Earn more than 50 lakh, you should declare your income before 31st july.

If your income in the last financial year exceeded Rs 50 lakh, then beware, the Income Tax Department has a new rules which mandates you to declare your net worth — assets and liabilities’ details. The Central Board of Direct Taxes (CBDT) has come out with a new schedule called ‘Schedule AL’ which is now a part of the income tax returns’ forms that need to be filled by July 31.

Under the new rule, the assets have been classified into two categories – immovable and movable assets. You will have to declare your land/ building (including house property) under the ‘immovable assets’ column. ‘Movable assets’ will include cash in hand, vehicles (including your yacht, boats and aircraft), jewellery, bullion, and other valuable metals. Your liabilities, on the other hand, will include outstanding loans, if any.

Why the new rule?
The new rule is a part of the several efforts that the government is making to crack down on unaccounted income and assets in the country. The new requirement has been especially added in the aftermath of the abolition of the wealth tax which exempts individual taxpayers from filing the details of their wealth. Your disclosure will help the government gather information of various high networth individuals in the country, and keep you out of the spotlight for the tax department.

It’s important to be extremely careful while disclosing the assets and liabilities to avoid any penalties or worse, an income tax notice in the future. Declaring your assets and liabilities will also have you on the right side of law.

However, only time will tell how many people actually disclose their assets despite the new rule, apart from the salaried class taxpayers and working professionals. A salaried person, it is observed, usually doesn’t have much to hide, and pays more taxes than any other class of taxpayers. There are approximately 1.5 lakh individuals and HUFs whose income exceeds Rs 50 lakh per annum. We will have to wait any watch how many of them come clean on their wealth.