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Mint
14-07-2025
- Business
- Mint
The savvy set: How one category became India's fastest-growing taxpayer tribe
The Indian investor's hard turn to stocks, property and foreign assets after the pandemic shock has been much spoken about. Now, the numbers are showing up in the tax filings. Individuals with diverse streams of income including rent from multiple properties, capital gains from shares or property or have foreign income or assets, but are not businessmen or professionals, are the fastest growing tribe of income tax payers, indicating the changing make-up of India's tax base. Latest data from the income tax department show that after the pandemic, their share in total tax returns filed in a year has doubled to 14% in the FY25 assessment year. In every assessment year since FY21, this class remained the fastest growing set of tax return filers, showing their deeper participation in investment activities. In absolute terms, the number of income tax return 2 (ITR-2)—the form used for reporting individuals' income that is more than ₹50 lakh which includes capital gains or rent from more than one house property or foreign income—has jumped from 4.75 million from the FY21 assessment year to 12.17 million in FY25 assessment year, showed data from the department. ITR-2 upsurge In the FY22 assessment year, ITR-2 filings swelled more than 27%, reporting the income earned in FY21. In an assessment year, the income earned in the previous financial year is reported and any pending tax is paid. In the FY23 assessment year, ITR-2 filings jumped by more than 30% from the year-ago period. In the following assessment year, the growth was about 14%. In the meantime, the number of tax returns filed by individuals with salary income up to ₹50 lakh but without any of these additional revenue streams of ITR-2 filers, grew from 31.65 million in FY21 assessment year to 35.97 million in FY25, but their share in the overall returns filed shrank from about 49% to about 43%. Extensive reporting The trend comes in the wake of extensive use of third-party reporting of financial transactions in the economy, expanding use of taxes deducted at source to map economic activity, and opportunities given to assessees to report their income based on the transactions that are in the tax department's radar. The strong retail equity market participation by households is also seen to have contributed to the surge in ITR-2 filings. 'The steady rise in ITR-2 filings points to a significant shift in the income and investment profile of Indian taxpayers," said Sonu Iyer, partner and national leader, people advisory services, tax at EY India. It reflects not only higher individual earnings but also deeper retail participation in capital markets and other investment avenues, said Iyer. 'Enhanced compliance monitoring and increased transparency of financial transactions have also contributed to this trend, enabling the tax department to widen the tax base and improve reporting discipline," explained Iyer. Shifting landscape The sharp rise in ITR-2 filings signals a significant transformation in India's tax landscape and is a strong indicator that more individuals are now actively participating in capital markets, as can be seen from the increase in the opening of new demat accounts, said Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm. At the end of December 2024, India had 185 million demat accounts, 33% more than reported in the year-ago period, the Economic Survey 2024-25 had pointed out. 'It aligns with the trend seen post-pandemic, where retail investor participation in equities, mutual funds, and real estate has grown substantially. However, this trend is not just a reflection of increased participation in investment activities such as gains from stocks, mutual funds, property, and foreign assets but also, highlights the successful broadening of the tax base through enhanced compliance monitoring," said Maheshwari. Tech-driven reporting The income tax department's adoption of tech-driven automated reporting of transactions has played a pivotal role, Maheshwari said, referring to the tax authority's collection of information from third parties like banks, credit cards and property registrars and making it available to the tax payers in the form of Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). 'These platforms now automatically capture and report a wide array of financial transactions including winnings from lotteries, virtual digital assets and online games. As a result, individuals who previously might not have disclosed such income are now required to file ITR-2, ensuring a more comprehensive reporting and tax compliance," said Maheshwari. This evolution points to a maturing tax ecosystem where both increased financial sophistication among individuals and robust digital reporting mechanism by authorities are leading to more transparency and inclusivity to India's tax net, added Maheshwari.
News18
07-07-2025
- Business
- News18
ITR Filing FY2024-25: Why Can't Taxpayers File ITR-2 And ITR-3 Yet, Even After Deadline Extension?
Last Updated: The delay in releasing ITR-2 and ITR-3 forms is likely due to the complex nature of these returns and the major updates introduced this year. ITR Filing FY2024-25: The income tax filing return (ITR) season for the FY 2024-25 has been underway. The Income Tax department has extended the deadline to September 15, 2025 from July 31, 2025, giving taxpayers more time to complete their tax duties without any rush and avoid any errors and mistakes. For that purpose, IT department has already opened the utilities for the form-1 and form-4 on the income tax portal. Moreover, most employees have received Form-16 by now, allowing salaried taxpayers to fill the ITR on Income Tax Portal. But Form 2 and Form 3 are still not available for taxpayers, which raises several questions. However, those who file ITR-2 or ITR-3 have not yet been able to start the process of ITR filing since the utilities have not yet been released online ( or offline by the tax department. Why Are There A Delay In ITR-2 And ITR-3 Forms? The delay in releasing ITR-2 and ITR-3 forms is likely due to the complex nature of these returns and the major updates introduced this year, experts say. According to Sonu Iyer, Partner and National Leader – People Advisory Services (Tax) at EY India, these forms are meant for individuals with more detailed financial profiles—including those with income from multiple properties, capital gains, foreign income or assets, business/professional earnings (for ITR-3), directorships, or unlisted shares. These forms also apply to people with total income over Rs 50 lakh or those carrying forward past losses. The delay, she said, is mainly due to technical changes needed in the filing utilities—especially after updates introduced through the Finance Act 2024. For example, taxpayers now have to report capital gains earned before and after July 23, 2024, give detailed breakdowns of deductions, and specify TDS section codes more clearly. ITR-2 Form This can be filled by individuals or Hindu Undivided Families (HUFs) whose total income for the Year 2025–26 includes different sources. It is suitable for those earning from a salary or pension, income from house property or income from other sources. It is also for people who are company directors or who have invested in unlisted shares during the year, along with Resident Not Ordinarily Residents (RNORs) and Non-Residents. If you have income from capital gains, foreign income or agricultural income of more than Rs 5000, you must use form 2. ITR-3 Form Individuals or Hindu Undivided Families (HUFs) who earn income from running a business are eligible to file this. The form should be used if the person is not using the presumptive income scheme and needs to maintain proper books of accounts or get them audited. Those who have invested in unlisted equity shares during the financial year.
Time of India
03-07-2025
- Business
- Time of India
ITR filing: Why are ITR-2 and ITR-3 forms still not available on Income Tax e-filing portal? Top reasons explained
Taxpayers have little reason to worry since this year the Income Tax Department has extended the deadline to file IT. (AI image) ITR filing FY 2024-25: It's the month of July and every year this time, taxpayers are usually scrambling to get together documents to file their income tax return or ITR. However, those who file ITR-2 or ITR-3 have not yet been able to start the process of ITR filing since the utilities have not yet been released online ( or offline by the tax department. However, taxpayers have little reason to worry since this year the Income Tax Department has extended the deadline to file ITR from July 31 to September 15, 2025. ITR: Why Are ITR-2 & ITR-3 Not Available For Filing? Experts are of the view that the extensive changes in the Income Tax Return forms and the complexity of ITR-2 and ITR-3 has possibly caused the delay in release from the Income Tax Department's end. Sonu Iyer, Partner and National Leader People Advisory Services - Tax, EY India explains, 'The ITR-2 / ITR-3 return forms are applicable for individuals with complex financial profiles such as income from multiple house properties, capital gains, foreign assets and foreign income, business or professional income (in the case of ITR-3), directorships, unlisted equity shares, total income exceeding INR 5 million, brought forward and carry forward of losses, etc. ' Also Read | Income Tax Return e-filing: Can you keep switching between new and old tax regime every year? What taxpayers should know 'These forms are significantly more detailed than the simpler ITR-1/ ITR-4 forms. The delay in releasing the e-filing utility (online and offline) for ITR-2 / ITR-3 can be attributed to the substantive changes introduced in the return forms such as separate reporting of capital gains earned before and after 23 July 2024, detailed reporting of deductions / exemptions, reporting of TDS section codes, etc,' Sonu Iyer tells TOI. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 2025 Top Trending local enterprise accounting software [Click Here] Esseps Learn More Undo According to the EY tax expert, such changes require comprehensive technical modifications to align the utility with the enhanced reporting requirements and provisions of the Finance Act, 2024. The Income Tax Department has extended the deadline for filing returns to 15 September 2025 recognizing the time required to update the utilities and the time required for system readiness,' she adds. Who Has To File ITR-2/ITR-3 for FY 2024-25? ITR-2 is for individual and HUF Taxpayers. This form is suitable for individuals and Hindu Undivided Families who receive: * Salary/pension earnings * Revenue from multiple residential properties * Any amount of capital gains * Overseas income or assets * Agricultural proceeds exceeding Rs.5,000 * Those with RNOR/NRI status * Company directors or holders of unlisted equity * Cases involving combined spousal income Exclusion criteria: Persons earning from business or professional activities Latest update: Excel-based utility now accommodates revised return submissions under Section 139(8A). Also Read | ITR e-filing AY 2025-25: What is Annual Information Statement (AIS) and how is it different from Form 26AS? Top points for taxpayers ITR 3 is applicable for self-employed individuals, independent contractors and firm partners Mandatory filing requirements - For individuals or HUF having: * Revenue from proprietorship ventures or professional activities. * Partnership income (excluding Limited Liability Partnerships). * Any amount of capital gains income or related loss carry-forward. * Ownership of non-listed equity shares. * Profits or losses from derivatives trading. * Additional earnings from employment, property rental or miscellaneous sources alongside business revenue. This form is suitable when your income composition makes you ineligible for ITR 1, ITR 2, or ITR 4. Submission of Form 10-IEA acknowledgement is necessary when choosing to opt out of the new taxation structure. ITR Deadline Extension: What I-T Department Has Said On May 27, 2025, the Central Board of Direct Taxes (CBDT) announced the extension of the due date to file ITR. 'In view of the extensive changes introduced in the notified Income Tax Returns (ITRs) and considering the time required for system readiness and rollout of ITR utilities for Assessment Year (AY) 2025-26, CBDT has decided to extend the due date for filing returns.' The reasons CBDT gave were: ITRs for Assessment Year 2025-26 feature significant modifications in structure and content, designed to streamline the compliance process, improve transparency and ensure precise reporting. Due to these alterations, additional duration is required for developing systems, integrating components and evaluating the associated utilities. Additionally, credits originating from Tax Deducted at Source (TDS) statements, which must be submitted by May 31, 2025, are anticipated to appear in early June, thus restricting the available timeframe for return submission without such an extension. Also Read | Income Tax Return: Are capital gains from MFs taxed differently under new & old regime? What taxpayers should know about new LTCG, STCG rules Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
18-06-2025
- Business
- Mint
Calculating tax on LTCG this season may be a bit complex. Here's your guide
NEW DELHI : If capital gains from stocks or equity-oriented mutual funds are your only source of income in 2024-25, calculating your tax liability may be a bit complex. That's because tax rates on long-term capital gains (LTCG)—investments held for more than a year before being sold—from equity are taxed at 12.5% for assets sold after 23 July 2024 and 10% for those sold before this date. Deducting the permissible exemptions is crucial to calculating net taxable income. For capital gains from equities, an exemption of ₹1 lakh and ₹1.25 lakh is allowed on equity sold before and after 23 July 2024, respectively. Also Read: New regime narrows LTCG-regular income tax gap. Are equities still worth it? Also, under the old tax regime, individuals are eligible for a basic exemption limit of ₹2.5 lakh. Under the new tax regime, this limit is ₹3 lakh. These deductions are used to compute the net capital gains that are subject to tax. 'Assuming an assessee has made LTCG on equity mutual funds that were sold after 23 July 2024, the net gains will be computed after first allowing ₹1.25 lakh as an enhanced exemption, followed by a reduction of the basic exemption limit applicable under both the regimes. The remaining amount, if any, will be taxable at the applicable rate of 12.5%," explained Vishwas Panjiar, partner, Nangia Andersen LLP. For example, Mr A earned ₹5 lakh LTCG. First, after deducting the ₹1.25 lakh exemption under Section 112A of the Income Tax Act, the gains stand at ₹3.75 lakh. Since this is above the basic exemption limit (under both tax regimes), the gains are taxable. However, next, Mr A can deduct the basic exemption amount of the tax regime he picks. Since the new tax regime has a higher exemption limit of ₹3 lakh, Mr A's net capital gains stand at ₹75,000 and his tax liability at ₹9,375 (12.5% rate). Also Read: Capital gains on equities: Here's all you need to know when filing tax returns this year If, after the deduction under 112A ( ₹1.25 lakh or ₹1 lakh), the total capital gains are below the applicable exemption limit, no income tax is to be paid. Moreover, the individual may not even be required to file an ITR in such a case. 'The obligation to file ITR will also depend on that he is a resident individual, without any foreign asset or signing authority in a foreign bank account, does not fulfil other prescribed conditions where filing of tax return is mandatory or where the individual does not have any refund of tax or carried forward loss to claim," said Sonu Iyer, partner and national leader, people advisory services-tax, EY India. 'If these criteria are met and net capital gains are below the basic exemption limit, an ITR need not be filed," she added. FY26 onwards, the standard LTCG tax rate of 12.5% is applicable on equity assets. Why rebate benefit not allowed Both the tax regimes offer a rebate up to a certain income limit under Section 87A, meaning incomes up to the rebate limit are tax-free. The old regime allows a tax rebate on incomes up to ₹5 lakh. In the new regime, the rebate limit until 2024-25 was ₹7 lakh, which has been increased to ₹12 lakh from FY26 onwards. However, equity capital gains do not qualify for this rebate. 'Rebate of income tax is not available on LTCG and STCG (short-term capital gains) made on equity assets. This means if a taxpayer only has capital gains income in 2024-25 and it is below the rebate limit of ₹7 lakh, they would still pay tax on it at 12.5% tax rate, after deducting the applicable exemptions," said Manohar Goenka, a chartered accountant (CA) and chief manager, REC Ltd. In contrast, Panjiar said the rebate under Section 87A is available for all other cases of capital gains, provided the total income remains within the threshold. Advance tax obligation When the total tax liability in a fiscal year exceeds ₹10,000, the taxpayer is obliged to pay advance tax. If capital gains are your only income, the advance tax still needs to be paid. Also Read: For some NRIs, capital gains from Indian mutual funds are tax-free Advance tax is paid in four specified instalments throughout the year on or before the prescribed due dates. Defaulting on due dates attracts penal interest. Considering the nature of capital gains that are often non-recurring and sudden, the law provides certain relief on advance tax payments, said Panjiar. 'If the capital gains have arisen after one of the specified instalment dates, the taxpayer can pay the amount of advance tax in the subsequent instalments, and the taxpayer is not liable to pay interest on the missed instalments." While computing advance tax on capital gains, taxpayers should consider both the exemption of ₹1.25 lakh as well as the basic slab exemption applicable under the respective tax regime. 'Additionally, it is important to consider TDS/TCS while computing your net tax liability," said Panjiar.
Time of India
27-05-2025
- Business
- Time of India
Deadline to file ITR extended to September 15 amid systems tweaks
Photo/Agencies NEW DELHI: The income tax department has extended the deadline for filing of tax returns by individuals from July 31 to Sept 15 in the wake of several amendments to the law, which have necessitated revisions in the notified ITRs for this assessment year, requiring the authorities to rework the technology platform, among other things. "The notified ITRs for Assessment Year 2025-26 (FY2024-25) have undergone structural and content revisions aimed at simplifying compliance, enhancing transparency, and enabling accurate reporting. These changes have necessitated additional time for system development, integration, and testing of the corresponding utilities. Furthermore, credits arising from TDS statements, due for filing by May 31, 2025, are expected to begin reflecting in early June, limiting the effective window for returns filing in the absence of such extension," the Central Board of Direct Taxes (CBDT) said in a statement. For the last few years, the tax department has been sticking to the July 31 deadline meant for individuals who do not need to get audits done. The deadline covers the bulk of I-T returns filed during the year. Whenever the deadline has been extended in the past, it has happened quite late in the day. But this time the I-T department has opted to inform taxpayers early. "Given the requirements of these new ITR forms, the e-filing utility (both online and offline) needs to be updated by govt. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Trading CFD dengan Teknologi dan Kecepatan Lebih Baik IC Markets Mendaftar Undo Therefore, it is a very welcome move to extend the ITR filing deadline..., allowing taxpayers the time required to comply with these enhanced reporting requirements and legislative changes," said Sonu Iyer, partner and national leader for People Advisory Services-Tax at consulting firm EY India. "Given the complexity and increased reporting requirements in the revised ITR forms, including more granular disclosures of capital gains, foreign income, and asset ownership, the extension offers much-needed relief to taxpayers... taxpayers are advised to utilise this extended window to compile their financial data, reconcile necessary information, thereby minimising the risk of filing errors or omissions," said Sandeep Sehgal, tax partner at consulting firm AKM Global. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
