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| Additional details in tax returns |
| Arnav Pandya / Mumbai Jul 26, 2009, 00:01 IST |
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Besides income and deductions, it is mandatory to mention some other specific details in your individual returns.
The income tax return filing process requires that a lot of information be provided to the tax authorities. Most people gear up by ensuring they have collected all the details necessary for ensuring the correct income is shown and the right deductions are available. This is not enough, as individuals need to ensure there is some additional information in the return. It is the details related to the Annual Information Return (AIR) that is required.
SURPRISE FOR MANY
The fact that information related to the AIR has to be given by the taxpayer might come as a surprise for many. For, the AIR is something which the individual is usually not involved with and hence knows little about it. This refers to the regular reporting to be made to the tax authorities by specific institutions like banks, mutual funds, companies, financial institutions and so on for several high-value transactions undertaken during the year. The tax return requires that the taxpayer also mention some specific details and since this is a requirement, it has to be complied with. And will require that the records of the year are scrutinised, so that this figure can be mentioned. Here are some of the common items that will need to be considered and mentioned in the return.
CASH DEPOSITS
There are several cash deposits made during the year in savings bank accounts. If their total value is Rs 10 lakh or more during the year, then these will have to be mentioned in the return. The important point is that there might be several deposits of a smaller value but if the total touches this figure, then the aggregate has to be mentioned. Further, the details are related only to a savings bank account and do not touch a current bank account, so this also clarifies the exact accounts where the deposits will be counted. The way to calculate this is to look at the passbook or the statements of the bank for the entire year and then total the cash deposits to see if the required limit is touched.
CREDIT CARD PAYMENT
If the amount paid on a credit card is Rs 2 lakh or more during the year, then this will also need to be mentioned. This figure is likely if there is either a family travel abroad or some asset purchase like a computer in the year through the card. The key issue here is not the expense actually made on the card but the amount paid by you against the bills raised in this respect. So, if the amount paid is less, then it need not be mentioned, even if the total expense is more. This will involve totalling all the payments made against the card in the year.
INVESTMENTS
There are several investments which will get covered by these conditions and so all of them need to be monitored. If there are purchases of units of mutual funds of more than Rs 2 lakh in a year, then this has to be mentioned. This means if you have a systematic investment plan of even Rs 20,000 a month, you will be covered by the requirement. The limit is higher at Rs 5 lakh for bonds and debentures issued by companies or an institution, as well as those issued by the Reserve Bank of India. Unless there is a large lumpsum investment made in the bonds or debentures of receipt of some amount, this limit set might not be reached. There is a lower limit of Rs 1 lakh for shares purchased from companies. This refers to shares issued by the company, so will cover a public issue and not those bought from the secondary market. All of these can be known when the total of the investments during the year are taken together into the calculation.
PROPERTY
The final area covered under the area of AIR declaration is the purchase and sale of property when the value of this crosses Rs 30 lakh. This is easier to track and notify, as the number of transactions is not high. Once all these areas are covered, the individual taxpayer will have completed the requirements properly.
The author is a certified financial planner
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