The deadline for filing income tax returns (ITR) for the financial year 2022-23 (assessment year 2023-24) is July 31. Last week, the income tax (I-T) department said more than over one crore ITRs have been filed till June 26, hitting the milestone faster than last year.
A last-minute rush to file tax returns can open the window for errors, which may lead to the rejection of your returns by the tax department.
According to Income Tax laws, it is mandatory to make certain disclosures while filing tax returns. Taxpayers should make these disclosures to avoid filing a defective return and getting a notice from the tax authorities. Tax experts say failure to do so can have serious consequences.
Following are some obligatory disclosures required while filing the tax returns
Bank account details
A taxpayer must mention all his bank accounts in the ITR, including joint accounts. Details such as bank name, account number and IFSC code of the bank need to be mentioned. Also, if you have several bank accounts, then you need to select one account in which you want to receive refunds.
Also Read: ITR filing: Know who can and can't file income tax returns using ITR this year
Chartered accountants say failure on the taxpayer’s part to give such details will lead to the ITR filed being treated as defective.
However, dormant accounts, which have not been operational for the past three years, need not be mentioned.
Details of unlisted equity shares
If you are holding unlisted shares of any company, then the details of these shares are to be disclosed in your ITR filing. Information such as the name and Permanent Account Number (PAN) of the company, and the number of shares acquired and sold during the year need to mention in the ITR.
Tax experts say investments in shares of unlisted foreign companies are also required to be reported in this schedule, even if it is separately reported under the foreign assets schedule.
Also Read: Filing income tax return (ITR) for the first time? Here is how to get started
Plus, you cannot file ITR-1 and ITR-4 if you hold unlisted shares anytime during the year. You can file ITR-2 or ITR-3 in this case.
Directorship in Indian or overseas companies
If you are a director in any Indian or foreign company then disclose details of such directorship(s) in their ITR filings. Details such as director identification number (DIN), name, type and PAN of the company need to be mentioned. Further, you need to furnish details if shares of the company are listed on a recognised stock exchange.
A person who is a director in a company can't file a return in form ITR-1 or ITR-4. S/he should file it in form ITR-2 or ITR-3. Selecting the wrong form may lead to defective filing and the return may become invalid.
Schedule assets and liabilities
Individuals with a total income of more than Rs 50 lakh per annum must provide specific details of all their assets along with the liabilities against those assets.
These include land, building, movable assets, and financial assets — bank deposits, shares and securities, cash in hand and so on.
Experts say if valuables whose prices are difficult to determine, then disclose their face value.
Also Read: ITR filing: Know how to file income tax returns without Form 16 in simple steps
Schedule Foreign Assets (FA)
Residents taxpayers are required to give details of ownership of any foreign assets or beneficial interest held in any foreign assets in Schedule Foreign Assets (FA).
Plus, this disclosure is required even if the ownership is just for a single day in the entire financial year.
Misreporting or suppression of income could lead to a huge penalty as high as 200 percent of the tax payable on the misreported income.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
