Latest news with #ITR2
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Business Standard
06-05-2025
- Business
- Business Standard
ITR-2 updates: Who benefits and who needs to be careful
The Income Tax Department announced the revised ITR 2 form for AY 2025 26 this week, reflecting a push for more detailed disclosures and tighter compliance. Here, through insights from tax experts, we explain what ordinary taxpayers need to know and how to navigate the changes. Date based capital gains reporting 'The new form separates capital gains before and after July 23, 2024,' explains Dr. Simarjeet Singh, assistant professor of Finance at Great Lakes Institute of added "post date sales can opt for a flat 12.5 per cent tax rate without indexation, versus the earlier 20 per cent with indexation." • Two sets of calculations are now required. • Precise record keeping of sale dates is crucial to avoid filing errors. Claiming share buyback losses 'Retail investors finally have clarity on buyback losses,' says Amit Bansal, partner at Singhania & Co. He added "from October 1, 2024, capital losses on share buybacks can be claimed only if corresponding dividend income is reported under Schedule OS." • Cross reference losses and dividends carefully. • Omission can lead to disallowed claims and notices. Higher asset disclosure threshold The reporting bar under Schedule AL has jumped from ~50 lakh to ~1 crore. 'This is a relief for upper middle income taxpayers,' notes Dr. Kirti Sharma, associate professor at Great Lakes. "Filers earning up to ~1 crore need not list every asset and liability in detail, freeing them from cumbersome schedules." Detailed deductions and TDS codes · TDS section reporting: Taxpayers must now state the exact section code (e.g., 192 for salary, 194I for rent) rather than just the deductor name and amount. · Chapter VI 'A breakdown: Deductions under sections like 80C must specify sub categories (PF, LIC, tuition fees), while 80G donations require the ARN. 'These moves signal a shift to verification readiness,' warns SR Patnaik, head of taxation at Cyril Amarchand Mangaldas. 'The department's data 'matching will flag inconsistencies.' Expanded foreign and digital asset reporting · Schedule FA/FSI: Overseas investments now need more granular details, including Legal Entity Identifiers for high value transactions. · Virtual digital assets: Trades remain taxed at 30 per cent under section 115BBH, with no set??'off for losses—making exact reporting non 'negotiable. Tips for smooth self filing Here are detailed, step-by-step tips by Dr. Kirti Sharma. 1. Start Well Ahead: Spread the process over days to reduce fatigue??'induced mistakes. 2. Gather your documents: Form 16/16A, AIS/Form 26AS, bank statements, capital gains statements and donation ARNs. 3. Use pre??'fill utilities: The income??'tax portal's JSON uploader now accommodates most new disclosures. 4. Compare tax regimes: Run numbers under both old and new regimes before choosing to opt out of Section 115BAC. SR Patnaik supported the broader idea of being well-prepared and vigilant during self-filing. In sum, the revamped ITR '2 strikes a balance. It lightens the load for many salaried and retired taxpayers by raising thresholds, yet demands greater diligence from those with capital gains, foreign holdings or digital assets. 'For straightforward incomes, it remains navigable,' Singh concludes, 'but complexity now truly warrants professional advice for anyone with multiple income streams.'
Time of India
05-05-2025
- Business
- Time of India
New ITR-2 form notified for income tax return filing AY 2025-26: What's new for taxpayers? Check top points
notified: The (CBDT) has notified the updated ITR-2 Form for AY 2025-26, which includes key changes such as separate reporting of , allowance of capital loss on share buybacks from October 1, 2024, and a raised threshold for reporting assets and liabilities to Rs 1 crore. Tired of too many ads? go ad free now The revised form also mandates reporting of section codes and enhanced disclosures for deductions like 80C and 10(13A). ITR-2 Form FY 2024-25: Top points Capital gains must now be reported separately for transactions before and after July 23, 2024, following changes in the Finance Act, 2024. Capital loss on share buybacks will be allowed if corresponding dividend income is disclosed as 'Income from Other Sources,' effective from October 1, 2024. The threshold for reporting assets and liabilities has been raised from Rs 50 lakh to Rs 1 crore of total income. Reporting requirements for deductions under sections like 80C and 10(13A) have been expanded. A new column has been introduced under Schedule-TDS to specify the section under which TDS was deducted (e.g., 194I, 194J). What does the new ITR-2 mean for taxpayers? Tax experts have expressed mixed opinions on the new ITR-2 form, noting both the simplifications and the added complexity. CA Ashish Niraj, Partner at A S N & Company Chartered Accountants, welcomed the relief for non-business taxpayers from burdensome disclosure requirements: 'If we see till last year, Schedule AL, which was for assets and liabilities, was applicable if total income exceeded Rs 50 lakhs. But now, it's applicable if total income exceeds Rs 1 crore. Preparing details of assets and liabilities as of March 31st every year is a tedious task for non-business entities for which 2 is applicable. By increasing the limit to Rs 1 crore, taxpayers in the bracket of Rs 50 lakh to Rs 1 crore will get relief from preparing the details,' he told TOI. Niraj added that the requirement aims to resolve some of the earlier inefficiencies: 'Earlier, while entering TDS details in ITR 2, it was not required to mention the section under which TDS was deducted, such as Section 194I, 194J, etc. Now, a separate column is provided for the section. Sometimes, when TDS returns were not filed in time by the deductor or were filed with incorrect particulars, taxpayers used to enter TDS details such as TAN, Name, and amount manually. As there was no 'section' column, the tax department faced issues in processing and cross-verifying. Now, this new column will bring clarity in reporting.' The changes to capital gains reporting also reflect recent shifts in tax policy: 'Before July 23, 2024, the Long-Term Capital Gain rate was 20% with indexation. Tired of too many ads? go ad free now After July 23, 2024, a new rate of 12.5% without indexation was introduced. In the newly notified ITR 2, separate columns are added to report transactions before and after July 23, 2024, separately.' Niraj also pointed out the government's tightening of compliance around disability-related deductions: 'In recent years, the department has caught many fake claims for claiming refund or reducing tax liability under Section 80U, 80DD etc for disability. Now, disability certificate details etc. are required.' CA Gopal Bohra, Partner – Direct Tax at N. A. Shah Associates LLP, explained the updates regarding capital gains taxation: 'Considering the two tax rates applicable on capital gains for the FY 2024-25 (i.e. gains accrued up to July 22, 2024, and gains accrued on or after July 23, 2024), CBDT has introduced a split in Schedule Capital Gains to report separately the capital gains where transfer was before July 23, 2024, and where transfer was on or after July 23, 2024. Similarly, separate computation mechanisms are provided in ITR in relation to capital gains from transfer of land or building by resident individuals where such land or building was acquired prior to July 23, 2024. These changes in ITR will help the individual taxpayer to compute the correct tax liability on capital gains while filing the ITR.' Bohra also explained the impact of the Finance Act (No. 2) of 2024, which will affect share buybacks: 'As amended by Finance Act (No. 2) 2024 with effect from October 1, 2024, the buyback receipt will be taxed in the hands of the recipient as dividend under the head 'Income from Other Sources,' and the cost of such shares will be allowed as capital loss under the head 'Capital Gains.' Accordingly, in ITR-2, separate line items are added under Schedule 'Capital Gains' and Schedule 'OS' to disclose capital loss on buyback of shares on or after October 1, 2024, and receipt from such buyback taxable as dividend under section 2(22)(f) of the Act,' he told TOI. Sonam Chandwani, Managing Partner at S Legal & Associates, termed the new form a mixed experience for taxpayers. 'The ITR-2 form for AY 2025-26, feels like a mixed bag compared to last year's version. The new split in Schedule Capital Gains for pre- and post-July 23, 2024, gains is a smart move to align with the Finance Act's tax tweaks, but it's a headache for taxpayers juggling multiple transactions. Allowing capital losses from share buybacks after October 1, 2024, is a win for investors, though tying it to dividend income reporting feels like a bureaucratic trap waiting to trip people up. Bumping the asset and liability reporting threshold to Rs 1 crore is a relief for middle-income filers, sparing them tedious paperwork, but the beefed-up deduction reporting for 80C and 10(13A), plus mandatory TDS section codes, screams overreach. Honestly, while the form tries to balance clarity and compliance, it's tilting toward complexity, likely forcing salaried folks and HNIs to lean harder on CAs to avoid errors.'
Time of India
05-05-2025
- Business
- Time of India
ITR-2 for FY2023-2024 notified by Income Tax dept: There's good news for Rs 50 lakh to Rs 1 crore income-earners, know other changes and more
The Central Board of Direct Taxes ( CBDT ) notified the Income Tax Return form-2, or ITR-2 , for FY2023-2024 on May 5, 2025. ITR 2 is relevant for the majority of taxpayers, especially salaried employees and pensioners. The form will be effective retrospectively from April 1, 2025, i.e., since the beginning of the current financial year. #Pahalgam Terrorist Attack Inside Operation Tupac: Pakistan's secret project to burn Kashmir Who is Asim Munir, the Zia-style general shaping Pakistan's faith-driven military revival 'Looking for partners, not preachers': India's strong message for EU amid LoC tensions Notably, individuals who have salary or pension income or earn income from more than one house property are eligible to file their income tax return using ITR-2. Importantly, any income from capital gains or losses on the sale of property or other investments, either long-term or short-term, is to be reported in this ITR. ITR 2 is used by salaried taxpayers who are also investors in equity shares and mutual funds. Salaried persons are required to use ITR 2 instead of ITR 1, if he/she owns more than one house property, if any asset is located outside India, if their total income exceeds Rs 50 lakh, etc. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 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. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Switch to UnionBank Rewards Card UnionBank Credit Card Apply Now Undo What changes have been introduced in ITR-2 form this time? According to CA Ashish Niraj, Partner, ASN & Company Chartered Accountants, many changes have been introduced in the recently notified ITR-2. 'Earlier, Schedule AL regarding assets and liabilities had to be provided in case the total income of the assessee exceeded Rs 50 Lakh. However, in the new ITR-2, it is only applicable if the total income exceeds Rs. 1 crore. This will give relief to those having annual income between 50 lakh and 1 crore, as they will not have to prepare a schedule of assets and liabilities.' Live Events The Income Tax department also notified the changes made in ITR-2 via an X-post. — IncomeTaxIndia (@IncomeTaxIndia) The newly notified ITR also incorporates mandatory quoting of the section under which TDS has been deducted for a particular transaction. Previously, ' only details of the entity deducting the TDS and the consequent amount were required to be reported. However, that has changed with this ITR-2. Now, it will be mandatory to report under which section the TDS is deducted, like 194C, 194J', continues Niraj. Also, two major changes have been made under the capital gains (CG) schedule in the recently notified ITR-2. Notably, details of capital gains transactions that were undertaken during the year are filled in Schedule CG, which is present in Part A of ITR-2 form. 'Now, assesses would be required to specify whether the transfer of assets, which led to long/short-term capital gains/losses, took place before July 23, 2024, or after July 23, 2024. Notes Mihir Tanna, SK Patodia and Associates LLP, 'While filing ITR-2, it's important to check whether the asset was transferred before or after 23rd July 2024, as this will impact the tax rate and accordingly, changes have also been made in ITR 2.' 'Also, taxpayers will now be expected to provide some additional details related to deductions like Sec 80c, Sec 80d, Sec 80ccd, etc. As and when the utility to file ITR will be available, we will come to know about the exact details asked in the drop-down related to the above-mentioned section,' says Tanna. Niraj also highlights that if now, respective dividend income u/s 2(22)(f) is offered to tax under the head of income from other sources, then capital loss on buyback of shares on or after 01st October 2024 can be claimed. This is a significant departure from the previous ITR-2, since earlier capital loss on buy-back of shares was not allowed to be adjusted in ITR-2. What documents will be required to file ITR-2? According to the official website of the Income Tax Department, a taxpayer will require the following documents to be able to successfully file ITR-2 Form-16, in case of salary income Form-16a issued by TDS deductors. If you have earned interest on fixed deposits and TDS has been deducted on the same, you need TDS certificates Form 26AS to verify TDS on salary as well as TDS other than on salary. Form 26AS can be downloaded from the e-Filing portal. If you are living in rented premises, you need rent-paid receipts for the calculation of HRA (in case you have opted for the old tax regime and have not submitted the same to your employer) In case you have any capital gains transactions in shares, you will need a summary or profit / loss statement of capital gain transactions of shares or securities during a year, if any, for computation of capital gain. Bank passbook, Fixed Deposit Receipts (FDRs) to calculate the amount of interest income If you have received rent from your rented house property, then you will need your tenant / local tax payment / interest on borrowed capital details (if any) to calculate income from house property. In case you want to claim any loss incurred during the current year, then you will need the relevant documents proving the loss. You will also need documents or proofs for claiming tax saving deductions u/s 80c, 80D, 80G, 80GG such as life and health insurance receipts, donation receipts, rent receipts, receipts for tuition fees etc., if the same were not considered in your Form 16. You need to verify the submitted ITR via online e-verify or offline, through ITR-V as usual.
