ITR-2, ITR-3 for FY 2023-24: If you earn over Rs 50 lakh or own more than one house, you may have tax trouble if...

The Central Board of Direct Taxes (CBDT) vide Notification No. 19 of 2024 dated 31.01.2024, has notified Income-tax Return Forms (ITR Form)- 2, 3 and 5 for the Assessment Year 2024-25. Further, vide Notification No. 16 of 2024 dated 24.01.2024, ITR Form-6 has been notified for the AY 2024-25.

Earlier, ITR-1 and ITR-4 for the AY 2024-25 were notified vide Notification No. 105 of 2023 dated 22.12.2023. All ITR Forms 1 to 6 have since been notified and will come into effect from 1st April, 2024. The deadline for submitting ITR-2 and ITR-3 is July 31, 2024. 

The Income Tax department has notified that taxpayers with earnings of more than Rs 50 lakh or have more than one house need to share extra information when they file their tax returns for this fiscal.

Under the revised ITR-2, the Income Tax department has added a few more clauses, such as the inclusion of Legal Entity Identifier (LEI) details, details of contributions made to political parties, details of deductions for the maintenance, including medical treatment of a dependent with a disability.

The tax department has said those earning more than Rs 50 lakh should give information on Legal Entity Identifier (LEI), contributions to political parties with payment details, and details about deductions claimed for taking care of a dependent with a disability, including medical expenses. An LEI is a unique 20-symbol code used for identification in the global financial system. It is mandatory for crediting refunds exceeding Rs 50 crore.

Individuals and Hindu Undivided Families (HUFs) who do not have income from profits and gains of business or profession are required to file ITR using ITR-2. ITR-2 can be filed by individuals or HUFs who:

> Are not eligible to file ITR-1 (Sahaj)
> 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

> Have the income of another person like spouse, minor child, etc., to be clubbed with their income – if income to be clubbed falls in any of the above categories.

Changes in ITR-2 forms:

Chartered accountant Mihir Tanna, associate director, S.K Patodia and Associates, told the Economic Times that ITR-2 forms has been revised with som additions for ITR FY2023-24:

> Details of Legal Entity Identifier (LEI)
> Details of contributions made to political parties, if made and claimed (Date, Mode of payment and transaction/Cheque number/IFSC Code)
> 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),
> Individuals or HUFs subjected to a tax audit can now verify their ITR using the electronic verification code (EVC). Earlier, individuals relied on digital signature certificates (DSCs).

ITR-3 is for individuals and HUFs who have income under the head "profits or gains of business or profession" and who do not qualify to file Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam). 

ITR-3 is for those who have income derived from profits or gains of business or profession. This includes income from self-employment, freelancing, consultancy, or any other form of business or professional activities. HITR-3 is also meant for HUFs engaged in business or profession and generating income from such activities.
 

Also read: ITR filing 2023-24: CBDT issues ITR-2, ITR-3 forms for return filing for AY 2024-25