Instead of simplifying tax laws, the Government seems to be in a mood to make them more complicated. On March 31, 2016, the Income Tax department introduced new Income Tax Returns (ITR) forms. The department wants you to reveal more details about your assets and liabilities in case you earn more than Rs 50 lakh.

The recently introduced ITR forms will have a few additional fields capturing information on assessee’s net worth. In simple words, you will have to give a detailed account of your land holdings, flats, bullion, gold-jewellery, yachts, and aircraft among others.You are expected to report your assets under two different heads

 

• Movable property—this section will include assets such as gold jewellery and cars among others
• Immovable property—this section will include all your real estate assets

 

Furthermore, the taxpayer will have to reveal liabilities he/she may have on disclosed assets. Even the basic ITR i.e. ITR 1 will also seek additional information given above. In short, whether you are a salaried person, with or without more than one house property, or a person earning from business and profession, you are subject to furnishing information on networth.

The IT department has put some extra responsibility on business owners. The taxmen have made a few modifications to ITR- 4S; as per which, now business enterpreneurs would have to divulge information about their top 3 business activities earning them income. Moreover, partnership firms will have to announce partners’ salaries and the amount of interest paid to them.

Are new disclosure norms meritless?
We will know the effectiveness of the new disclosure standards only in future. As far as compliance goes, PersonalFN believes, filling up ITR forms will not be as smooth for many individuals, and they may require a tax expert. Although, it may assist the tax department in better monitoring, assessees could face difficulties, at least initially. The tax office is yet to provide clarification on asset valuation. Imagine yourself disclosing your real estate on market value. How would you find the market value of your flats? Alternatively, should they be valued at cost? If they are valued at cost, the new disclosures may prove to be ineffective. Hopefully, the Government will consider the practical difficulties that the taxpayers will have to face.

What's more, only a select group of assessees are targeted. They may find out ways to dodge the tax liability (if they are inclined to be corrupt) and may disclose only part income and remain below the Rs 50 lakh margin. Increasing compliance burden on salaried employees appears to be pointless. They are the ones who comply most with the tax code. Rather the chances are higher that persons who have lower disclosed incomes, may have disproportionately higher assets.

On the one hand, the Government speaks about cutting discretionary powers of tax officials, which it did in the budget; but on the contrary, it increases the compliance in the other form. What is the net effect? The scope of harassment remains the same.

Instead of seeking disclosure from the assessees about their assets; the Government should work on data integration. While buying property, people give their PAN details. While opting for loans, banks collect much information from the borrowers. What’s the point in making taxpayers disclose the information again? Those who stash black money in real estate will never reveal their assets accurately.

The negative impact of this development is now filing a return would not be “saral” (meaning: easy) as the Government claims.

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tnpillai@gmail.com Apr 08, 2016 I strongly feel- instead of simplifying, the filing is becoming complex. I am not against any requirement of providing datas on assets  etc, more and more dependency of the Tax payer on Auditors is created. Not all are well versed all laws. But throwing such , sometimes innocent infront of AOs, will create a new series of pending issues. Last one week I am trying for my wife, generating a form 16B. Several ack. obtained, finally reads NO DATA EXISTS ? I hold challah, form 26 QB. I have now raised a query with CPC. My point is, just simplify all procedures on filing. Consider previous data memory window and edit facility. T N PILLAI-CHENNAI
tnpillai@gmail.com Apr 08, 2016 I strongly feel- instead of simplifying, the filing is becoming complex. I am not against any requirement of providing datas on assets  etc, more and more dependency of the Tax payer on Auditors is created. Not all are well versed all laws. But throwing such , sometimes innocent infront of AOs, will create a new series of pending issues. Last one week I am trying for my wife, generating a form 16B. Several ack. obtained, finally reads NO DATA EXISTS ? I hold challah, form 26 QB. I have now raised a query with CPC. My point is, just simplify all procedures on filing. Consider previous data memory window and edit facility. T N PILLAI-CHENNAI

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