Mandatory Disclosure in Income Tax Return

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Mandatory Disclosure in Income Tax Return

All individuals earning more than the Basic Exemption Limit must file an income tax return, but many fail to understand the disclosure requirements, which can result in penalties.

The disclosures that needs to be made while filing income tax returns are as follows

1. Disclosure of All Bank Accounts

  • The Taxpayers are required to mention all the Bank account Numbers and IFSC codes which are active as on 31st March every year in Income Tax Returns.
  • The Taxpayers are not required to report dormant accounts (Not active).
  • The Taxpayers are required to select 1 account as primary account for receiving refund.

2. Disclosure of Directorship/ Partnership

If a taxpayer is a director in any private limited company /One Person Company (OPC)/ Public Limited Company and holding active DIN at any time during the financial year, he is required to mention the following details in Income Tax Return

  • Name of Company
  • Type of Company (Domestic/Foreign)
  • PAN of Company
  • Whether Shares are listed or unlisted
  • DIN

If a taxpayer is a partner in any partnership firm /LLP at any time during the financial year, he is required to mention the following details in Income Tax Return

  • It is common for the taxpayers to hold shares in private companies, foreign shares etc. These are called unlisted shares as they are not listed on stock exchange.
  • If a taxpayer is holding any unlisted shares at any time during the financial year, he is required to disclose the below details in Income Tax Return

3. Disclosure of Unlisted Shares

  • Name of the Firm/LLP
  • PAN of the Firm/LLP
  • Name of Company
  • Type of Company (Domestic/Foreign)
  • Pan of Company
  • Opening Balance - Number of shares and Cost of Acquisition
  • Shares acquired during the Year - Number of shares, Date of subscription/purchase, Face value per share, Issue price per share Purchase price per share
  • Shares transferred during the year - Number of shares, Sale consideration
  • Closing balance - Number of shares, Cost of acquisition

4. Disclosure of Assets and Liabilities

  • If a taxpayer’s Net Total Income exceeds Rs 50 lakhs in a financial year, he is required to report Assets and Liabilities mandatorily.
  • The following details are required to be reported under schedule Assets and Liabilities.

5. Information required for reporting Foreign Assets

  • Immovable Property
  • Movable Property
  • Interest held in the assets of a firm or AOP as a partner or member thereof.
  • Liabilities in relation to above assets

5. Disclosure of Foreign Assets

  • Foreign asset disclosure is required for the preparation of income tax returns (ITR).
  • Every Resident taxpayer who is having any foreign asset needs to report the assets under the Schedule Foreign Assets
  • The following details are required to be reported under schedule Foreign Assets
  • Foreign Depository Accounts (Like Bank Accounts, Term Deposits in foreign banks etc)
  • Foreign Custodial Accounts
  • Foreign Equity and Debt interest(Like Shares, Mutual Funds, RSU, ESOP, ESPP etc)
  • Foreign Cash value insurance contract or annuity contract (Like Life Insurance and others)
  • Financial interest in any entity (Companies, Partnerships, LLP’s outside India)
  • Immovable property (House, Buildings, Land etc)
  • Any other capital asset (jewellery, Vehicles, Paintings etc)
  • Accounts of Signing Authorities
  • Trusts created in the foreign country
  • Other income from Foreign sources
Disclaimer: This blog is intended for educational purposes only and should not be interpreted as tax advice. It is recommended to seek guidance from a qualified professional for advice relevant to your circumstances. For any feedback, inquiries, or suggestions, please feel free to reach out to the us at info@zxaccotax.com / Contact No +91 90993 50344.

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