or Annuity contract held

Full Schedule FA is enclosed herewith for your ready reference.

  1. Extensive disclosure of Investments in unlisted companies:

As per the new forms, If an individual is a shareholder in any unlisted company, he is required to report in his ITR, complete details of shareholding in such unlisted company. Refer table below.

3. Residential status:It would be a challenge to gather and report all these information in ITR for individual assessees. Further such information maybe cross verified with information reported by unlisted companies;

Extensive information and disclosure is sought related to residential status for the first time. In case the residential status of an individual is claimed to be Non – Resident, then he is required to inform jurisdiction and taxpayer identification number of his resident country. Please refer table below:

The above mentioned disclosure requirements assume greater significance due to increased verification by tax department of the disclosures made in ITR with various independent information sought by it from various agencies within and outside India under “Exchange of Information” provisions. Discrepancy in the said information may lead to undue tax liabilities and other rigours under Income Tax Act.Apart from the above there are existing requirements of disclosure of Indian Assets and liabilities in Schedule AL where total income of the assessee exceed Rs. 50 lakhs. Refer Schedule AL attached.

Thus, it is suggested to take a proper professional advice on such reporting requirements and disclosure while filing ITR to avoid any hassle in future.