Filing your income tax return (ITR) is not just about reporting your income and paying taxes on time. Missing certain disclosures can make your return “defective” and, in some cases,
Sujit Bangar, founder of Taxbuddy, has mentioned eight crucial disclosures that every taxpayer should carefully report while filing ITR.
He wrote on LinkedIn, “Miss one disclosure in your ITR. Your return might get defective. For non-disclosure of foreign assets, Rs 10 lakhs penalty may be applicable.”
If you are a resident and hold overseas assets, like bank accounts, securities, mutual funds, insurance policies, ESOPs, or immovable property, you must disclose them. Even if you have just signing authority in a foreign account, it must be reported.
Non-disclosure can lead to a Rs 10 lakh penalty and even imprisonment of six months to seven years. However, if the total value of movable assets is below Rs 20 lakh, this penalty does not apply.
Any income earned abroad must be reported country-wise, along with the amount and tax paid. Missing this disclosure also attracts the same penalty provisions.
Bought or sold virtual digital assets (VDAs) like Bitcoin, Ethereum, or NFTs? Each transaction must be reported with acquisition date, sale date, cost and sale value.
Sujit Bangar explains, “Losses from crypto cannot be set off under Section 115BBH, so accurate reporting is essential.”
If you held unlisted company shares during the year, you must disclose full details—company-wise purchase and sale dates, quantity, face value and cost. Once you tick “held unlisted equity”, filling this schedule becomes mandatory.
Directors in companies need to disclose their Director Identification Number (DIN), company name, PAN, and whether the company is listed or unlisted.
If your total income exceeds Rs 1 crore, you must report details of immovable property, jewellery, vehicles, shares, mutual funds, loans, advances and liabilities. Values must match your capital gains and portfolio records.
Partners in firms filing ITR-3 should disclose firm-wise details, including PAN, name, share percentage and remuneration terms. These details must tally with the firm’s ITR-5.
Pre-validating your bank account is a must to receive refunds. Also, ensure your return is e-verified within 30 days. Otherwise, it will not be treated as filed.
WHY IT MATTERS
Incorrect or missing disclosures can make your return defective under Section 139(9). “Not disclosing foreign assets is one of the costliest mistakes, it can lead to a Rs 10 lakh penalty,” says Bangar.
Being accurate and careful with disclosures not only avoids penalties but also ensures smooth processing of refunds.