The new forms are for assessment year 2016-17. The finance ministry published a gazette order in this regard on Wednesday and taxpayers can file their their ITRs till the stipulated deadline of July 31.
The income tax (I-T) department has introduced fresh reporting columns in the new forms (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 lakh. Individuals and entities in this income bracket will have to mention the total cost of such assets. Immovable assets like land and buildings have to be declared as also movable assets like cash in hand, jewellery, bullion, vehicles, etc. The entity reporting these will also have to describe the “liability in relation” to these.
Experts said this was a move in the right direction and would help the government crack down on unaccounted income and assets.
“After the abolition of the wealth tax, individual taxpayers are not required to file details of their specified assets. The disclosure requirements in the new tax forms will help the government compile information on assets and liabilities of individuals above the specified threshold income,” said Vikas Vasal, partner, tax, KPMG in India. “Taxpayers need to be more careful about disclosure requirements in order to avoid penal consequences, as most transactions can be linked through different databases.”
Another analyst with a consultancy firm said while professionals who earned above Rs 50 lakh per annum would declare their wealth, others might not. “This is a logical step after the move last year to make residents declare assets abroad. But, there remains a doubt how many will disclose apart from working professionals. There will be strict penalties and prosecution involved. So, enforcement remains a challenge.”
According to information available in reports to the parliamentary standing committee on finance, there were 565,000 taxpayers earning over Rs 20 lakh in assessment year 2013-14, and about 50,000 taxpayers had declared income of over Rs 1 crore. The department does not provide information for taxpayers earning over Rs 50 lakh.
Revenue Secretary Hasmukh Adhia on Friday tweeted, “The requirement for giving details of assets in ITR form applies only to individuals and HUF (Hindu undivided families) with income more than Rs 50 lakhs per annum. There are only 150,000 such individuals and HUF showing income more than Rs 50 lakhs per annum. So, 99.5 per cent taxpayers are not affected by this requirement. Only the ultra rich will have to give this information in their I-T returns.”