Why record-keeping rules are a hidden burden on individual taxpayers
They need to maintain detailed records of accounts that must be kept for long periods. If your income exceeds ₹50 lakh (raised to ₹1 crore since last year), the tax returns require you to disclose the cost of certain types of assets held by you.Such assets include shares and securities, loans and advances given, bank balances, immovable property, vehicles, jewellery, etc.
This is generally not possible without maintaining detailed records, if not books of account. Often, in assessments, you may be asked for a personal balance sheet, though you are not required to maintain accounts by law.If you are an investor in shares, you need to keep detailed records of the cost and date of purchase of each lot of shares, along with a copy of the contract note, so as to be able to compute your capital gains when you sell the shares, as such gains are computed on the basis of first-in, first-out or FIFO basis.For investors with large portfolios, keeping track of this is quite time-consuming.
Often, such details are provided by portfolio managers or online stock brokers. However, if you have shifted brokers or portfolio managers over the years, extracting such accurate information is a big challenge.The contract notes need to be kept till such time as the shares are sold and assessment of income for that year is completed, unless the shares were acquired prior to a cut-off date (e.g.
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