CBDT clarifies in respect of filling-up of the ITR forms for the Assessment Year 2019-20

Aug 29, 2019 | by Avantis RegTech Legal Research Team


The Central Board of Direct taxes (CBDT) on August 27, 2019, has clarified in respect of filling-up of the ITR forms for the Assessment Year (AY) 2019-20.

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 certain information relating to each company in which he was a Director.

However, representation has been received stating that non-residents are required to pay tax only in respect of income received in India or income accruing or arising in 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.

Therefore, CBDT clarified 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. 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.

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?

In case of an affirmative answer, the taxpayer is required to fill up the Schedule FA. In Schedule FA, the taxpayer is required to disclose the details of foreign assets etc. held at any time during the relevant accounting period.

In this regard, CBDT clarified 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.

[Circular No. 21 of 2019]


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