- The requirements are applicable for those filing ITR 2 and ITR 3.
- The taxpayers who have total taxable income above 50 lakhs in the 2019-2020 financial year are only liable to disclose their Assets and Liabilities in their ITR.
- As of 31 March 2020, taxpayers must provide details of assets and liabilities under the AL (Assets and Liabilities) schedule of the ITR.
Some taxpayers are supposed to disclose in their ITR information of certain properties they own as well as liabilities owed by them. This article discusses who is supposed to disclose these specifics and what assets and liabilities under this regulation are covered.
Not all taxpayers have to reveal their liabilities and assets. The obligation to include details of such assets and liabilities applies only to taxpayers who, after all the deductions, have total taxable income above 50 lakhs in the 2019-2020 financial year, even if they are not engaged in company. The individuals who are liable for the filing of ITR 1 (Sahaj) or ITR 4 (Sugam) are therefore beyond the scope of this provision. However, the assets already mentioned in the balance sheet are not required to be re-disclosed for those who are engaged in business and furnish their balance sheet. These provisions are applicable for those filing ITR 2 and ITR 3.
Assets to be Disclosed:
As of 31 March 2020, under the AL (Assets and Liabilities) schedule of ITR, both the categories (ITR 2 and ITR 3) of taxpayers have to provide information of assets and liabilities. It is also not required to report assets disposed of during the year. The details of immovable assets and movable properties must be disclosed. If you are a shareholder in a company or a member of an organization, the specifics of your involvement in the company or association must be conveyed to the entity’s PAN.
Disclosure for Immovable Properties:
Under immovable assets, whether the ownership is single or joint, you must include details of the land and building you own. You have to specify various details when furnishing the details, such as the description, cost and address with a PIN, where the property is located. The particulars of all immovable property obtained by gifts or as inheritance must also be revealed. There would be no problem in revealing the property details and address, but when mentioning the cost of such property, you might face difficulties. In such a case, whether purchased prior to that date or value on the date on which you acquired it, you will have to show the market value of such property as on 1 April 2001, in the condition that the costs for which the previous owner had acquired it are not available with you.
Disclosure of Movable Assets:
You must reveal the amount of the loan taken for the purchase of such property as well as any money lent on the protection of such property while revealing the liability for any immovable property.
As of 31 March 2020, various assets such as jewellery and bullion, cars, boats, aircraft and yachts, art objects such as paintings, sculpture and drawing, etc., must be disclosed under movable properties. Details of various financial assets such as cash and bank balances, shares and securities, insurance plans, loans and loans and advances, are also required. You must disclose details of the liabilities incurred to obtain or to safeguard the assets mentioned above under the liability section.
For jewellery disclosure, it is necessary to note that you are also expected to report bullion kept in raw form in addition to jewellery information. So, if you own any gold bar or coins, it is also important to furnish the details of it with costs. When presenting bank balance information, it is important to report not only balance details in your savings or current account, but also fixed deposit and recurring deposit details. In addition, do not forget to disclose details of such loans under liability if you’ve used any loan or overdraft facility against such deposits.
As far as life insurance policies are concerned, conventional policies can be treated as investments, but if you survive the policy period, the term insurance plans cannot be treated as an investment if you do not get any money back. However, as there is no difference between conventional policies and term plans, it is suggested to add the aggregate value of premiums paid up to date even on term plans at the expense of such insurance policies. If you own any cars, yachts, boats, aircraft, etc., do not forget to show the vehicle information that are no longer in use and have not yet been discarded or kept as an antique item.
The concept discussed in regard to immovable property would apply in the same way in order to comply with the disclosure provision for properties obtained other than by acquisition.
In addition to the above, citizens are obligated to report in their ITR information of foreign assets or interests in foreign companies, and the concepts disclosed above can also be applicable there.