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New tax norms target black money but make filing cumbersome: Experts
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By Biswajit ChoudhuryNew
tax norms target black money but make filing cumbersome: Experts
By
Biswajit Choudhury
New Delhi, April 18 The government may intend to target black money
with a new income tax returns form, mandating assessees to disclose their bank
accounts and details of foreign visits, but it also makes filing of returns
that much more cumbersome, experts maintain.
"The disclosure requirement on number of accounts and those opened and
closed is interesting," Vineet Agarwal, partner, international accounting
firm KPMG in India, told IANS, referring to the norms notified by the Central
Board of Direct Taxes (CBDT) applicable from the 2015-16 assessment year.
"A lot of people have a number of bank accounts. They also leave some of
these accounts passive, or inactive. These have to be divulged in the new set
of forms for e-filing of returns," he added.
But one doubt remains. "A question that needs clarification in respect of
disclosure requirements of is whether the 'all bank accounts' includes
recurring deposits, fixed deposits, time deposits and loan acounts, besides
saving and current accounts," said Sandeep Kanoi, a chartered accountant.
The assessee, as per the new norms, also has to furnish the name of the bank,
account number, its address, the Indian Financial System Code (IFSC code) and
any possible joint account holder. But one demand, of not having to send a
physical form after electronic filing, has not been met.
On foreign travel, the returns are required to disclose the passport number of
the assessee, the countries and the frequency of visit in the financial year,
as also the expenses incurred, if any, from own sources of income on such
trips.
The move, experts said, is to ostensibly check black money and also have
written proof from an assessee, that can be used in a court of law, regarding
the foreign assets and income abroad in terms of what has been disclosed and
what has not.
But that is one aspect. Assessees will also have to track their overseas
travel.
"Given that disclosures are required for the financial year 2014-15, one
would need to collate and analyse the expenses incurred on trips made in the
recently-concluded tax year," Tapati Ghose, partner, Deloitte Haskins and
Sells LLP, said.
"Steps have also been taken to arrest leakage of tax on Indian income,
with additional reporting requirements like details of all Indian bank
accounts, usage of balance in capital gains schemes in the return and
confirmation that tax residency Certificates have been obtained," she
said.
"It is imperative that the fine print in the return forms and the
instructions to the same are thoroughly analyzed by all individuals filings
returns to understand the implications an applicability in each case."
Some of the significant disclosures required include:
- Mention status of an account: Owner, beneficial-owner or beneficiary
- Furnish account opening date, held since, date of acquisition
- State nature of income earned from various sources, including assets held
- Mention amount taxable and offered in the return
- Disclose details of any other income derived from any other source outside
India
- Report the Aadhaar number if an individual has one
- Provide more details on short-term and long-term capital gains
- Mention if tax relief has been claimed using various tax treaty with other
countries
- Furnish signed copy of physical return.