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Mint
2 days ago
- Business
- Mint
ITR Filing: Zero income tax on earnings of ₹20 lakh! Is it legal? Reddit post sparks debate
ITR Filing: With about a month left for filing the income tax return, taxpayers have gotten busy with their ITR preparations. As this ITR filing season gains momentum, a Reddit post that claims tax liability on an income of ₹ 20 lakh can be reduced to zero while filing ITR 4 has sparked a debate. A user, who goes by 'Mayand69', posted a query seeking help in filing ITR for his father, who is an advocate in a civil court. "Just a small query here, any qualified personnel please help. My father is an advocate (independent) in Civil Court. I have a small query while filling his returns. ITR 3: Gross total receipt: INR 20,00,000 and he has close to no professional expense. So his tax liability roughly comes as 3,00,000 under new tax regime. ITR4: Gross Total Receipt: INR 20,00,000 According to 44ADA presumptive scheme he can claim 50% as expense so his profit comes down to INR 10,00,000. Now his tax liability becomes 0 under new tax regime. So, isn't it a loss for the IT Department? Is it legal? I am genuinely seeking help as I have zero knowledge about this. Or am I going wrong somewhere?" Since the taxpayer is an advocate, he is eligible to file ITR 4. It can be filed by anyone who is eligible to declare Profits and Gains from Business or Profession on a presumptive basis under Section 44ADA. The presumptive tax scheme allows professions such as lawyers, doctors, freelancers and so on to pay income tax on just half of their professional income, which reduces their tax liability significantly, which can be zero in select cases. 'Under Section 44ADA, if any specified professional has the gross receipts of ₹ 20 lakh (as per example), they must declare income equal to either 50% of their gross receipts or their actual income, whichever is higher. Those opting for this scheme are not required to maintain detailed books of accounts for expenses if the annual gross receipts are under ₹ 50 lakh,' said Abhishek Soni, CEO, Tax2Win. 'In the given example, if the taxpayer avails the benefit under Section 44ADA, his taxable income will come down to ₹ 10 lakh. That being said, if he opts for the new tax regime, his tax liability won't be zero. As per the new tax regime for FY25, for those who fall in the ₹ 7-10 lakh income bracket, a 10% tax rate is applicable. On the other hand, those who earn ₹ 20 lakh and do not qualify for the Section 44ADA benefit, their taxable income and tax slab would be higher, leading to a greater tax outgo,' Soni explained. It may be noteworthy that the zero income tax on income up to 12 lakh is applicable on returns filed for FY26, not FY25, provided the individual has not booked any capital gains during the year.
News18
5 days ago
- Business
- News18
Explained: How The Latest Tax Bill 2025 Changes House Property Income Rules
Last Updated: Revised Income Tax Bill clarifies 30% deduction post-municipal tax and extends pre-construction interest benefit to let-out homes New Income Tax Bill 2025: Clause 22 of the revised New Income Tax Bill, 2025, has addressed two long-pending ambiguities in the taxation of 'Income from House Property." 1. Standard Deduction Clarification The Bill now explicitly states that the 30% standard deduction will be calculated on the net annual value—that is, after deducting municipal taxes from the annual value determined under Clause 21. In the earlier draft, it was unclear whether the deduction applied before or after municipal tax deduction, raising concerns it could be taken on the gross annual value. The Lok Sabha Select Committee recommended this amendment to preserve fairness and align the new law with existing provisions under Sections 23 and 24 of the Income-tax Act, 1961. Under current law, interest on borrowed capital for acquiring or constructing a property can be claimed as a deduction, including pre-construction interest spread over five equal annual instalments. This benefit applies to both self-occupied and let-out properties. What It Means for Homeowners Tax experts say these clarifications prevent potential disputes and ensure the computation process remains consistent with long-established practice. Experts Take: Chartered Accountant Abhishek Soni, co-founder of Tax2Win, said: 'A let-out house property is one that is rented out or leased to another party. The rental income from such a property is taxable under 'Income from House Property'. Individuals can claim tax deductions on municipal taxes paid, standard deduction (30% of net annual value), and interest on home loans." CA (Dr.) Suresh Surana explained to The Economic Times: Under the current Income-tax Act, 1961, Sections 23 and 24 govern the computation of 'Income from House Property." Section 23 allows municipal taxes actually paid to be deducted from the annual value to arrive at the net annual value, and Section 24(a) allows a standard deduction of 30% on this net value. However, the original draft of the Income-tax Bill, 2025, did not clarify whether the 30% deduction was to be applied before or after municipal taxes, raising concerns it might be calculated on gross annual value. The Select Committee's recommendation now ensures the 30% standard deduction applies to the annual value after municipal taxes—aligning with existing practice. About the Author Aparna Deb Aparna Deb is a Subeditor and writes for the business vertical of She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, More Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Mint
09-08-2025
- Business
- Mint
ITR Filing: 'Trading profit is ₹21,000, but taxable gain ₹1 lakh - How's this Possible?' Reddit post sparks debate
ITR Filing: As taxpayers swing into action to file their income tax returns (ITR) ahead of the 15 September deadline, a Reddit post has sparked debate on how income tax is levied on profit earned from the stock market. During ITR filing, a Reddit user, who goes by 'anoopdreams,' was stunned when his CA revealed that his taxable gain was ₹ 1,03,297.57, while the realised profit was just about ₹ 21,600. Turning to social media, he wrote: "Hey fellow traders, I'm really confused about my taxes and hope someone can shed some light. My PnL for last year shows a total profit of 21K I gave this to my CA for ITR filing, and he told me my taxable profit is 1 Lakh." He says my profits are taxable, but my losses are mostly "intraday" and can only be carried forward. They can't be used to reduce my current profit." Elaborating on his trading style, he mentioned that, " I primarily do swing trading with a GTT stop-loss. Sometimes, a trade I intend to hold for several days hits the stop-loss and gets exited on the same day. I believe this is why they are being classified as intraday trades. Is a trade intended for swing but closed on the same day automatically considered an "Intraday/Speculative" trade for tax purposes? Is it true that these "intraday" losses cannot be set off against my swing trading (STCG) profits? Do I really have to pay tax on ₹ 1 Lakh even though my net PnL was only ₹ 21k? Is there any way to correctly offset these losses to reduce my tax liability?" ITR filing Yes, it is absolutely possible. Under income tax laws, profit/loss from intraday trading and capital gains are taxed differently. Taxpayers cannot set off their intra-day losses against their long-term and short-term capital gains (LTCG and STCG). The profit and loss statement shared by the user (shared above) reveals that his short-term profit was ₹ 1,03,297.57, while his intraday loss stood at ₹ 81,682.80 - making his realised profit about ₹ 21,600. "As per the income tax laws, the individual will have to pay short term capital gains tax on ₹ 1,03,297.57 because intra-day trading losses can be set off only against intra-day trading gains. They cannot be adjusted against STCG or LTCG. Such losses can be carried forward to subsequent years and set off only against future intra-day trading gains," Abhishek Soni, CEO Tax2Win told Mint. "Intraday trading is considered speculative business income. Because of this reason, such profit is taxed under the head "Profit and Gain From Business or Profession," as per the applicable slab rate of the taxpayer," he added.
Economic Times
05-08-2025
- Business
- Economic Times
How to file ITR-2 for AY 2025-26 with salary, capital gains, foreign income and others; Here's a step-by-step guide
ET Online Step-by-step guide on how to file ITR-2 for AY 2025-26 with salary, capital gains, foreign income and others online and with excel utility Taxpayers who earn income from salary, capital gains, or have invested in unlisted equity shares, need to file their Income Tax Return using the ITR-2 form. For the Assessment Year 2025-26 (FY 2024-25), there are six significant updates in the ITR-2 excel utility. Some of these updates relate to reporting of capital losses on share buyback, bifurcation of acquisition and improvement costs for real estate transfers, among others. Check out the information below to learn how to file your ITR-2 online or with the excel utility. Who needs to file ITR-2 for AY 2025-26 (FY 2024-25)? According to chartered accountant Abhishek Soni, co-founder, Tax2Win, here's the list of incomes that require you to file ITR-2: 'Income from salary or pension Income from house property(one or more) Income from other sources, including income from winning a lottery, income from owning and maintaining horse races, or income taxable at special rates. Persons who had investments in unlisted equity shares at any time during the entire financial year. An individual who is a director in a company. An individual who is a Resident(ROR/RNOR)or non-resident. Income earned from capital gains Income from foreign assets/ other foreign income. Agricultural income of more than Rs 5,000/- Incomes where clubbing provisions are applicable Individuals having a financial interest in assets located outside India, which includes any signing authority for accounts held outside India. One who desires to carry forward or bring forward loss under income from house property. Any tax has been deducted under Section 194N In cases where payment or deduction of tax has been deferred on ESOP.' Soni says: 'The total income can exceed Rs 50 lakh in ITR-2 unlike ITR-1.' Also read: ITR filing deadline: What is the last date for filing returns for taxpayers not requiring an audit? How to file ITR-2 using the excel utility? The ITR-2 form includes several schedules and in this article, we will walk you through a step-by-step guide, using capital gains as an example– covering both long and short term Soni's step-by-step guide to filing ITR-2 using the excel utility: Step 1: Download and Open the Excel Utility Visit the Income Tax e-Filing portal Navigate to 'Downloads' > ITR Forms > Select ITR-2 > Download Excel utility Step 2. Install and launch the ITR-2 excel utility Extract the ZIP file you downloaded. Open the utility and click Continue to proceed. Step 3. Filling Schedule 'Part-A General' You must fill in your basic details in this schedule Name, address, PAN, status, Name, Aadhaar, DOB, Mobile & Email Select your Residential status (choose Resident/Non-Resident accordingly) Select your filing type, Original or Revised. Select the ITR filing section, the date of filing the ITR, document identification number (if filed in response to a notice). If you are filing a return under section 139(1), you can choose to switch from the new to the old regime by selecting 'Yes' under 'Do you wish to exercise the option u/s 115BAC(6) of opting out of the new tax regime?' If your income is below the threshold required for mandatory ITR filing, but you are still filing ITR due to fulfilling any of the mandatory conditions listed in the seventh proviso to section 139(1), then select the reason accordingly. If you are a director in the company, fill in the required details like company name, type, PAN, DIN, and whether its shares are listed or unlisted. If you have held any unlisted equity shares in the FY, you must mention their details in the table given at the end. Step 4. Filling the Schedule 'Capital Gains' This tab is for reporting the sale of capital assets like shares, mutual funds, real estate, etc. Short-Term Capital Gains - Sale of Immovable Property Enter the details of the sale of immovable property. Fill in the date of acquisition and the date of sale of the property Full value of consideration, stamp duty value of the property. Enter the deductions like cost of acquisition, cost of improvement, and transfer expenses Enter the short-term capital gains on immovable property and the details of the transfer of immovable property. Sale of Equity Shares and Mutual Funds Enter the full value consideration, cost of acquisition, cost of improvement, and expenses on transfer Fill in the short-term capital gain on equity or equity-oriented mutual fund. Enter the details of any unutilized capital gains deposited in the Capital Gain Account Scheme (CGAS). Long-Term Capital Gains Fill in the details of the long-term capital gains Enter details like date of acquisition, date of sale, full value of consideration, and stamp duty value. Next, enter the cost of acquisition, cost of improvement, and transfer expenses. Fill in the amount of deductions under section 54, 54B, 54F, 54EC, if applicable. Note: While entering your capital gain details, make sure to classify your capital gains before and after 23rd July 2024 and mention accordingly. Enter the details of LTCG on the sale of unlisted bonds and unlisted debentures. Enter the details on the sale of listed securities or zero-coupon bonds. Step 5: Details of Set-off of Current Year Capital LossesEnter the details of the short-term and long-term capital losses set off against the capital gains in the table provided. Step 6: Final Submission Click on "Validate" on each sheet after filling Go to the "Part A – General" tab and click "Calculate Tax" Save the XML and upload the JSON via the Income Tax e-filing portal e-verify the ITR to complete the process How to file ITR-2 online via the e-filing ITR portal? Here's a step-by-step guide on how to file ITR-2 via the online e-filing ITR portal: Step 1: First login on the e-filing ITR portal using your credentials. Once logged in go to the e-file tab and hover over the 'Income Tax Returns' button and then click on 'File Income Tax Return' button. A new webpage will open and it will ask for some details – assessment year, mode of filing (online/offline). Click on 'continue' once done. Step 2: A new webpage will open and here you need to click on a button called 'Start New Filing'. When you click this button a new web page opens which asks you to 'Please select the status applicable to you to proceed further'. Click 'Continue'. In this example we used ITR-2. Step 3: Here's a list of do documents that will help you file the ITR-2 faster: Form 16 Form 16A Form-26AS Bank Statements Housing Loan Interest Certificates Receipts for Donation Made Rental Agreement, Rent Receipts, Investment premium payment receipts - LIC, ULIP Step 4: You must answer why you are filing ITR. Once the reason is selected, then click on 'Continue'. A new webpage opens and here you can check the pre-filed data. Once you have checked all the pre-filled data click on the 'Proceed to Verification' button. Do remember to e-verify your filed ITR within 30 days of filing it. The Income Tax Department said on the e-filing ITR portal: 'Income Tax return (ITR) is pre-filled based on the information available for pre-fill on e-Filing. There may be situations where such information may not be complete. The facility of pre-filling is only for providing assistance to the Taxpayers for filing their ITRs. Please verify the pre-filled data with your records and AIS/TIS before finalising and submitting the ITR. You have the option to make changes to pre-filled data.' ITR-2 Source: ITR e-filing portal N.R. Narayana Murthy Founder, Infosys Watch Now Harsh Mariwala Chairman & Founder, Marico Watch Now Adar Poonawalla CEO, Serum Institute of India Watch Now Ronnie Screwvala Chairperson & Co-founder, upGrad Watch Now Puneet Dalmia Managing Director, Dalmia Bharat group Watch Now Martin Schwenk Former President & CEO, Mercedes-Benz, Thailand Watch Now Nadir Godrej Managing Director, of Godrej Industries Watch Now Manu Jain Former- Global Vice President, Xiaomi Watch Now Nithin Kamath Founder, CEO, Zerodha Watch Now Anil Agarwal Executive Chairman, Vedanta Resources Watch Now Dr. Prathap C. Reddy Founder Chairman, Apollo Hospitals Watch Now Vikram Kirloskar Former Vice Chairman, Toyota Kirloskar Motor Watch Now Kiran Mazumdar Shaw Executive Chairperson, Biocon Limited Watch Now Shashi Kiran Shetty Chairman of Allcargo Logistics, ECU Worldwide and Gati Ltd Watch Now Samir K Modi Managing Director, Modi Enterprises Watch Now R Gopalakrishnan Former Director Tata Sons, Former Vice Chairman, HUL Watch Now Sanjiv Mehta Former Chairman / CEO, Hindustan Unilever Watch Now Dr Ajai Chowdhry Co-Founder, HCL, Chairman EPIC Foundation, Author, Just Aspire Watch Now Shiv Khera Author, Business Consultant, Motivational Speaker Watch Now Nakul Anand Executive Director, ITC Limited Watch Now RS Sodhi Former MD, Amul & President, Indian Dairy Association Watch Now Anil Rai Gupta Managing Director & Chairman, Havells Watch Now Zia Mody Co-Founder & Managing Partner, AZB & Partners Watch Now Arundhati Bhattacharya Chairperson & CEO, Salesforce India Watch Now
Time of India
18-07-2025
- Business
- Time of India
ITR filing FY 2024-25: ITR-2 online filing now live on Income Tax portal; check details
ITR filing: The Income Tax Return (ITR) filing deadline for FY 2024-25, assessment year 2025-26 is September 15, 2025. ITR filing FY 2024-25: The Income Tax Department has opened the online e-filing of ITR-2 on the Income Tax Portal The online submission system for Form ITR-2 was opened on July 18, 2025. This development allows various categories of taxpayers, including those with salaries, taxable capital gains, and cryptocurrency earnings, to submit their income tax returns through the e-filing ITR portal using ITR-2. Last week the Income Tax Department had released Excel Utilities for ITR-2 and ITR-3. The Income Tax Return (ITR) filing deadline for FY 2024-25, assessment year 2025-26 is September 15, 2025. The Income Tax Department announced on X (formerly Twitter): "Kind Attention Taxpayers!Income Tax Return Form of ITR-2 is now enabled for filing through online mode with pre-filled data at the e-filing portal. Visit: Who Should File ITR-2? For Assessment Year 2025-26 (Financial Year 2024-25), ITR-2 filing requirements apply to specific categories of taxpayers. Also Read | ITR filing FY 2024-25: New versus old income tax regime - what helps you save more tax? Check calculations before filing return Abhishek Soni, chartered accountant and co-founder of Tax2Win told ET, ITR-2 is applicable for individuals or HUF (Hindu Undivided Family) receiving income from: * Salary or pension earnings * Revenue from one or multiple house properties * Additional income sources, including lottery winnings, horse racing proceeds, or specially taxed income * Holders of unlisted equity shares during the financial year * Company directors * Individuals classified as Resident (ROR/RNOR) or non-resident * Profits from capital gains transactions * Earnings from overseas assets or foreign sources * Agricultural proceeds exceeding Rs 5,000/- * Income subject to clubbing provisions * Persons with financial interests in foreign assets, including signing authority for overseas accounts * Those seeking to carry forward or bring forward losses from house property * Cases where tax deduction falls under Section 194N The ITR-2 form has undergone several significant modifications for FY 2024-25 (AY 2025-26). by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Is it legal? How to get Internet without paying a subscription? Techno Mag Learn More Undo The Schedule-Capital Gain has been divided so that it can segregate gains that have been made before and after July 23, 2024. For share buybacks that have been done after October 1, 2024, capital losses are now permissible when the corresponding dividend income is declared under income from other sources. Also, the threshold for reporting assets and liabilities has been increased. It requires disclosure only when total income is above Rs 1 crore. The form now requires detailed information for various deductions, including those under sections 80C and 10(13A). Additionally, taxpayers must now specify the TDS section code whilst filling the Schedule-TDS portion. Also Read | Income Tax Return: What is Form 16? Top things taxpayers should check in this document before filing ITR Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
