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. Disclosure of Agriculture Income
8. Disclosure of Clubbing of Income
9. Disclosure of GST details
10. Disclosure of Exempt Income
11. Disclosure of Carry Forward losses
12. 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. Disclosure of Agriculture Income

Despite being exempt, agriculture income must be declared on the income tax return. If the agricultural income exceeds Rs 5,00,000, the following information must be included in the income tax return:

• Name of the District of Agriculture land
• Pincode of the district of agriculture land
• Measurement of Agriculture land in Acres
• Ownership Status (owned/Held on Lease)
  • Owned: It is fully owned by you
  • Held in lease: You have temporary rights on land for usage but the original ownership lies with other person
• Use Status (Irrigated/Rain Fed)
  • Irrigated: It means the agriculture land that is supplied with water for cultivation of crops.
  • Rain Fed: It means the agriculture land that is supplied with rain water for cultivation of crops.

NOTE: The taxpayer is required to be report Gross Agriculture income and expenses incurred for the same.

Refer Agriculture Income Tax - Explained for detailed information

8. Disclosure of Clubbing of Income

In certain circumstances, the assessee may combine the income of other individuals, such as spouses, in the income tax return. In these instances, the taxpayer is obligated to provide the following information in their income tax return:

• Name of specified person (whose income is included in taxpayer ITR)
• Relationship with taxpayer (spouse/son’s wife/Minor child/Sibling/parents/other)
• PAN / Aadhaar of specified person
• Nature of Income ( Salary/ House property/ Capital gain/Other Income/Business/Profession/Exempt Income)
• Amount of Income

Refer Clubbing of Income – All you need to know for detailed information

9. Disclosure of GST details

If the taxpayer has a business or profession and a GST number, they are obligated to disclose the details of GST in their income tax return.

• GST Number
• Total turnover as per GST Return

Refer Registration process of Goods and Service Tax for detailed information

10. Disclosure of Exempt Income

In general, taxpayers do not disclose income that is not subject to taxation (Exempt Income) in their income tax returns. However, the incomes must be disclosed in the income tax return, despite the fact that they are tax-exempt. Reporting the subsequent information is mandatory:

• Nature of Income (Gifts from relatives, PPF interest, sale of rural agriculture land etc)
• Amount of Income

Refer Guide on Exempt Income from IT Perspective for detailed information

11. Disclosure of Carry Forward losses

In general, taxpayers do not disclose the specifics of their carry-forward losses in their annual income tax returns unless they have earned profits. However, it is advisable to disclose the carry-forward losses annually until they reach eight years in order to take advantage of the set-off conditions. The following information must be included in the income tax return:

• Assessment year (in which you have losses)
• Date of filing of Income tax return
• Amount of Loss and head under which you have loss (House property, capital gains, business etc)

Refer How to Carry Forward Capital Losses, Set Off Rules for detailed information

12. 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