To detect cases of disproportionate assets owned by taxpayers as compared to his known sources of income, the income tax department wants taxpayer with income over Rs 50 lakhs to report various assets and liabilities in the income tax return (ITR). The requirement was implemented in 2016 and has since been modified.
To whom is it applicable?
The requirement to report the assets and liabilities is applicable only in cases where your taxable income exceeds Rs 50 lakhs for the year. So the people who are eligible to file the ITR 1 (Sahaj) do not have to furnish these details. In case you are engaged in a business and furnishing your balance sheet in the ITR, you are required to furnish only the details of the assets which are not already disclosed in the balance sheet.
What assets are required to be reported
The format of disclosure of assets and liabilities is the same for all the ITRs except in form ITR 3 and 4 you are required to submit the details of interest in the firm where you are a partner. You are required to furnish the details of your assets and liabilities as on March 31, 2018 under the AL schedule. So any asset disposed off during the year will not form part of the schedule.
Disclosure for immovable properties
You have to disclose the details of immovable properties i.e. land and building owned by you in schedule AL. While submitting the details, you have to mention the description, cost and address of the property. Note that it is not that you have to disclose the assets which are purchased by your own fund but you also have to disclose the details of any immovable asset received as gift or inherited by you. So in case you own any house in your ancestral village which is inherited by you, you have to furnish the details here.
While disclosing the cost in such cases you may face some problems as you may not have all the details. In such a case, you can indicate the market value as on April 1, 2001, as this is acceptable as cost for the capital gains calculation purposes. In case any money is borrowed for the immovable property or is borrowed on security of the asset, the same also needs to be disclosed in the schedule.
Disclosure of movable assets
Under the movable properties, you need to declare financial assets like cash in hand, bank balances, shares and securities, loans and advances, jewellery, bullion, vehicles, yachts, boats and aircraft, work of art as on March 31, 2018.
Traditional insurance policies may be treated as investments but the term insurance plans, where you do not get any money back if you survive the policy term, cannot be treated as investment. However, since no distinction is made between the traditional and term plans, I would advise you to include the premiums paid till date on term plans as well under the head insurance policies.