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New Delhi: Filing of
income tax returns has become more complicated from this year for
those having bank accounts or any other assets overseas. The
government has made it compulsory for Indian as well as expatriate
resident individuals to disclose their overseas assets.
"The overseas assets will not be taxed, but it is an additional
hassle for taxpayers," said Neeru Ahuja, partner, Deloitte Haskins
and Sells.
Apart from the additional hassle, Ahuja said, expatriate resident
individuals find it as an intrusion into their privacy.
"Many people are complaining. Expatriates who have come here to
work even for a short period are required to disclose assets back
home. It is an intrusion into their privacy," Ahuja told IANS.
The Central Board of Direct Taxes (CBDT) recently notified the new
tax return forms for the tax year 2011-12 or assessment year
2012-13, mandating disclosure of foreign assets. In the tax return
forms called ITR 2/3, a new section called 'FA' (Foreign Assets)
has been introduced to disclose foreign assets.
As per the notification, individuals having taxable income
exceeding Rs.1 million (nearly $20,000) and domestic and
expatriate resident individuals with assets located overseas have
to file their returns through the electronic mode.
"Resident individuals are required to file tax returns in India
irrespective of whether they have income chargeable to tax in
India or not," said Ahuja.
As per the Finance Bill 2012, resident individuals having assets,
including financial interest in any entity located outside India
are required to furnish tax returns electronically from financial
year 2011-12 onwards giving complete details of such assets.
In other words, income is not the only criteria to file an income
tax return in India now. Those resident individuals who have
assets outside the country are compulsorily required to file
income tax return, irrespective of whether they have any income
generated in India or not.
The government has made disclosure of foreign assets mandatory in
a bid to trace black money, which has become a big political issue
in the country.
Although there is no official figure, some private research puts
quantum of illicit money held by Indians to the tune of $1.4
trillion.
The government recently released a white paper on black money, but
did not give any estimate.
The government argues that the mandatory disclosure of foreign
assets is aimed at preventing generation and circulation of
unaccounted money and tracking undisclosed assets.
However, such a disclosure could cause undue hardship to
individuals, especially the expatriates' family who qualify as
residents due to physical presence in India. For example, spouses
of foreigners who work in India or Non- Resident Indians (NRIs)
returning to India will invariably need to make disclosures of
their foreign assets.
"It is not clear how the additional information may be used, but
it will cause hardship to genuine tax payers," said Ahuja.
(Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in)
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