Filing · Section 116 · Tax Year 2026-2027
Wealth Statement Reconciliation Calculator
Your wealth has to add up. Increase in net assets, against everything that came in and went out — with the unexplained difference isolated instead of buried.
Step by step
How the reconciliation works
Measure the change
Closing net assets less opening net assets. That is what has to be explained.
Add everything that came in
Taxable income, receipts already taxed at source, exempt income, remittances, gifts and inheritance.
Take out everything that went
Living costs, tax paid, gifts given, losses.
Look at what is left
Nothing left over means it balances. A gap means an inflow is missing — usually final-tax receipts — or the expense figure is not real.
Commonly missed
What usually causes the gap
Final-tax receipts left out
Bank profit, dividends and prize money funded assets without ever entering taxable income.
Expenses guessed too low
A believable household cost makes the statement credible; an implausible one does the opposite.
Assets restated at market value
Wealth statements run at cost. Revaluing a plot upward invents an inflow that never happened.
Loans recorded on one side only
A loan taken adds cash and a liability. Record both, or the statement drifts every year.
Reading the result
An unexplained difference is the point of the exercise
The reconciliation exists to demonstrate that the growth in your net assets is explained by income you declared and inflows you can evidence. A gap means the statement says your wealth grew by more than your declared sources account for.
That gap is what draws attention, and it is examined under provisions dealing with unexplained income. Closing it before filing is far easier than explaining it afterwards.
Understated personal expenses are the usual culprit
Most gaps are not concealed income. They are household expenses recorded at an implausibly low figure — because people genuinely do not know what they spend. An unrealistically low expense figure makes the arithmetic worse, not better: it implies more of your income should still be sitting in assets than actually is.
A realistic expense number usually closes more of the gap than any other single correction.
Assets at cost, not at today's value
A plot that appreciated has not given you income. Restating it at market value inflates your asset growth and creates a difference nothing can explain. Carry assets at cost consistently from year to year, and the reconciliation behaves.
Where this stops
This does the arithmetic on figures you supply. It cannot tell you whether an inflow is evidenced well enough to stand — and for remittances and gifts, that evidence is the whole question.
FAQs
Wealth statement FAQs
What is a wealth statement reconciliation?
A proof that your wealth adds up. The increase in your net assets between the start and end of the year has to be explained by what came in less what went out — income declared, income already taxed at source, exempt receipts, remittances, gifts and inheritance in; living costs, taxes and gifts given out. If the two sides do not meet, the difference is unexplained, and unexplained wealth is what draws a notice.
Who has to file one?
Resident individuals filing a return are generally required to file a wealth statement with it, along with the reconciliation. It is not an optional annexure, and a return filed without a reconciling statement is an obvious loose end.
Why is my statement always short?
Nine times out of ten because income taxed at source has been left out of the inflows. Bank profit, dividends, prize money, gains that were taxed finally at source and business receipts under a final regime all funded your assets, but none of them appear in "taxable income". They are separate inflows and they belong in the reconciliation — which is why they have their own field above.
What counts as personal expenses?
Everything you actually spent living: household running costs, rent, utilities, education, medical, travel, vehicle running, functions and donations. Understating this is a false economy — a household that appears to live on nothing while accumulating assets invites exactly the scrutiny the statement is meant to avoid.
Do I include an asset that went up in value?
Not as an inflow. A revaluation is not a receipt. Assets in a wealth statement are generally stated at cost, so a plot bought for one figure stays at that figure until you sell it — at which point the gain is a real receipt and belongs in the reconciliation.
How do I treat a foreign remittance?
As an inflow, with the banking-channel evidence retained. A remittance is not income and is not taxed as income, but it did fund your wealth and it has to appear here or your statement will not balance. The source-protection question is separate and has its own calculator.
What about a loan I took or gave?
A loan taken increases both your cash and your liabilities, so it nets out of your net assets and does not need explaining as income. A loan given reduces cash and creates a receivable, which likewise nets out. What matters is that both sides are actually recorded — a receivable that never existed in last year's statement is the sort of thing that gets noticed.
The difference is small. Does it matter?
A modest rounding gap from imprecise expense estimates is ordinary. A structural gap is not, and the risk is not the size of the number but the question it prompts. Find what is missing — it is usually an inflow you forgot rather than wealth you cannot explain.
Related tools
Explaining a foreign remittance?
A remittance is not income — but the source-protection conditions matter.
Open Foreign Remittance Checker