In a bid to monitor unaccounted domestic black money, the government has issued a new set of income tax return forms which will require people with an income of more than Rs 50 lakh per annum and owning valuable assets like aircraft or valuable jewellery to disclose them with the I-T department.
The new ITR forms arefor assessment year 2016-17. The Finance Ministry published a gazette order in this regard on March 30 and taxpayers can file their ITRs till the stipulated deadline of July 31.
The department has introduced a fresh reporting column in the new ITRs (ITR-2 and 2A) called 'Asset and Liability at the end of the year' which is applicable in cases where the total income exceeds Rs 50 lakhs. Individuals and entities coming under this income bracket will also have to mention the total cost of such assets.
So, while immovable assets like land and building have to be furnished under the new ITR regime, movable assets like cash in hand, jewellery, bullion, vehicles, yachts, boats and aircraft will also have to be disclosed to the taxman. The entity reporting these high-value possessions will also have to describe their "Liability in relation" to these items.
Experts said that this was a move in the right direction and would help the government crack down on those with unaccounted domestic income and assets.
“Post the abolition of wealth tax, the individual tax payers are not required to file details of their specified assets. The disclosure requirements in the new tax forms, will help government to compile information on assets and liabilities of the individuals above the specified threshold income levels and evaluate the income vis-à-vis their proportionate net wealth,” said Vikas Vasal, Partner, Tax, KPMG in India.
“The tax payers need to be more careful about their disclosure requirements in order to avoid any penal consequences, as most of the transactions can be linked up through different data bases,” Vasal said.
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Another analyst with a consultancy firm said that while upper middle class professionals who earn above Rs 50 lakh per annum will declare their wealth, many other people in the category may not and it will be a challenge for the tax department to go after them. The analyst spoke off-record as he is involved with the Finance Ministry on a consultative basis.
The person also said that the tax department had a database of people in the Rs 50 lakh-1 crore category but the numbers are not in public domain.