New Delhi: People earning more than Rs 50 lakh will find it challenging to declare cost of inherited properties and gift items in the new Income Tax Return (ITR) Form for the Assessment Year 2016-17, say tax experts.
The new ITR, notified by the Central Board of Direct Taxes (CBDT) yesterday, requires people with high income to declare cost of land, building, jewellery, bullion, vehicles, yachts, boats and aircraft, in addition to cash in hand.
A new reporting column 'Asset and Liability at the end of the year (Applicable in a case where total income exceeds Rs 50 lakh)' has been introduced in the ITR.
While tax experts said the CBDT has done the right thing by notifying the ITR Form for Assessment Year 2016-17 in March itself, it has not yet come with the required instructions for determining the cost of immovable and movable assets.
Individuals are required to file their tax return for the previous financial year by July 31.
"Individuals are likely to face a challenge in determining cost for gifted assets (such as jewellery), inherited assets and for assets purchased several years earlier where records have not been retained," said Tapati Ghose, Partner, Deloitte Haskins & Sells LLP.
A threshold limit for each category of asset for disclosure purposes would provide an administrative relief in case assets below a prescribed threshold are exempted from disclosure requirement, Ghosh said.
Amit Maheshwari, Partner, Ashok Maheshwary and Associates said last year there were lot of petitions as the tax department had notified the ITR closer to the last date of filing the returns.
"This time they have done the right thing by coming out with the new ITR at the beginning of the new financial year. I think people have enough time to file their returns," he said.
Filing for the new forms begins with the onset of the new financial year today.
Global tax consultancy firm KPMG said that at this stage it appears that the disclosure required in the new ITR Form is to collate information and evaluate the income vis-à-vis the net wealth of an individual.
"We will have to wait as to how this data is utilised in the future i.e. whether any additional tax is levied on the personal wealth, especially when Wealth tax has been withdrawn in the recent past," it said.
Experts also said new ITR Form will help in dealing with the menace of black money.
Finance Minister Arun Jaitley has already announced a scheme to enable black money holders to come clean by paying 30 per cent tax and 15 per cent penalty. For the purpose, government will provide a compliance window.
Last year he came out with similar scheme for flushing out black money stashed abroad.