If a resident holds any shares or financial interest in a foreign entity, then such information is required to be furnished

ONE of the key points proposed in the Union budget 2012 is the compulsory filing of income-tax return by every resident individual or Hindu undivided family (HUF) in relation to assets located outside India.

Keeping with the intention expressed in the budget, the central board of direct taxes (CBDT) has amended income-tax return forms especially to capture data of financial interest in any entity/ properties / assets held outside India. It would also include residents having signing authority in any account located outside India whether or not they earn taxable income. These forms are to be used for the year ended March 31.

Some of the changes that have been brought about in the forms this year are detailed in this article: Furnishing of foreign bank accounts details: Residents, individuals and HUF, will need to furnish the details of any bank accounts that they hold in foreign countries along with the details of the peak balance in rupees held t in these accounts during the year.

Details of financial interest in any entity / p properties / assets held outside India: If a resident holds any shares or financial interest in a foreign entity, then such information is required to be furnished along s with the total cost of investment in rupees. d In view of the same, the ITR-2, ITR-3 and ITR-4 forms have been amended to s seek such information. f It may be noted that though the income-tax return form requires the foreign c assets to be reported in rupees, the tax department has not specified the manner in t which the value needs to be converted a from the foreign currency yet. a E-filing of tax returns: Until last year, taxes payers had the option of filing their return manually or electronically. Now, e-filing of c the tax return has been made mandatory t in the following two cases. First, resident u individuals or HUF who hold assets (including financial interest) outside India or f have a signing authority in a foreign bank account. Second, individuals and HUF whose total income exceeds Rs 10 lakh for the FY 2011­12.

Foreign tax credit: Individuals or HUF who claim a relief on account of foreign taxes paid on doubly taxed income in a foreign jurisdiction, will need to provide details of the foreign jurisdiction, the tax identification number in the foreign country, as well as the details of the income earned, tax paid and the amount of relief claimed.

Some of the important information required to be disclosed in the income-tax return form are: In case, an individual co-owns a house property, then the co-ownership details which includes the name, PAN and ownership share of co-owners.

If you are claiming deductions in case of specified donations, then the details of the donee (name, address and PAN).

Reporting of the unique tax deduction at source (TDS) certificate number and the financial year in which TDS is deducted is required to be reported for TDS on incomes other than salary.

There is also a requirement to calculate the long-term capital gains (LTCG) with and without claiming the benefit of indexation of cost of inflation and report them separately.

With the above changes in the income-tax return forms, the tax authorities seek to make the reporting of individuals and HUFs more transparent and wish to gather more information on their foreign assets.