CBDT issues Clarifications on filling-up of the ITR Forms [Read Circular]

ITR 1 - ITR Forms - ITR - Taxscan

The Central Board of Direct Taxes ( CBDT ) has issued Clarifications in respect of filling-up of the ITR forms for the Assessment Year 2019-20.

In a circular issued by CBDT has said that, In ITR Form-2 and ITR Form-3, in Part-A General, at column (h), the taxpayer is required to state whether he was Director in a company at any time during the previous year. In case of an affirmative answer, the taxpayer is further required to disclose following information relating to each company in which he was a Director:- (a) Name of Company (b) PAN (c) Whether its shares are listed or unlisted (d) Director Identification Number (DIN).

With regarding to non-residents are required to pay tax only in respect of income received in India or income accruing or arising in India. Nonresidents are not required to disclose their assets outside India. Therefore, non-residents should not be required to disclose details of directorship in foreign companies. The disclosure requirement in ITR forms should be limited only to assets and incomes which have a nexus with India.

The Circular also stated that the disclosure requirement in ITR forms in respect of directorship in a company is meant only for the purpose of reporting. The details entered in this column are, in general, not relevant for computation of total income or tax liability of the assessee. As such, the requirement to disclose directorship in a foreign company by a non-resident taxpayer does not tantamount to the disclosure of any foreign source income or foreign asset held by such taxpayer.

The Circular also said that, a non-resident shall not be required to disclose details of his directorship in a foreign company, which does not have any income received in India, or accruing or arising in India. In other words, a non-resident taxpayer who is Director only in a foreign company, which does not have any income received in India, or accruing or arising in India, should answer the relevant question in the negative, whereupon he would not be required to disclose details of such foreign company. It is further clarified that a non-resident taxpayer, who is Director in a domestic company and also in a foreign company, which does not have any income received in India, or accruing or arising in India, should answer the relevant question in the affirmative, and provide details of directorship in the domestic company only. It is also clarified that a resident taxpayer would continue to be required to disclose details of his directorship in any company, including foreign company, in the relevant column.

Further, in ITR Form-2, ITR Form-3, ITR Form-5, ITR Form-6 and ITR Form-7, in Part-B-TTI, before the verification part, a taxpayer, who is resident in India, is required to state whether he had any time during the previous year:- (a) held, as beneficial owner, beneficiary or otherwise, any asset (including financial interest in any entity) located outside India; or (b) had signing authority in any account located outside India; or (c) had income from any source outside India?

While concluding the circular, the department also said that, a taxpayer shall be required to answer the
relevant question in the affirmative, only if he has held the foreign assets etc. at any time during the “previous year” (in India) as also at any time during the “relevant accounting period” (in the foreign tax jurisdiction), and fill up Schedule FA accordingly.

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