Make these mandatory disclosures in ITR to avoid getting a notice from tax department

 NEW DELHI: The due date for filing income tax return (ITR) for the financial year 2020-21 is September 30, 2021. It has been observed that in the rush to file ITR, tax filers often commit mistakes in the return and do not make mandatory disclosures. As per income tax rules, it is mandatory to make certain disclosures while filing ITR. Tax filers often miss these disclosures inadvertently. Worth mentioning here is that taxpayers should make these disclosures in order to avoid filing a defective return and getting a notice from tax department.

Here are some mandatory disclosures that should be made while filing ITR:

Details of bank accounts:

A taxpayer needs to mention all his bank accounts in the ITR including those held in joint names. Details such as bank name, account number and IFSC code of the bank need to be mentioned. If you have multiple bank accounts, you need to select one account in which you want to receive refunds.

However, if any of your bank accounts has become dormant for the past three years, then you don’t need to mention that.

Details of unlisted equity shares:

A taxpayer is required to mention details of unlisted equity shares held by him/her. Details such as name and Permanent Account Number (PAN) of the company, number of shares acquired and sold during the year. CA Balwant Jain, Tax and Investment expert said Investments in shares of unlisted foreign companies are also required to be reported in this schedule, even if it is separately reported under the foreign assets schedule. He further added that if an assessee holds shares in an unlisted foreign company and has duly reported the same in Schedule FA(foreign assets), then also he needs to disclose it while filling his ITR. Failing this, the I-T Department may treat the return as defective, and ask the assessee to revise it.”

Directorship in Indian or foreign companies:

If you are a director in any Indian or foreign company then you need to mention that in your ITR. Details such as director identification number (DIN), name, type and PAN of the company need to be mentioned. Also, you need to report if shares of the company are listed on a recognised stock exchange.

Worth mentioning here is that if you are director in a company then you have to file ITR in form ITR-2 or ITR-3. Choosing the wrong form may lead to defective filing and the return may become invalid and the assessee will be deemed to have failed to file the return.”

Schedule assets and liabilities:

Those taxpayers who have net taxable income of more than Rs 50 lakh in a financial year are required to report details of specified assets such as land, building, movable assets, bank accounts, shares & bonds and the corresponding liabilities against those assets if any. This disclosure is to be made in Schedule AL (Assets and Liabilities).

Schedule of foreign assets:

Ordinarily Resident taxpayers are required to disclose details of their assets held outside India (both as owner and as beneficiary). This is required even if you hold it for a single day. Worth mentioning here is that undisclosed foreign income or assets is taxed at 30% plus a penalty, which is equal to thrice the tax payable on the income or value of the undisclosed asset. In addition to tax and penalty on concealed income, an additional penalty of Rs 10 lakh may be levied for failure to disclose such foreign assets/income in ITR.

The foreign assets that need to be disclosed are Foreign depository accounts, foreign custodial accounts, foreign equity and debt interest, shares held in any foreign company, details of trusts created under the laws of another country in which the assessee is a trustee and any other capital asset.

Source: ETNOWNEWS.COM