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Business Standard
4 days ago
- Business
- Business Standard
Influencers to F&O traders: here's what ITR utility update means for you
As India's digital economy evolves and more taxpayers report income from non-traditional sources like content creation and speculative trading, the Income Tax department has overhauled its ITR utility to introduce a revised list of 'Nature of Business/Profession' codes. This change, effective from assessment year (AY) 2025–26, is designed to bring more clarity, compliance and alignment with sector-specific practices. Why did the Income Tax department make this change? The update is a response to the changing economic landscape. 'The revised codes aim to better capture emerging income sources, like social media influencing or F&O trading, while reducing ambiguity in disclosures,' said Parag Jain, chartered accountant & tax head at 1 Finance. The older codes were too generic, leading to inconsistent classification and potential compliance gaps. The change also boosts the department's analytics and cross-platform matching. 'It is a strategic move to enhance digital governance, improve compliance, and match data with GST and MCA systems,' said Deepak Kumar Jain, founder & chief executive officer of Vivek Jalan, Partner at Tax Connect Advisory Services LLP, noted that the classification will also help the department compare profitability within sectors using AI tools, which may affect how returns are scrutinised. What changes for small businesses, freelancers, and professionals? The new codes help taxpayers report income more accurately. For example: A freelance graphic designer must now use code 14010 instead of the generic 0607 A mobile retailer should now choose code 09019 instead of selecting 'Others' F&O traders must now use code 21010, replacing older catch-all financial activity codes YouTubers and influencers have a new code: 16021 'These help align disclosures with actual income and reduce mismatches,' Parag Jain said. Sonu Jain, chief risk officer at 9Point Capital, added that better classification can also ensure eligibility for presumptive schemes under Sections 44AD/44ADA. What if the wrong code is selected? While there's no explicit penalty, the risks are real. 'Wrong codes can trigger AI-based scrutiny, mismatches, or even notices,' Parag Jain noted. 'This is especially critical if the data doesn't match with GST or MSME/Udyam records,' Deepak Kumar Jain added. Jalan pointed out that if declared profits diverge significantly from industry norms, for instance, an influencer showing just 20 per cent profitability where the average is 50 per cent, they may need to furnish expense justifications. What should taxpayers and CAs do now? Experts agree there's no need to revise past filings. 'This is a forward-looking change,' Sonu Jain said. However, accuracy this year is essential. 'Use the latest ITR utility, match codes with GST/MSME records, and verify presumptive scheme eligibility,' Deepak Kumar Jain advised. In short, the ITR utility's new codes aren't just a formality. They are a signal that the tax system is adapting to modern income sources and taxpayers must adapt too.
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Business Standard
15-07-2025
- Business
- Business Standard
Political donations, medical claims:How to avoid I-T scrutiny on deductions
The Income Tax Department has searched 200 places nationwide to clamp down on bogus tax deductions, news agency ANI reported on Monday. The searches were at individuals and intermediaries suspected of inflating claims under key sections of the Income Tax Act, including political donations (Section 80GGC), tuition fees, and medical expenses. ANI quoted unnamed sources as saying that the crackdown follows the detection of fake bills and misuse of exemptions, with several intermediaries allegedly facilitating fraudulent claims. Why are these deductions under scrutiny 'These categories are vulnerable to misuse as they rely heavily on self-declared documents and are relatively easier to inflate or fabricate because they are not verified at the time of filing,' Niyati Shah, chartered accountant & vertical head – personal tax at 1 Finance, told 'Business Standard'. 'Political donation receipts may be issued by lesser-known entities, tuition fee payments might be claimed even for non-eligible institutions, and inflated or unrelated medical bills may be shown under critical illness deductions,' she said. Political donations accounted for over Rs 10,000 crore in tax claims in a single year, with a tenfold surge between FY17 and FY22, said Shaily Gupta, partner at Khaitan & Co. 'More than 650,000 taxpayers are currently under scrutiny for suspicious deductions, including 400-plus tech professionals linked to a Rs 110 crore refund racket,' she said. Political donations are flagged due to concerns about 'tax evasion, money laundering, and misuse of tax exemption provisions,' particularly where contributions seem inconsistent with the donor's income or are made to shell entities, noted Ritika Nayyar, partner at Singhania & Co. Bogus claims 'If claims are found to be bogus, deductions are disallowed, and the taxpayer's income is recomputed,' Shah said. 'Penalties under Section 270A for misreporting income can reach up to 200 per cent of the evaded tax, and in severe cases, prosecution under Section 277 may follow.' Even if taxpayers claim they were misled by intermediaries, 'ignorance is not a defence,' Gupta cautioned. Experts say maintaining records will help if their tax claims are scrutinised: -For political donations, retain digital payment proof and valid receipts from registered parties. -For tuition fees, preserve official receipts from recognised institutions. -For medical expenses, maintain insurance details, hospital bills, and prescriptions. 'Cross-verify that claims align with Form 26AS and AIS, and avoid cash transactions which are ineligible for deductions,' Shah said. Can AI tools like TaxAssist help? While the tax department's AI-driven TaxAssist tool can guide taxpayers and flag anomalies, it is not a substitute for professional advice. 'AI may simplify compliance for basic cases but cannot replace expert judgment in complex or high-value filings,' Nayyar said. Taxpayers are urged to file honest returns and avoid shortcuts that may trigger scrutiny. 'Compliant documentation is the best protection against adverse tax action,' Gupta stressed.
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Business Standard
11-07-2025
- Business
- Business Standard
Offline forms for ITR-2, ITR-3 released: How to use them, documents needed
The Income Tax Department has rolled out Excel-based offline forms ITR-2 and ITR-3 for assessment year (AY) 2025–26 for individuals and Hindu Undivided Families (HUFs) with complex income sources such as capital gains, foreign income, or business and professional earnings. Forms, which are called utilities by the department, for ITR-1 and ITR-4 were released earlier and the latest set was delayed. 'The delay stems from major structural changes to the ITR forms for AY 2025–26. These changes required backend system upgrades, utility reprogramming, and extensive validation,' said Ritika Nayyar, partner at Singhania & Co. Niyati Shah, a chartered accountant and personal tax head at '1 Finance', said 'synchronisation issues' with the Annual Information Statement and Taxpayer Information Summary, as well as efforts to align disclosures with international reporting standards and government circulars delayed the forms. What's new in ITR-2 and ITR-3? Changes in ITR-2 and ITR-3 reflect amendments in the Finance (No. 2) Act, 2024, said Naveen Wadhwa, vice-president at Taxmann. 'The threshold for mandatory reporting of assets and liabilities has been increased from Rs 50 lakh to Rs 1 crore, reducing the compliance burden for many taxpayers,' he said. Capital gains segregation: The new forms require taxpayers to disclose whether an asset transfer triggering capital gains occurred before or after July 23, 2024, as this impacts the applicable tax rates, particularly for property sales. Buyback reporting: Taxpayers can claim capital losses on share buybacks after October 1, 2024, provided related dividend income is reported. Tax deducted at source: A new field requires reporting the specific section under which TDS has been deducted. Expanded disclosures: There are now more granular requirements for deductions (like 80C and 80D), foreign assets, and virtual digital assets. 'These changes simplify filing for some taxpayers but also require more detailed information in certain areas,' Wadhwa added. Who should file ITR-2 and ITR-3? Experts explain ITR-2 is for individuals and HUFs with income from salary, multiple house properties, capital gains, or foreign assets, but not having income from business or profession. ITR-3 is for individuals and HUFs with income from a business or profession, including earnings through presumptive taxation schemes under Section 44AD, 44ADA, and 44AE. Salaried individuals and pensioners should note the expanded requirements. 'The new form asks for a comprehensive breakup of salary components, enabling tax authorities to verify exemption claims more effectively,' Wadhwa said. What is Excel utility? The Excel utility is an offline tool that allows taxpayers to fill in return details without an internet connection. Once complete, it generates a JSON file for upload on the tax department's e-filing portal. How to use the Excel utility -Download ITR-2 or ITR-3 Excel utility from -Enable macros in Excel. -Enter income, deduction, and tax payment details. -Validate the entries using the built-in feature. -Generate JSON file. -Log in to the e-filing portal and upload the .JSON file. Tips for self-filing taxpayers 'Taxpayers filing without professional assistance should gather all documents, Form 16, capital gains statements, and receipts for deductions, before starting,' Wadhwa said. 'Pay attention to distinguishing transactions before and after July 23, 2024, as tax treatments differ. Also, use the raised Rs 1 crore threshold for asset reporting to avoid unnecessary work if eligible.' Deadlines -Last date to file ITR: September 15, 2025 (extended from July 31) for non-audit cases; however, a belated return can be filed by December 31 with penalties and interest. -For businesses that require an audit, the last date of filing is October 31st, 2025. Taxpayers are advised to review the changes carefully to avoid errors and notices.
Time of India
09-07-2025
- Business
- Time of India
52% of cryptos launched since 2021 are dead. What should investors focus on in 2025?
The explosive growth of the cryptocurrency market in recent years has been accompanied by an equally staggering rate of token failures . According to a new research report by 1 Finance, over 3.6 million crypto tokens—or 52% of those launched since 2021—are now considered dead. Alarmingly, nearly half of these failures occurred in 2025 alone, reflecting the high-risk nature of the digital asset space. Despite over 5,300 tokens launching daily, many of these projects lack utility or sustainability, with meme coins and scam tokens accounting for more than $500 million in investor losses in 2024, the report said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Encontre voos low-cost Voos | Anúncios de Pesquisa Saiba Mais Undo The early crypto bull runs of 2016–2017 and 2020–2022 were largely driven by retail investors chasing quick gains in altcoins. But the market dynamic has shifted. Since 2024, governments and institutional players have increasingly entered the crypto space. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0.00% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Crypto Tracker TOP COIN SETS DeFi Tracker 1.82% Buy Crypto Blue Chip - 5 0.86% Buy Web3 Tracker -1.68% Buy NFT & Metaverse Tracker -2.42% Buy AI Tracker -3.85% Buy TOP COINS (₹) Ethereum 225,538 ( 3.09% ) Buy XRP 200 ( 2.99% ) Buy Solana 13,105 ( 2.49% ) Buy BNB 56,996 ( 0.79% ) Buy Bitcoin 9,334,350 ( 0.63% ) Buy From the U.S., China, and Bhutan holding Bitcoin in sovereign reserves to BlackRock's $80 billion deployment through Bitcoin and Ethereum ETFs, institutional adoption is gaining momentum. Meanwhile, India has ranked No. 1 in global crypto adoption twice in the last three years, even as high taxation continues to challenge retail participation. Did you Know? The world of cryptocurrencies is very dynamic. Prices can go up or down in a matter of seconds. Thus, having reliable answers to such questions is crucial for investors. View Details » The 1 Finance report suggests the crypto ecosystem is evolving into a more mature financial market. With increased adoption comes greater demand for credibility, accountability, and research-backed decisions. Live Events 'While crypto markets may seem overwhelming with the daily influx of new coins, it is gradually maturing,' said Purvang Mashru, Senior Quantitative Research Analyst at 1 Finance. 'The crypto market cap has surpassed $3 trillion, and Bitcoin is now valued more than companies like Google and Meta. But volatility remains a key risk. A clear focus on education and fundamental analysis will help investors make better decisions.' Mashru added that investors should apply the same rigour to crypto as they would to traditional assets—evaluating value, utility, and fit within a broader wealth strategy. What should investors watch in 2025? With token launches continuing at breakneck speed, separating high-potential projects from short-lived hype is increasingly important. The report stresses that serious investors are now turning to on-chain metrics—such as wallet activity, protocol revenue, developer contributions, and governance transparency—to assess a project's underlying strength. 'Just like stock investors examine cash flows and profitability, crypto investors must understand what they're investing in and why it holds value,' the report said. While hype-driven tokens will continue to capture headlines, the long-term winners are more likely to be those backed by strong fundamentals, real-world use cases, and institutional validation, 1 Finance noted. 'A bigger trend is emerging. As governments and institutions increase their exposure, crypto is steadily becoming mainstream,' the report concluded. 'This highlights the importance of moving beyond short-term market noise and focusing on credible, research-backed projects. A thorough and informed approach will be key to capturing meaningful opportunities in the evolving digital asset space.' ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Economic Times
09-07-2025
- Business
- Economic Times
52% of cryptos launched since 2021 are dead. What should investors focus on in 2025?
The explosive growth of the cryptocurrency market in recent years has been accompanied by an equally staggering rate of token failures. According to a new research report by 1 Finance, over 3.6 million crypto tokens—or 52% of those launched since 2021—are now considered dead. Alarmingly, nearly half of these failures occurred in 2025 alone, reflecting the high-risk nature of the digital asset space. ADVERTISEMENT Despite over 5,300 tokens launching daily, many of these projects lack utility or sustainability, with meme coins and scam tokens accounting for more than $500 million in investor losses in 2024, the report said. The early crypto bull runs of 2016–2017 and 2020–2022 were largely driven by retail investors chasing quick gains in altcoins. But the market dynamic has shifted. Since 2024, governments and institutional players have increasingly entered the crypto space. From the U.S., China, and Bhutan holding Bitcoin in sovereign reserves to BlackRock's $80 billion deployment through Bitcoin and Ethereum ETFs, institutional adoption is gaining momentum. Meanwhile, India has ranked No. 1 in global crypto adoption twice in the last three years, even as high taxation continues to challenge retail 1 Finance report suggests the crypto ecosystem is evolving into a more mature financial market. With increased adoption comes greater demand for credibility, accountability, and research-backed decisions.'While crypto markets may seem overwhelming with the daily influx of new coins, it is gradually maturing,' said Purvang Mashru, Senior Quantitative Research Analyst at 1 Finance. 'The crypto market cap has surpassed $3 trillion, and Bitcoin is now valued more than companies like Google and Meta. But volatility remains a key risk. A clear focus on education and fundamental analysis will help investors make better decisions.' ADVERTISEMENT Mashru added that investors should apply the same rigour to crypto as they would to traditional assets—evaluating value, utility, and fit within a broader wealth strategy. ADVERTISEMENT With token launches continuing at breakneck speed, separating high-potential projects from short-lived hype is increasingly important. The report stresses that serious investors are now turning to on-chain metrics—such as wallet activity, protocol revenue, developer contributions, and governance transparency—to assess a project's underlying strength.'Just like stock investors examine cash flows and profitability, crypto investors must understand what they're investing in and why it holds value,' the report said. ADVERTISEMENT While hype-driven tokens will continue to capture headlines, the long-term winners are more likely to be those backed by strong fundamentals, real-world use cases, and institutional validation, 1 Finance noted.'A bigger trend is emerging. As governments and institutions increase their exposure, crypto is steadily becoming mainstream,' the report concluded. 'This highlights the importance of moving beyond short-term market noise and focusing on credible, research-backed projects. A thorough and informed approach will be key to capturing meaningful opportunities in the evolving digital asset space.' (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
