Now, Taxman wants a break-up of your net worth
Taxman wants a break-up of your net worth
The new set of Income Tax Returns (ITR) forms which were unveiled on 31st March 2016 by the Central Board of Direct Taxes (CBDT) will include a new schedule — schedule AL to all ITR forms (including ITR 1). In this, if you earn more than Rs 50 lakh a year, the I-T Department wants you to declare the break-up of your net worth.
This new section will be applicable to all individuals and HUFs earning more than Rs 50 lakh a year under which, tax payers will have to declare all their assets and liabilities, as on end of financial year 2015-16.
In the form, assets have been classified under two categories — moveable and immovable. While any land or building including house property fall under immovable assets, the list of Movable assets includes cash in hand (money in your savings accounts), vehicles (including yacht, boats and aircraft), jewellery, bullion and other valuable metals. Liabilities comprise any outstanding loans in your name.
The taxman also wants to know the details of the businesses you earn from, in case you have more than one. A new section has been added to the ITR- 4S seeking code, nature and description of the three main businesses, activities or products that fetch you considerable income. This section earlier existed in only ITR-4. In addition, the new ITR-4S can now be filed by partnership firms as well. All they have to declare is the salary and interest paid to the partners.
Earlier, ITR-4S was a concise form, but now with the addition of three more categories which will require specifying nature of business, salary and interest paid to partners (applicable only to firms) and schedule AL,it will need a lot more effort from those who preferred to file Returns.
On the other hand, individual taxpayers will find it difficult to value their assets themselves, especially jewellery and vehicles. Salaried individuals generally do not usually maintain fair market value of their jewellery or depreciation of vehicles owned by them.
