The Central Board of Direct Taxes (CBDT) has officially unveiled the income tax return (ITR) forms, specifically ITR-2 and ITR-3, for the financial year 2023-24 (assessment year 2024-25). The filing deadline for both ITR-2 and ITR-3 is scheduled for July 31, 2024. Taxpayers subjected to income tax audits with business income are required to submit ITR-3 by October 31, 2024.
Who Should File ITR-2?
Individuals and Hindu Undivided Families (HUFs) without income from business or profession profits are mandated to file ITR-2. This form applies to residents (ordinarily or non-ordinarily) or non-resident individuals, HUFs, directors of a company, individuals with investments in unlisted equity shares, and those with income from multiple sources, including salaries, multiple house properties, capital gains, and other sources like interest income.
Potential Consequences of Using the Incorrect ITR Form
Using an incorrect ITR form can lead to various consequences, including tax notices, correction requirements, and potential penalties. Taxpayers must ensure the accuracy of the chosen form to avoid such issues.
New Details in ITR-2
For FY 2023-24, ITR-2 includes specific details such as Legal Entity Identifier (LEI) details, contributions to political parties, and deductions for maintenance of a dependent with a disability. Individuals or HUFs subjected to a tax audit can now verify their ITR using Electronic Verification Code (EVC).
Who Must Submit ITR-3?
ITR-3 is designated for individuals and HUFs with income under the head “profits or gains of business or profession” who do not qualify for other ITR forms. Individuals and HUFs with business or professional income, including self-employment, freelancing, consultancy, or other business activities, must use ITR-3.
The release of these forms aims to facilitate the smooth filing of income tax returns for the specified categories, promoting accurate reporting and compliance. The inclusion of additional details in ITR-2 enhances the reporting process and ensures comprehensive disclosure of relevant information. Taxpayers are encouraged to review the forms carefully and choose the appropriate one based on their income sources and financial situation.
