I labored for a number of years within the USA, the place my employer supplied the 401(ok) account. Now, I’m a resident Indian. However, I nonetheless preserve that account and need to know whether or not I’ve to declare this in my revenue tax returns (ITR)?
—Name withheld on request
Based on the restricted data supplied by you, it’s presumed that you’re an Indian citizen and qualify as Resident and Ordinarily Resident and thus you might be required to reveal the main points (in ITR-2) of all of your overseas belongings.
Foreign Assets (‘FA’) schedule within the ITR kind seeks to include the main points of belongings which a taxpayer holds exterior India. In the absence of any particular tips qua asset, whether or not an asset is to be included or not will have to be evaluated foundation the character and vesting of the asset, wordings and outline within the schedule and the restricted directions/ tips on this regard.
It is assumed that the 401(Okay) account is a private pension account within the US during which each the employer and worker contribute throughout the interval of service. It could be prudent to reveal the main points of the 401(Okay) account within the FA schedule.
With respect to the particular part of the FA schedule below which it ought to be disclosed, it might rely on the precise nature of the 401K account, which can have to be evaluated. In case of the character of account doesn’t fall into any particular class, one might think about reporting it below the residual part D —’Any different Capital asset” (as per the ITR-2 kind relevant for monetary yr 2021-22).
I had invested in an unsecured mounted deposit (FD) scheme of an organization. In 2018, the corporate stopped paying curiosity and didn’t return the principal quantity to depositors. After litigation below the Negotiable Instrument Act, the corporate agreed to pay me the principal with none curiosity for the interval of the unique deposit or the following default interval —all for a complete of about 4 years. Can I declare any profit as ‘long term capital loss’ for the interval during which I misplaced curiosity on my deposit quantity whereas submitting my revenue tax return? The settlement was made throughout the present monetary yr and the repayments are being made in month-to-month installments.
—Name withheld on request
Based on the knowledge supplied by you, it’s assumed that, as no curiosity was paid to you for the default interval, no corresponding revenue was additionally provided to tax by you. In such a case, this will likely solely be construed as non-realization of a possible revenue, which can nonetheless not be thought of as a loss for tax functions, regardless that it could be so in an financial sense. Also, such loss has not arisen from the switch of the mounted deposit, for the reason that principal quantity itself is being absolutely repaid to you. Hence, topic to a evaluate of the underlying deposit scheme and phrases of the negotiated settlement, a capital loss will not be out there on this case.
Parizad Sirwalla is accomplice and head, world mobility providers, tax, KPMG in India.
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