Tax Alert: Are you earning over Rs 50 lakh or do you own more than one house? If so, be aware that the Income Tax department has recently issued a notification requiring taxpayers with these circumstances to furnish additional details when filing their tax returns for the current fiscal year. The Central Board of Direct Taxes (CBDT) has introduced Income-tax Return Forms (ITR Forms) - 2, 3, 5, and 6 for the Assessment Year 2024-25 through recent notifications.

LEI and deductions

ITR-2 has undergone revisions, including the inclusion of Legal Entity Identifier (LEI) details, information about contributions to political parties with payment details, and details concerning deductions claimed for the care of a dependent with a disability, encompassing medical expenses. Taxpayers with earnings exceeding Rs 50 lakh are required to furnish LEI information. LEI is a unique 20-symbol code utilised for identification in the global financial system, mandatory for refunds exceeding Rs 50 crore.

Individuals and Hindu Undivided Families (HUFs) without income from business or profession profits are mandated to file ITR-2. This form is applicable for those who cannot use ITR-1 (Sahaj) and do not have income from business or profession profits, including interest, salary, bonus, commission, or remuneration from a partnership firm. Additionally, individuals with income to be clubbed from another person, like a spouse or minor child, must also use ITR-2.

Key changes in the ITR-2 forms for the fiscal year 2023-24 include the incorporation of LEI details, disclosure of contributions to political parties with payment specifics, and details about deductions for maintaining a dependent with a disability, encompassing medical treatment.

EVC for audits

According to experts, individuals or HUFs subjected to a tax audit can now verify their ITR using the electronic verification code (EVC), a departure from the previous reliance on digital signature certificates (DSCs).

ITR-3, designed for individuals and HUFs with income from business or profession, has also been notified. It applies to those ineligible for filing ITR-1, ITR-2, or ITR-4. ITR-3 is specifically for individuals and HUFs generating income from self-employment, freelancing, consultancy, or any other form of business or professional activities, including those engaged in business or profession generating income. The deadline for submitting ITR-2 and ITR-3 is July 31, 2024.