Earning more than Rs 50 lakh? Now declare your net worth

BENGALURU: If you earn more than Rs 50 lakh a year, the I-T Department wants you to declare the break-up of your net worth. In the new set of ITR forms launched on 31st evening, the CBDT has added a new schedule — schedule AL to all ITR forms (including ITR 1).

Under this new section, individuals will have to declare all their assets and liabilities, as on end of financial year 2015-16. The section applies to all individuals and HUFs earning more than Rs 50 lakh a year.

Under the section assets have been classified under two categories — moveable and immovable. One will have to declare any land or building (includes house property) under immovable assets. Movable assets list includes cash in hand (money in your savings account), vehicles (including yacht, boats and aircraft), jewellery, bullion and other valuable metals. Liabilities will include any outstanding loans you have.

"While further instructions on how to value assets are awaited, taxpayers will find it challenging to value their assets themselves, especially jewellery and vehicles. Salaried individuals do not usually maintain fair market value of jewellery owned or written down allowance (depreciation) of vehicles owned by them," says Archit Gupta, CEO and founder, ClearTax.in.

The taxman also wants to know the details of the businesses you earn from, in case you have more than one. A new section has been added to the ITR- 4S seeking code, nature and description of the three main businesses--activities or products that you earn from. This section earlier existed in only ITR-4 only, a much lengthier form compared to ITR-4S. Moreover, the new ITR-4S can now be filed by partnership firms too. All they have to declare is the salary and interest paid to the partners.

ITR-4S was earlier a succinct form, now with three additions -specifying nature of business, salary and interest paid to partners (applicable only to firms) and schedule AL ,it will need a lot more effort from those who preferred to file it," says Gupta.

In this year's Budget, the FM had increased the scope of ITR 4S in this year's budget by bringing professionals earning up to Rs 50 lakh a year under presumptive tax, wherein, they have to pay taxes at a pre-determined rate of 50 per cent of gross receipts. Earlier, under this process of tax-filing, apart from profit declaration no other details were required. The new forms will change this in case you have multiple businesses.

Source : http://economictimes.indiatimes.com