Some of the taxpayers are required to disclose details of certain assets owned by them as well as liabilities owed by them in their ITR. As there is confusion in the minds of taxpayers as to who is required to disclose these details and what assets are covered under this requirement I thought of explaining these requirement through this article.

Persons covered

It is not that all the tax payers have to disclose their assets and liabilities. The requirement to furnish particulars of certain assets and liabilities applies only to the taxpayers who have total taxable income, after all the deductions, exceeding Rs. 50 lakhs in the financial year 2019-2020 even not engaged in business. So the people who are eligible to file the ITR 1 (Sahaj) or ITR 4 (Sugam) are outside the scope of this requirement. However for those who are engaged in business and are furnishing their balance sheet, the assets already included in the balance sheet are not required to be disclosed again here. These requirements are applicable for those who are filing ITR 2 and ITR 3.

Assets required to be disclosed

Both the categories of taxpayers have to furnish the details of assets and liabilities as on 31st March 2020 under the AL(Assets and Liabilities)  schedule of ITR. So assets disposed off during the year are not required to be disclosed. You are required to disclose the particulars of immovable properties and movable property. In case you are  partner of a firm or member of an association, the particulars of your interest in the firm or association needs to be disclosed with PAN of the entity.

Disclosure for immovable properties

Under immovable properties you have to furnish details of land and building owned by you whether singly or jointly. While furnishing the details, you have to mention various details of like description, cost and address of the property with PIN where the property is situated. It is not only the immovable property purchased by you is to be disclosed but also the details of all immovable property acquired through gifts or as inheritance. There will not be any problem in disclosing the description and address of the property but you may face difficulty while mentioning the cost of such property. In such a situation you can indicate the market value of such property as on 1st April 2001 if acquired prior to that date or value on the date on which you acquired it, in case cost for which the previous owner had acquired is not available with you. While disclosing the liability in respect of any immovable property you have to disclose the amount of loan taken for acquiring such property as well as any money borrowed on security of such property.

Disclosure of movable assets

Various assets are required to be disclosed under movable properties. as on 31st March 2020, like Jewellery and bullion, vehicle, boat, aircraft and yatch etc., art items like paintings, sculpture and  drawing etc. You are also required to furnish details of various financial assets like cash and bank balances, shares and securities, insurance policies and loans and loans and advances. Under the liability section you have to disclose details of liabilities incurred for acquiring or on security of the assets specified above.

For disclosure of jewellery it is important to note that in addition to details of jewellery you are also required to disclose bullion held in raw form. So in case you own any gold bar or coins, the particulars thereof with cost is also to be furnished. While furnishing details of  bank balances not only the details of balances in your saving or current account but also details of fixed deposits and recurring deposits have to be disclosed. Moreover in case you have availed any loan or overdraft facility against such deposits, do not forget to disclose details of such loans also under liability.

As far as life insurance policies are concerned, the traditional policies may be treated as investments but the term insurance plans, where you do not get any money back if you survive the policy term, are not to be treated as investment. However since no distinction is made between the traditional policies and term plans, my suggestion would be to include the aggregate value of premiums paid till date even on term plans under cost of such insurance polices. In case you own any vehicles, yatch, boat, aircraft etc, do not forget to disclose the details of the vehicles which are no longer  in use and have not yet been discarded or have been retained and maintained as antique piece

For complying with requirement of disclosure for assets acquired otherwise than by purchase the principle discussed with reference to immovable property will apply here in the same manner.

In addition to the above all the residents are required to disclose the details of foreign assets or interest in foreign entities have to be disclosed in their ITR and the principles disclosed above may be applied there also.

I am sure with the above discussion your doubts are cleared fully.

The writer is a tax and investment expert and can be reached at [email protected]

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May 2021