ITR Filing: Income Tax Department released ITR-2 form, know 5 big changes
ITR Filing: The Income Tax Department has notified the ITR-2 form. Now new rules are applicable regarding section 80 deduction, taxation on capital gains, TDS section code. Know how these changes will affect your tax filing.
ITR Filing: The Income Tax Department has notified the ITR-2 form for the financial year 2024-25 (Assessment Year 2025-26). This form is for those individuals and Hindu Undivided Families (HUFs) who do not have any income from business or profession. This time many big changes have been made in the form, which will affect millions of taxpayers.
Who will have to fill ITR-2?
ITR-2 is for those taxpayers whose income comes from special sources. Such as:
Salary or pension
Rent from one or more house properties
Capital gains (from sale of shares, bonds, mutual funds etc.)
Income from other sources (such as lottery, horse racing, legal betting etc.)
Agricultural income of more than ₹ 5,000
NRI (Non-Resident) or RNOR (Resident but Not Ordinarily Resident) individual
Apart from this, if someone’s income is more than ₹ 50 lakh, he can still fill ITR-2. ITR-2 form is mandatory for company directors and individuals investing in unlisted companies. Those earning long term capital gains of more than ₹ 1.25 lakh in listed equity also have to file ITR-2.
If you are eligible for ITR-1, you can also file ITR-2 if you wish. However, it is wise to opt for the less complex ITR-1 first, provided you fulfill all its conditions.
What are the changes in the ITR-2 form?
New timeline in capital gains: As per the Finance Act 2024, now in the form you have to tell when you sold your capital asset – before or after 23 July 2024. This is because the taxation rate on capital gains has changed from that date.
Capital loss on share buyback: Earlier the loss on share buyback could not be claimed. But now, if the date of buyback is on or after 1 October 2024, and you have shown the dividend received on it in ‘Income from other sources’, then the capital loss can be adjusted.
Schedule AL limit: Earlier in the ITR-2 form, if the total income of a taxpayer was more than ₹ 50 lakh, then he had to fill the information of his assets and liabilities in Schedule AL (Assets and Liabilities). But from this year this limit has been increased to ₹ 1 crore. This change will provide great relief to taxpayers with income between ₹50 lakh and ₹1 crore.
Section 80 deductions: Now in the ITR-2 form, more detailed information of deductions under sections 80C, 80D, 80CCD, 10(13A) etc. will have to be filled. Its purpose is more transparent reporting of investments and expenses of taxpayers.
Mentioning of ‘section code’ mandatory in TDS: Earlier, while filling the ITR-2 form, one had to only tell who deducted the TDS and how much amount was deducted. Now it will also be necessary to tell under which section the TDS was deducted. This will help the tax department in tracking.
Capital gains allowed in ITR-1
The Income Tax Department has allowed showing long term capital gains on equity shares or mutual funds in the ITR-1 form from this year. If you have earned up to ₹1.25 lakh from mutual funds or stock market, then you can show it in ITR-1. However, for taxpayers with amounts above this, it will be mandatory to file ITR-2.
The post ITR Filing: Income Tax Department released ITR-2 form, know 5 big changes first appeared on informalnewz.
News