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ITR Filing: Income Tax Department issued ITR -2 form, know 5 major changes – Income Tax Department Notifies ITR 2 Form Key Changes and Impact

ITR Filing: The Income Tax Department has noticed the ITR-2 form for the financial year 2024-25 (Assessment Year 2025-26). This form is for those individual and Hindu undivided families (HUFS) who have no income from business or profession. This time many major changes have been made in the form, which will affect millions of taxpayers.

Who has to fill ITR-2?

ITR-2 is for taxpayers whose income is from particular sources. Such as:

  • Salary or pension
  • Fare from one or more house property
  • Capital gains (from the sale of capital, bonds, mutual funds etc.)
  • Income from other sources (eg lottery, horse racing, legal betting etc.)
  • Agricultural income of more than ₹ 5,000
  • NRI (Non-Resident) or RNOR (Resident but not Ordinarily Resident)

Apart from this, if someone’s income is more than ₹ 50 lakh, then he can fill ITR-2. ITR-2 form is mandatory for directors of the company and individuals investing in unlisted companies. In listed equity, the long-term capital gains have to file ITR-2 to the earning of more than ₹ 1.25 lakh.

If you are eligible for ITR-1, you can also file ITR-2. However, it is prudent to choose the option of less complex ITR-1 first, provided you fulfill all its conditions.

What are the changes in ITR-2 form?

  1. New timeline in capital gains: According to Finance Act 2024, now in the form you have to tell when you sold your capital property- before or after 23 July 2024. The reason for this is that the taxation rate on capital gains has changed from that date.
  2. Capital loss on share buyback: Los on the first share buyback could not be claimed. But now, if the date of buyback is 1 October 2024 or after that, and you have shown the dividend found on it in ‘income from other sources’, then the capital loss can be adjusted.
  3. Schedule al limit: Earlier in ITR-2 form, if the total income of any taxpayers was more than ₹ 50 lakh, then he had to fill the information of his properties and liabilities in Schedule Al (Assets and Liabilites). But from this year this limit has been increased to ₹ 1 crore. This change will provide great relief to taxpayers with income of ₹ 50 lakh to ₹ 1 crore.
  4. Deduction of Section 80: Now in the ITR-2 form, the form will have to fill more fine information about the cuttings under Section 80C, 80D, 80CCD, 10 (13A) etc. in the form. Its purpose is more transparent reporting of taxpayers’ investment and expenses.
  5. Mandatory mention of ‘section code’ in TDS is mandatory: Earlier, after filling the ITR-2 form, only had to tell who cut the TDS and how much amount was deducted. Now it will also be necessary to tell under which section TDS is cut. This will help the tax department in tracking.

Capital gains permission in ITR-1

The Income Tax Department has allowed to show long-term capital gains on equity share or mutual funds in 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, it will be mandatory for taxpayers with money above this to file ITR-2.

ALSO READ: EXPLAINED: ITR-1 to ITR-7 … Know which form should be filled

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