Mandatory Disclosure in Income Tax Return

This document covers

1. Disclosure of All Bank Accounts
2. Disclosure of Directorship/ Partnership
3. Disclosure of Unlisted Shares
4. Disclosure of Assets and Liabilities
5. Disclosure of Foreign Assets
6. Disclosure of Residential Status and No of days of Stay in India
7. Other Disclosures

1. Disclosure of All Bank Accounts

• The Taxpayers are required to mention all the Bank account Numbers and IFSC codes which are active as on 31st March every year in Income Tax Returns.
• The Taxpayers are not required to report dormant accounts (Not active).
• The Taxpayers are required to select 1 account as primary account for receiving refund.

NOTE: w.e.f FY 2023-24, the taxpayers are required to report type of account i.e., Savings Account, Current Account, Cash Credit Account, Over draft account, Non Resident Account and Others.

2. Disclosure of Directorship/ Partnership

• If a taxpayer is a director in any private limited company /One Person Company (OPC)/ Public Limited Company and holding active DIN at any time during the financial year, he is required to mention the following details in Income Tax Return
  • Name of Company
  • Type of Company (Domestic/Foreign)
  • PAN of Company
  • Whether Shares are listed or unlisted
  • DIN
• If a taxpayer is a partner in any partnership firm /LLP at any time during the financial year, he is required to mention the following details in Income Tax Return
  • Name of the Firm/LLP
  • PAN of the Firm/LLP

3. Disclosure of Unlisted Shares

• It is common for the taxpayers to hold shares in private companies, foreign shares etc. These are called unlisted shares as they are not listed on stock exchange.
• If a taxpayer is holding any unlisted shares at any time during the financial year, he is required to disclose the below details in Income Tax Return
  • Name of Company
  • Type of Company (Domestic/Foreign)
  • Pan of Company
  • Opening Balance - Number of shares and Cost of Acquisition
  • Shares acquired during the Year - Number of shares, Date of subscription/purchase, Face value per share, Issue price per share Purchase price per share
  • Shares transferred during the year - Number of shares, Sale consideration.
  • Closing balance - Number of shares, Cost of acquisition

4. Disclosure of Assets and Liabilities

• If a taxpayer’s Net Total Income exceeds Rs 50 lakhs in a financial year, he is required to report Assets and Liabilities mandatorily.
• The following details are required to be reported under schedule Assets and Liabilities.
  • Immovable Property
  • Movable Property
  • Interest held in the assets of a firm or AOP as a partner or member thereof.
  • Liabilities in relation to above assets

5. Disclosure of Foreign Assets

• Foreign asset disclosure is required for the preparation of income tax returns (ITR).
• Every Resident taxpayer who is having any foreign asset needs to report the assets under the Schedule Foreign Assets
• The following details are required to be reported under schedule Foreign Assets
  • Foreign Depository Accounts (Like Bank Accounts, Term Deposits in foreign banks etc)
  • Foreign Custodial Accounts
  • Foreign Equity and Debt interest(Like Shares, Mutual Funds, RSU, ESOP, ESPP etc)
  • Foreign Cash value insurance contract or annuity contract (Like Life Insurance and others)
  • Financial interest in any entity (Companies, Partnerships, LLP’s outside India)
  • Immovable property (House, Buildings, Land etc)
  • Any other capital asset (jewellery, Vehicles, Paintings etc)
  • Accounts of Signing Authorities
  • Trusts created in the foreign country
  • Other income from Foreign sources

6. Disclosure of Residential Status and No of days of Stay in India

• Generally, the taxpayers don't report the correct residential status while filing Income Tax return. Reporting of correct residential status is mandatory as it determines the taxability of global Income.
• If you are Non-Resident of India, it is mandatory to disclose your status as NRI
• If you are Non Resident of India, you need to disclose Country of Residence and Tax Identification Number (TIN). If TIN is not available, you are required to disclose Passport Number
• NRI's are required to mention No of days of stay in India in Financial year and total number of days of stay in India during 4 preceding years

7. Other Disclosures

• Amount or aggregate of amounts of deposit exceeding Rs. 1 Crore in one or more current account during the previous year
• Amount of expenditure spent on travel to a foreign country on self or other persons exceeding Rs 2 lakhs
• Amount of expenditure spent on electricity exceeding Rs 1 lakh