Your Income Tax Return May Ask You To Disclose All Assets

Your Income Tax Return May Ask You To Disclose All Assets. Many high-networth individuals (HNIs) have not been itrdeclaring all their assets to avoid paying wealth tax. That bliss is set to end soon, with the finance ministry planning to make it mandatory for individuals and Hindu undivided families (HUFs) to report assets and liabilities in income-tax (I-T) return forms. Senior officials in the ministry said this could be notified soon. “Last year, reporting of assets and liabilities was made mandatory for individuals with foreign assets. This year, it might be extended to Indian assets,” said an official. The official added the intention was mainly to get information about those HNIs who had not been paying wealth tax. This year, wealth tax collections are likely to be Rs 866 crore – much less than the Budget estimate of Rs 1,244 crore. For 2013-14, the finance ministry has set a collection target of Rs 950 crore. While declaring the assets, the individual or HUF might have to provide the value of assets on the basis of acquisition cost. For instance, if a house or car was bought in 1998, the cost of the property or the vehicle at the time of purchase would have to be mentioned. Last year, the new disclosure for foreign assets was introduced in ITR2, ITR3 and ITR4, wherein the government asked whether the taxpayer had “any asset outside India or signing authority in any account located outside India”. Individuals with foreign assets cannot file ITR1, which is used by individuals with income from salary/pension, one house and income from other houses. The disclosure provision for domestic assets might be made in all four ITR forms. This proposal is primarily aimed at checking tax evasion and boosting collections. In the Union Budget, the government has levied a surcharge of 10 per cent on annual taxable income above Rs 1 crore and imposed tax deducted at source on transfer of immovable property costing more than Rs 50 lakh. Wealth tax is charged at one per cent of the value of assets exceeding Rs 30 lakh and does not include one residential property and financial assets. References and Source : Businessstandard