The problem, however, is more in what the CBDT notification does not say. For example, it gives no indication of how the value of the assets will be determined. Tax experts say there is considerable ambiguity over valuing assets and liabilities, which will make filing tax returns a little complicated. Assuming that such declarations will have to mention the acquisition cost, many individuals will find it difficult to determine the cost of gifted assets, inherited assets or assets purchased several years ago, as few will have kept the records. CBDT should have specified this clearly, as the last date for filing such details along with tax returns for the previous financial year is July 31. The absence of such advisories for determining the cost of immovable and movable assets only helps in leaving the door open for individual discretion and thus harassment by tax officers. Such fears are not unwarranted going by past experience.
The bigger issue is the rationale for such voluminous details in ITR forms - after all, almost all the details the I-T department is now asking for from people above a total taxable income of Rs 50 lakh is already accessible to tax officials. So why complicate the paperwork further? The department, it seems, is particularly fond of voluminous returns. For proof, consider this: even the simplest ITR-1 form for salaried individuals having a single house is now a seven-page document, instead of the five pages it was earlier, and has an additional column to mention tax deducted at source. It is unfortunate the I-T department hasn't learnt from past mistakes. Last year, for example, it had to rework the controversial tax return form, which sought information on foreign travel undertaken by taxpayers and the expenditure incurred, as well as details of all bank accounts along with account balances at the end of a year in the tax return forms.
The government has already enacted the Black Money Act, 2015, requiring compulsory disclosure of foreign assets and income and subjecting evaders to stiff penalties and jail terms. It has also introduced legislation aimed at amending the Benami Transactions (Prohibition) Act to help check creation of black money in India, especially in real estate transactions. These were all major changes. Questions about the necessity of the latest move, therefore, are likely to be raised.