The Central Board of Direct Taxes (CBDT) has notified the income tax return (ITR) forms, ITR-2 and ITR-3. Many entities, including individuals, who have certain specific types of income are required to file their ITR using these forms for FY 2023-24 (AY 2024-25). The last date to file ITR-2 and ITR-3 is July 31, 2024. Whereas taxpayers who are required to conduct income tax audit and have business income must file ITR-3 by October 31, 2024.
Who is required to file ITR-2
According to frequently asked questions (FAQs) on the Income Tax Department’s website, following Individuals or Hindu Undivided Families (HUFs) are required to file ITR-2:
- Not eligible to file ITR-1
- Individuals or HUFs who do not have income from profit and gains of business or profession and also do not have income from profits and gains of business or profession in the nature of interest, salary, bonus, commission or remuneration by whatever name called, due to, or received by him from a partnership firm, or
- Have the income of another person like spouse, minor child, etc., to be clubbed with their income.
Changes in ITR-2 for FY 2023-24
According to chartered accountant Mihir Tanna, associate director, S.K Patodia and Associates, a CA firm, “In ITR 2 following details are added:
- Legal Entity Identifier (LEI) details
- Details of contributions made to political parties, if claimed (Date, Mode of payment and transaction/Cheque number/IFSC Code), and
- Details of deduction in respect of maintenance including medical treatment of a dependent who is a person with disability (Type of dependent, PAN, Form 10IA details),
- Further, Individual or HUF required to get tax audit done, can also verify ITR with EVC (earlier only through DSC).”
An LEI (Legal Entity Identifier) is a unique code, consisting of 20 symbols, that allows for identification within the global financial system. This is required for credit of refunds exceeding Rs 50 crore.
What are the documents required to file ITR-2
According to the FAQs by the income tax department, the following documents are required to be submitted for filing ITR-2:
- Salaried individuals need Form 16,
- Individuals need Form 16A i.e. TDS certificate if they have earned any interest on fixed deposits or savings bank accounts and TDS has been deducted.
- Form 26AS is also required for verification of TDS on salary and other incomes.
- In case an individual has not submitted their rent receipts and is living in rented accommodation then he/she needs to have rent receipts.
- If an individual or HUF has any capital gains from shares or securities, then a summary of annual profit/loss statement is required.
- 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 exhibiting the loss.
- In case you wish to claim previous year’s loss, you will need a copy of ITR-V pertaining to the previous year, disclosing the said loss.
- You will also need documents or proofs for claiming tax saving deductions under section 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.
Who is required to file ITR-3
According to the FAQs published by the income tax department, ITR-3 form is to be used by an entity including individual or a HUF who has income under the head “profits or gains of business or profession” and who is not eligible to file Form ITR?1 (Sahaj), ITR?2 or ITR?4 (Sugam).