Crypto to unlisted shares: 8 tax returns slip-ups that may cost you
New Delhi, Sep 2, 2025
Failing to give tax department information about various assets could lead to penalties of up to Rs 10 lakh
People who give incomplete information in their Income Tax returns (ITR) risk being penalised or even imprisoned, say tax professionals, urging careful scrutiny.
Sujit Bangar, founder of TaxBuddy and a former Indian Revenue Service officer, recently wrote about eight areas where taxpayers often slip up. Missing even one can make a return “defective” under the law, he said on X.
Tax authorities receive information from banks, brokers and even foreign institutions, enabling them to spot errors in ITR. “For non-disclosure of foreign assets, the penalty itself can touch Rs 10 lakh, with jail terms running up to seven years,” Bangar said.
Eight disclosures taxpayers must make
Foreign assets (Schedule FA): Indians residing in the country must report overseas bank accounts, securities, insurance, employee stock ownership plans, immovable property, and even signatory rights. Relief exists if the value of non-property assets is below Rs 20 lakh.
Foreign income (Schedule FSI): Income earned abroad has to be declared country-wise, along with the nature of income, amount received, and tax already paid.
Virtual digital assets: All cryptocurrency or NFT transactions must be reported with purchase date, sale date, cost, and sale value. Importantly, losses here cannot be set off against gains.
Unlisted equity shares: Anyone holding unlisted company shares during the year must disclose details such as quantity, face value, cost, and transaction dates.
Directorships: Taxpayers serving as company directors must declare their Director Identification Number, company PAN, and whether the company is listed or unlisted.
Assets and Liabilities (Schedule AL): Taxpayers with income above Rs 1 crore must furnish a balance sheet of sorts, covering property, jewellery, vehicles, mutual funds, cash, loans, and liabilities.
Partnerships (Schedule IF): Partners filing ITR-3 must disclose firm details, name, PAN, shareholding ratio, and remuneration. These figures must tally with the firm’s own filings.
Banking and verification: Refund accounts need to be pre-validated with correct IFSC codes. Returns also require e-verification within 30 days, failing which they are treated as not filed.
Tax experts stress that omitting information in ITR is no longer easy to hide and can result in defective returns under Section 139(9). The biggest risk lies in foreign assets, which carry the harshest penalties. For taxpayers, the safest bet is to double-check disclosures before hitting ‘submit’.
[The Business Standard]
