 "Centre to withdraw contentious clauses from new I-T returns forms")
After criticism from various quarters, the government has decided to withdraw certain contentious detail disclosures required in the new income tax return forms.
Sources said it might amend the details required for disclosure of foreign travel, passport copy and expenses incurred.
In the new return forms, tax payers are required to disclose details of the country being visited, number of times visited and expenses incurred from personal sources.
“We are keenly observing the criticism and feedback. We will ensure the new forms are at par with global standards,” said an official.
The tax department wishes to amend the forms quickly, as they want reporting of foreign assets in this year’s filing, based on the new format suggested by the Special Investigative Team on unaccounted money.
Revenue Secretary Shaktikanta Das had disclosed on Saturday that the government would simplify these. "The finance Minister spoke to me from Washington. The forms are being reviewed and will be simplified,” he had said.
A majority of tax experts say India was the only country mandating such disclosures. “Any foreign travel is not a tax event, so a disclosure in tax return forms might not be required. India is the only country which has so far sought disclosure of overseas travel and expenses in the context of disclosures of foreign assets and income,” said Rashi Dhir, senior partner, DMD Advocates.
He added non-resident Indians and expatriates would face greater scrutiny due to such a clause.
Some tax officials said such stringent requirements would also reduce compliance by tax payers. “Also, such reporting would require higher levels of scrutiny and the number of tax officials is not adequate to handle such data,” said one, on condition of anonymity.
Tapati Ghose, partner, Deloitte Haskin & Sells, says the government could consider prescribing a threshold limit for foreign assets, such that it is simple for the individual to collate and easy for the government to administer while making disclosures and examining these.
“There are certain clauses such as income against foreign assets that seem a little vague and subjective. It should be aligned with what is prevailing in other countries,” said Ghose.
Experts also say the requirement to disclose whether one is a beneficiary of a foreign asset and amount of income generated from such assets is onerous and there are chances of non-compliance. “There could be a case where I have been nominated as a beneficiary for a foreign asset and I might not know about it, let alone quantifying income generated from it. The responsibility to report should lie with the owner of the asset and he should be asked to state all the beneficiaries of the asset,” said one.
Sources said it might amend the details required for disclosure of foreign travel, passport copy and expenses incurred.
In the new return forms, tax payers are required to disclose details of the country being visited, number of times visited and expenses incurred from personal sources.
“We are keenly observing the criticism and feedback. We will ensure the new forms are at par with global standards,” said an official.
The tax department wishes to amend the forms quickly, as they want reporting of foreign assets in this year’s filing, based on the new format suggested by the Special Investigative Team on unaccounted money.
Revenue Secretary Shaktikanta Das had disclosed on Saturday that the government would simplify these. "The finance Minister spoke to me from Washington. The forms are being reviewed and will be simplified,” he had said.
A majority of tax experts say India was the only country mandating such disclosures. “Any foreign travel is not a tax event, so a disclosure in tax return forms might not be required. India is the only country which has so far sought disclosure of overseas travel and expenses in the context of disclosures of foreign assets and income,” said Rashi Dhir, senior partner, DMD Advocates.
He added non-resident Indians and expatriates would face greater scrutiny due to such a clause.
Some tax officials said such stringent requirements would also reduce compliance by tax payers. “Also, such reporting would require higher levels of scrutiny and the number of tax officials is not adequate to handle such data,” said one, on condition of anonymity.
Tapati Ghose, partner, Deloitte Haskin & Sells, says the government could consider prescribing a threshold limit for foreign assets, such that it is simple for the individual to collate and easy for the government to administer while making disclosures and examining these.
“There are certain clauses such as income against foreign assets that seem a little vague and subjective. It should be aligned with what is prevailing in other countries,” said Ghose.
Experts also say the requirement to disclose whether one is a beneficiary of a foreign asset and amount of income generated from such assets is onerous and there are chances of non-compliance. “There could be a case where I have been nominated as a beneficiary for a foreign asset and I might not know about it, let alone quantifying income generated from it. The responsibility to report should lie with the owner of the asset and he should be asked to state all the beneficiaries of the asset,” said one.