Income tax return: Do it’s important to disclose belongings in your ITR?

In order to detect the circumstances of disproportionate enhance within the belongings as in comparison with recognized supply of revenue, the federal government has mandated particular person tax payers to reveal sure belongings of their ITR or revenue tax return. Let us talk about. 

To whom this requirement applies? 

The provision for disclosure of belongings is relevant for the tax payers whose taxable revenue exceeds the ₹50 lakh in a 12 months. So with such larger threshold restrict smaller taxpayers are spared. Since ITR 1 and ITR 4 can’t be utilized by a taxpayer whose complete revenue exceeds ₹50 lakh, it doesn’t apply these submitting ITR 1 or ITR 4.

Nature of the belongings it’s important to submit within the ITR: 

The format of the schedule AL (assertion of your asset and legal responsibility) is identical for each the ITR type 2 and three besides that for ITR 3 you’re required to furnish particulars of your curiosity within the partnership corporations and so forth the place you might have any shares within the belongings of the agency.  Since the main points of asset to be reported are to be talked about as on thirty first March 2021, you needn’t furnish the main points of any asset which has been disposed off through the 12 months. 

Reporting of immovable Assets: 

For immovable properties i.e. land and constructing owned by you as on thirty first March, 2021, it’s important to present the outline of the asset, its deal with and the  price of such property.  All the belongings owned by it’s important to be disclosed whether or not bought by you or acquired by way of reward or inheritance.  In case of collectively owned property, you might want to furnish the main points as regards your share within the property. While furnishing the determine of price for property not purchased by you and in case you have no idea the fee incurred by the earlier proprietor, and  to play secure, in my view, you’ll be able to disclose the truthful market worth of the property as on 1st April 2001, which is accepted by the revenue tax division for capital good points computations in circumstances belongings had been acquired earlier than 1st April 2001. In case the asset was acquired afterward, you’ll be able to receive a valuation report and state that worth. Alternatively, you’ll be able to state the stamp responsibility valuation of the property on 1st April 2001 or the stamp responsibility worth on the date of acquisition by which it got here to be owned by you.

In case you haven’t obtained possession of an below building property, you needn’t furnish the main points of such property as an below constriction property will not be a constructing. However, to be on safer facet, the mixture quantity paid to the builder will be included below mortgage and advances.

Details of movable belongings: 

Items to be disclosed below the movable belongings embrace varied monetary belongings like money in hand, balances with banks, investments in shares and securities, insurance coverage insurance policies, loans and advances given, and different movable asset like jewelry, bullion, automobiles, yachts, boats and plane, murals and so forth. as on thirty first March 2021. 

The tax payers who’re engaged in any enterprise or occupation and sustaining books of accounts are required to submit the stability sheet of their enterprise within the ITR 3. Such tax payers should furnish the main points of the belongings which aren’t already included of their enterprise stability sheet being furnished within the ITR.

As mentioned within the context of immovable belongings above, for belongings not paid for by you, the identical precept will be adopted for all movable belongings.  You are required to reveal the main points of jewelry and in addition to   bullion held within the type of bar and cash.  For financial institution balances, it’s important to present not solely particulars of saving account but additionally of stability in any sort of a checking account. So guarantee to incorporate stability in recurring deposits, mounted deposits, PPF account, Senior Citizen Saving account. For house mortgage overdraft or any overdraft account disclose the stability if it has optimistic stability on thirty first March 2021. 

As regards worth to be disclosed for insurance coverage insurance policies for conventional life insurance coverage insurance policies chances are you’ll deal with them as investments however in my view the pure time period insurance coverage  plans can’t be handled as insurance coverage as a result of time period plans should not have any survival advantages and in case you survive the time period of insurance coverage you don’t get something. But as differentiation has been made for varied insurance coverage insurance policies and to be on safer facet, I’d urge you to furnish the whole premiums paid upto thirty first March 2021 for all of the life insurance coverage insurance policies for disclosure functions. For disclosure of automobiles it should embrace not solely the motor automobile but additionally two wheelers, yacht, boats, plane and so forth as nicely. For the car not in use and both not  discarded or maintained as vintage objects, you might want to embrace them right here for disclosure objective. Please observe it’s important to disclose the fee solely even for any vintage article. 

The record of immovable belongings will not be exhaustive and sure belongings like stability in provident fund account, NPS, superannuation account and so forth., balances with submit workplaces, cooperative societies and so forth  are usually not required to be disclosed within the ITR. 

If there’s any legal responsibility incurred in relation to any of the belongings included above the worth of legal responsibility has additionally must be disclosed below the pinnacle liabilities. So in case you might have taken a house mortgage, you might want to add the worth of the mortgage excellent as on thirty first March 2021 in liabilities. 

Balwant Jain is a tax and funding professional and will be reached on [email protected] and @jainbalwant on Twitter.

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