Taxpayers will have to disclose details of every share sale made by them during the ITR filing in the financial year 2020-2021, as per report. This is to compute the long-term tax gain liabilities. This in a way against the government efforts to make the taxpaying experience as smooth as possible.
Usually, the ITR- 2 filling, which business and professionals fill, have finer details such as international securities identification number (ISIN), share name, quantity, sale, purchase price among other details. It is even asking for a fair market value of the share.
In addition, the e-filing form does not have an option to fill a summary or aggregate capital gains. Experts believe that this will just make the whole process cumbersome as such details are usually asked by the income tax during tax scrutiny. If the data or transactions are numerous, it will be a hassle for taxpayers.
This decision was taken by the Income Tax (I-T) department to make the disclosure process more detailed. It is also said that the I-T department has found that many taxpayers make high-value market share transactions yet their taxable income is low.
This is mainly because many taxpayers are filling for no tax liability and which is not going well with the government’s plan to increase its direct taxes.
On Tuesday, Parliament approved a taxation bill 2020 to amend eight taxation laws for giving compliance relief during the COVID-19 pandemic. It also extends tax exemption for contribution in PM CARES Fund. But this I-T department’s new compliance filing will be cumbersome.