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Business Standard
2 days ago
- Business
- Business Standard
ITR-2 e-filing opens: what's new in AY 2025-26, who needs to use form
The Income Tax department on Friday enabled online filing for ITR-2, cheering taxpayers who were waiting for the functionality to file their returns for Assessment Year (AY) 2025-26. Though the activation was delayed, it brings several significant changes that taxpayers must understand before proceeding. Why the delay The rollout of ITR-2 utility was delayed due to extensive updates in forms. "The main reasons supposedly are the comprehensive revisions made to the ITR forms for AY 2025-26,' said Ritika Nayyar, partner, Singhania & Co. 'The CBDT needed additional time to update systems, including backend utilities and validation checks, to accommodate the new structures and ensure seamless integration," she said, referring to the Central Board of Direct Taxes. This programming and testing phase ensured that the updated forms would work without glitches on the e-filing portal. What's new in ITR-2? ITR-2 is to be used by " taxpayers with income from salary, pension, capital gains, or foreign assets, but no business income, the changes are substantial,' said Simarjeet Singh, assistant professor of finance and accounting at Great Lakes Institute of Management, Gurgaon. Key updates in ITR-2 include: Capital gains bifurcation: Transactions must now be reported separately based on whether they occurred before or after July 23, 2024. After this date, a flat 12.5 per cent tax rate (without indexation) applies, introducing added complexity for property and equity sales. Share buyback losses: Losses post-October 1, 2024, can be claimed only if the related dividend income is reported in Schedule OS. Higher threshold for Schedule AL: Taxpayers need to report assets and liabilities only if total income exceeds Rs 1 crore (up from Rs 50 lakh). Detailed TDS and deduction reporting: Specific section codes for TDS (e.g., 192 for salary) and sub-category details for deductions like 80C and 80G are now mandatory. Foreign assets: Expanded reporting requirements under Schedule FA and FSI. "ITR-2 for AY 2025-26 is no longer a mere compliance form — it demands a financial self-audit, especially for those with complex income profiles," said Singh. Who should file ITR-2? "ITR-2 applies to individuals and HUFs (Hindu Undivided Families) not having income from business or profession but having income from salary, multiple house properties, capital gains, foreign income or assets, and agricultural income exceeding Rs 5,000," said Naveen Wadhwa, vice-president of Taxmann. Such taxpayers include: -Salaried individuals with capital gains above Rs 1.25 lakh -Pensioners with foreign assets -Those earning dividend income or having multiple deductions under Chapter VI-A Start early Given the changes, experts advice self-filing taxpayers to organise documentation, Form 16/16A, AIS/TIS reports, capital gains statements, and cross-verify details with pre-filled data. Errors in reporting could lead to notices or disallowances.
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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.
Business Standard
29-05-2025
- Business
- Business Standard
It's time to get Form 16 from your employer, and what to do if it's missing
Salaried Indians have started receiving Form 16, a document employers provide to help in filing Income Tax returns (ITR). Here's when you should get the document. According to the Central Board of Direct Taxes (CBDT) under Rule 31(3) of Income Tax Rules, 1962, salaried employees should receive Form 16 by June 15. Employers are required to furnish Form 16 within 15 days after filing the fourth quarter TDS return (Form 24Q), which is due on May 31. This means the last date to issue Form 16 is June 15, as per CBDT norms. What is Form 16? Form 16 is a certificate that organisations give to their salaried employees. It is a summary of the salary paid and tax deducted at source in a financial year. It has two parts: Can you file ITR without Form 16? Yes, it is possible to file your tax return even if you haven't received Form 16. Taxpayers can use salary slips, Form 26AS, the Annual Information Statement (AIS), and bank statements as alternatives. 'Taxpayers should use salary slips and compare them with Form 26AS and AIS data. If all three are consistent, one can proceed with ITR filing even without Form 16,' said Ritika Nayyar, partner, Singhania & Co. What if there's a mismatch? Sometimes, the figures in Form 16 may not match what's reflected in the income tax portal. This can delay return filing. 'If there is a mismatch between Form 16 and AIS, taxpayers should reconcile using payslips and seek correction from the employer, if required,' said Sandeep Bhalla, partner at Dhruva Advisors. For FY25 (assessment year 2025-26), the last date to file ITR has been extended to September 15. Filing after this date may attract penalties.
