Identity, Asset Proof and Liability Proof: The Three Piles
Three piles, sorted before anything is read: who the applicant is, what is held, what is owed. A chartered accountant works through them in that order, because each pile answers a different question, and a gap in one pile is never covered by thickness in another.
The documents required for a net worth certificate are simply the evidence for those three propositions. Nothing in a file that serves none of them earns its place, and a thick file is not a complete one. Which paper carries which claim is a separate question, and what turns a claim into evidence governs it rather than this guide.
The certificate speaks to one date, so every balance, holding and loan figure in the file has to speak to that date too. A statement covering a period that stops two months short of it proves the wrong thing, however complete it looks. Fix the date first, then ask each issuer for the paper that covers it.
KYC Papers Every CA Asks For First
Identity documents come first, and the list behind them is not arbitrary. The Prevention of Money-laundering (Maintenance of Records) Rules 2005 define what counts as an officially valid document, and banks and professionals work from that same definition. A permanent account number is asked for in every case, because the schedule is organised around it and the tax record is reached through it.
Officially valid documents under the 2005 rules
- Passport
- Driving licence
- Proof of possession of an Aadhaar number
- Voter identity card
- NREGA job card
- National Population Register letter
One of these, with PAN, settles the identity pile for an individual. Send the one whose name and address are current; an expired or superseded document starts a query, not a file.
When a business is in the schedule
Its own identity papers travel alongside the individual's: the certificate of incorporation for a company, the partnership deed or the LLP agreement for a firm, and the goods and services tax registration where one exists. The name on the certificate is taken from these, letter for letter.
The name test, before anything else
- Same spelling everywhere. The schedule, the deed, the bank statement and the loan account should carry one name. The recipient matches it letter for letter against its own file, and a mismatch is what generates queries.
- A changed name needs its paper. The same rules accept a document despite a later change of name, provided a marriage certificate or a gazette notification supports the change.
- Send that paper with the file. Producing it at the outset is faster than answering a query about it three weeks later.
Property Papers: Sale Deed, Encumbrance Certificate and Tax Receipts
Property is the largest number in most schedules and the one examined hardest. Three different questions get asked about it, and no single paper answers more than one of them.
Is it yours? The sale deed and the chain behind it
- Answers
- The registered sale deed establishes the current transfer. The deeds behind it establish that the seller had something to sell; a chain covering the preceding decades is what a lender's panel advocate looks for, and a gap in it raises a title question rather than a valuation one.
- Does not prove
- That nothing has been registered against the property since. That is the next paper's job.
- Send
- The registered deed in your name, the prior deeds you hold, and for an inherited property the paper by which it came to you.
What is registered against it? The encumbrance certificate
- Answers
- What else has been registered against this property for the period searched. The certificate comes from the sub-registrar's office and lists each registered entry in that period.
- Does not prove
- Title. A record of registered charges is not a title document, and a nil certificate means only that nothing was registered, which is not the same as nothing having happened.
- Send
- A certificate for a period that runs up to the date the certificate speaks to, so the search and the figure match.
Do you hold it? Tax receipts, bills and the society's papers
- Answers
- Ownership and occupation together. A municipal tax receipt in your name for the current year corroborates both, and an electricity or water bill does similar work at lower weight.
- Does not prove
- A share. Occupying a property and paying its bills proves neither title nor the size of your interest in it; the deed does that.
- Send
- The latest tax receipt and one utility bill. For a flat, the society's share certificate and its no-dues letter, since a maintenance arrear behaves as a charge in practice even where nothing is registered.
Allotment letters and the builder's demand notes carry an under-construction property, together with the receipts for what has been paid. The property enters the schedule at the amount actually paid rather than at the agreement value, and the file should make that basis visible.
Bank, Deposit and Investment Statements Worth Attaching
Bank statements are requested so routinely that the wrong ones get sent. What settles a balance is a statement or a certificate covering the reported date itself, not simply the most recent month available in the app. Each holding in this pile has an issuer of its own, and the fastest way through it is to go issuer by issuer.
- Account statements that cover the reported date, for every account that was open during the period. If an account was closed, the closure letter belongs in the file too: a reader who meets that account in an earlier statement will ask what became of it.
- A balance confirmation for the date itself, where the statement cycle does not land on it.
- Fixed deposit advices showing principal, rate and maturity; interest accrued to the reported date is computed from them. A recurring deposit enters at what has been paid in with interest accrued, never at maturity value.
Check: the statement covers the date, and then as many months before it as whoever asked for the certificate specifies. A single-day balance without the months behind it evidences the balance and nothing about the pattern that produced it.
- A consolidated account statement from the depository or the registrar, dated as close to the reported date as possible. It lists each holding with its quantity; the value is applied from the exchange or the fund house price on the stated date.
- Contract notes for anything bought or sold during the period, so a holding that appears or disappears between two statements is explained.
- Bonds and insurance with a surrender value need the issuer's own statement or a surrender-value letter; a policy schedule shows cover, not value.
Check: the statement names you as the holder and carries the depository or registrar reference. A screenshot of an app shows a balance and proves nothing about who holds it.
- Employee provident fund balances come from the member passbook.
- Public provident fund balances come from the account statement, the scheme now running under the Public Provident Fund Scheme 2019, notified on 12 December 2019, which replaced the 1968 scheme.
- Post office deposits come with a passbook or the office's balance certificate for the date.
Check: the balance shown is the balance as at the date, not the last annual credit. Ask for a statement to the date where the passbook stops short of it.
- National savings certificates, Kisan Vikas Patras and post office time deposits are the holdings most often forgotten, because nothing reminds you of them. The certificate itself, with the issue date and the amount, is the paper.
- A sweep for anything overlooked: interest paid and tax deducted show up in the annual tax record against the payer's name, which is why the department's record of tax credits is worth reading before the schedule is closed.
Check: every payer that appears in the tax record has a holding in the file to match it. A payer with no holding is either a closed account that needs its closure letter or an instrument still in the drawer.
Proving Gold, Vehicles and Other Physical Assets
Physical assets are where documentation thins out fastest. Gold accumulated across thirty years rarely has invoices covering all of it, and a vehicle's invoice says nothing about what it is worth now. The useful question for each item is which half of the proof a paper settles: that the thing exists and is yours, or what it is worth on the date.
Proves it exists and is yours
- Invoices, for pieces bought with a bill.
- Hallmark records, for recent pieces.
- Locker rental receipts and photographs: they support existence and say nothing about value.
- The registration certificate of a vehicle, which names the person it is registered to.
Proves what it is worth on the date
- A jeweller's valuation as at the reported date, stating weight and purity, for gold without invoices.
- An insurance schedule listing the items covered and the sum each is insured for.
- A dealer quotation or the insurer's declared value for a vehicle, since a used vehicle enters at a written-down or realisable figure and the invoice price tells the reader nothing useful.
The registration certificate names the person the vehicle is registered to and carries any hypothecation endorsement, and that endorsement stays on the certificate until the financier's no-objection has reached the registering authority and the entry is cancelled. A vehicle shown as unencumbered while the certificate still carries the endorsement produces an immediate query, and the fix is administrative rather than difficult: the lender's statement goes in the liability pile and the certificate stays as it is until the entry is cancelled.
These are handled openly rather than dropped. Machinery bought without an invoice, an inherited holding never mutated into your name, and household articles of real value are stated on your written representation, and the schedule records openly that this is the basis. A reader can then decide what to do with the line, which is a better outcome than discovering it during a review.
Loan and Liability Documents That Reduce Your Number
Liability papers reduce the figure, which is why they tend to be sent last and incompletely. The first thing to get right is which paper proves a loan at all.
- Term loans: home, vehicle, personal, educationThe lender's statement or balance confirmation for the date, one per loan. A joint loan is carried at your share, so the confirmation should show the names on the account.
- Revolving facilities: cards, overdraft, gold loan, loan against securitiesStatements rather than letters, because these move daily. A card outstanding, an overdraft utilised, a gold loan and a loan against securities all change between the request and the reply, so the paper has to be dated.
- The credit information report: the sweepIt catches what has genuinely been forgotten, since every regulated lender reports its facilities to those companies. Individuals are entitled to one free full credit report each calendar year from each credit information company, a facility the Reserve Bank required from 1 January 2017. Read it before the schedule closes, not after a query arrives.
- Borrowings from relativesNo third-party record exists for a loan from a parent or a sibling, so it goes on your own written representation. Listing it is the honest treatment; leaving it out because there is no statement is how a figure gets overstated.
- Guarantees you have givenDocumented even though they reduce nothing. The guarantee deed, or the sanction letter of the borrowing it supports, evidences an exposure that is disclosed below the total rather than deducted from it.
- Charges on property, and their releaseA charge registered against a property in favour of a lender should reconcile to the loan papers in this pile. Wherever that borrowing has been repaid, the satisfaction of charge should be on record, or the encumbrance certificate will still show the lender.
Run Your File Through the Document Checklist Before You Send It
A file that looks complete on the sender's desk is often not complete on the reader's, and the routine omissions are usually the same three. Each of them generates a return trip, and each is avoidable inside an hour.
The most recent month in the app, not the month the certificate speaks to.
Fix: ask the issuer for the statement or confirmation that covers the date (the issuer list).
Gold at a remembered figure, a plot "meant for you", a loan to a friend on trust.
Fix: a valuation, a deed or a signed acknowledgement, or state it openly on your representation (physical assets).
What was lent, when the schedule needs what is still owed.
Fix: a balance confirmation for the exact date from each lender (the liability pile).
Running the file against an itemised list built for this purpose before sending catches those three and the smaller ones. The list asks what the certificate is for, who it is about and what you own and owe, and builds the papers to gather in the order you will be asked for them; this guide is the reason behind each line of it.
Everything assembled here supports a single output. Once the file is whole, the figure is built from it, and a chartered accountant's attested position is issued against that evidence. The working behind the figure is the step that sits between the two, and it is far quicker on a file with no gaps in it.
Once the file is ready
Send us the three piles and the name of whoever asked for the certificate, and a CA tells you which papers are missing and which will not hold before any work starts.
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