Taxpayers have to disclose details of share sales in AY21
A government official said the details are being sought as part of the income tax department’s goal of raising the level of disclosures.Updated: Sep 22, 2020, 04:53 IST
Taxpayers will be required to provide information on every share they have sold in the previous fiscal in their 2020-21 tax returns—with experts likening the extent of details sought to the questions put to someone facing scrutiny.
Individuals other than businessmen or professionals who use ITR-2 form have to fill up finer details of share sales. This includes the international securities identification number (ISIN), share name, quantity, sale and purchase price as well as fair market value at the end of January 2018, in all cases.
Experts said the e-filing form does not offer the option of giving a summary or the aggregate capital gain figures, which would have eliminated the need for filling up the details over 13 columns for each item—cumbersome in cases where data is voluminous.
The information sought in the tax return, experts said, is similar to the kind of details sought at the time of a tax scrutiny.
A government official said the details are being sought as part of the income tax department’s goal of raising the level of disclosures. The department is particularly keen to find cases where individuals have made high-value share market transactions, yet reported meagre taxable income.
The number of people who file tax returns claiming no tax liability has become a major problem for the department, an issue flagged by Prime Minister Narendra Modi in August while scaling up the faceless assessment scheme. Only 15 million people—about a fourth of the 65 million income tax return filers—actually pay any taxes while the rest either claim no tax liability or get their entire tax outgo back as refunds, Mint reported on 14 August.
Modi has appealed to those outside the tax net to come clean and pay taxes.
This addition in ITR is a big burden on all eligible taxpayers, said Arun S. Kutty, senior partner at Virmani, Roy and Kutty, a chartered accountancy firm. “Imagine people invested under, say, a portfolio management scheme, which, on their behalf would have done hundreds of sale/purchases during the year, having to enter each and every entry into their tax return manually,” said Kutty.