People earning above Rs.50 lakhs under IT Dept lens
In a bid to check black money, the Income Tax department has released a new ITR (Income Tax Return) form for those earning above Rs.50 lakhs per annum. The new ITR form released on 31 March will have to be filed for the assessment year 2016-17 before 31 July 2016. Under this, the wealthy individuals will have to disclose their movable and immovable properties.
What is ITR?
The Income Tax Act, 1961 mandates individuals to file Income Tax Returns (ITR) with the Income Tax Department at the end of every financial year. The ITR form varies depending on the source of income and category of the assessee.
Why is govt asking for property details?
According to N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy, New Delhi, the tax authorities are trying to get maximum information possible from income tax returns in order to minimize tax evasion. It is in continuation of the government's effort to curb black money circulation. This helps the government evaluate income alongside wealth of individuals, leading to greater compliance.
Wealth tax replaced by surcharge
The finance minister, during the budget 2015-16, had replaced the wealth tax, paid at the rate of 1% of property value if it exceeded Rs.30 lakhs, with a surcharge (@12%) for the super rich (taxable income more than Rs.1 crore).
Govt asks for foreign travel and bank account details
The government, last year, had asked for details of foreign travel including expenditure incurred overseas along with details of all the bank accounts with balances at the end of the year. However, after protests by taxpayers over long and tedious forms, the information requirement was curtailed. The taxpayers were required to disclose their passport number, bank account details without balances, and Aadhaar number.
Government introduces amendment to Benami Transaction Act
The government had introduced an amendment to the Benami Transactions (Prohibition) Act, 1988 to check the generation of black money in the country. The bill would expand the definition of benami transactions, establish an appellate authority to deal with benami transactions, and specify penalties for people entering into benami transactions. The amendment also aimed to overcome the loopholes in the original act.
What all needs to be disclosed?
The new ITR form applies to all individual and Hindu Undivided Families (family consisting of males descended from a common ancestry) earning more than Rs.50 lakhs a year. Declaration of assets will have to be done under 2 heads - immovable assets comprising land and buildings, and movable assets comprising cash, vehicles, jewellery, bullion, etc. Liabilities including outstanding loans also needs to be disclosed.
