Key Changes and Common Mistakes to Avoid While Filing ITR-2 for FY 2025–26

As the Income Tax Department rolls out the ITR forms for Financial Year 2025–26 (Assessment Year 2026–27), taxpayers need to pay close attention to the changes introduced in ITR-2 and avoid common mistakes that could lead to scrutiny, delays, or penalties. ITR-2 is applicable to individuals and Hindu Undivided Families (HUFs) not having income from business or profession but having income from capital gains, more than one house property, or foreign assets.

This comprehensive guide by a leading Tax Consultant Company in Delhi highlights what’s new in the ITR-2 form and offers insights to help you file accurately and efficiently.

Who Should File ITR-2?

ITR-2 is applicable for individuals and HUFs who:

• Do not have income from business or profession
• Have income from salary/pension, house property (more than one), capital gains, foreign income/assets, or agricultural income exceeding Rs. 5,000
• Are Directors in a company or hold unlisted equity shares

" Filing ITR-2 requires careful documentation and accurate classification of income sources. Minor errors can lead to serious repercussions. "

Key Changes in ITR-2 for FY 2025–26

1. Pre-filled Data Integration Enhanced

The Income Tax Department has improved the auto-fill mechanism with tighter integration of data from Form 26AS, AIS, TIS, and mutual fund platforms.

2. Reporting of Capital Gains Now More Granular

• Detailed breakup required for STCG and LTCG across asset classes: shares, mutual funds, real estate, etc.
• Taxpayers must match gains with broker statements and AIS.

3. Enhanced Foreign Asset Disclosure

• Taxpayers holding foreign bank accounts, stocks, ESOPs, or properties must now provide country-wise details.
• Disclosure needs to be aligned with Black Money Act reporting standards.

4. Updated Schedule for Unlisted Shares

• PAN of companies, acquisition cost, date of acquisition, and FMV must be reported.
• Any buyback or sale needs to be matched with transaction proofs.

5. Residential Status Clarification

More detailed questions to determine residential status, especially for NRIs and returning residents.

6. Crypto Assets and Virtual Digital Assets (VDAs)

Specific reporting sections for income or losses from trading in cryptocurrencies or NFTs.

" The increasing use of technology in tax administration calls for absolute precision in reporting, especially with auto-matching against AIS and TIS. "

Common Mistakes to Avoid When Filing ITR-2

1. Incorrect Classification of Capital Gains

• Taxpayers often confuse short-term and long-term gains, especially in mutual funds and debt instruments.
• Each asset type has its own holding period and tax rate.

2. Overlooking Foreign Income Reporting

• Many salaried individuals with foreign ESOPs or mutual funds forget to report them, which can trigger notices under the Black Money Act.

3. Mismatch in TDS and Form 26AS

• Always reconcile your TDS as shown in Form 16/16A with what appears in Form 26AS or AIS.
• Mismatches often delay refunds.

4. Ignoring Schedule AL (Assets and Liabilities)

• This schedule is mandatory for taxpayers with income above Rs. 50 lakh.
• Property, shares, gold, and even cars must be disclosed with correct values.

5. Missing Exemption Claims Under Section 54 Series

• When you sell real estate and reinvest in another property or bonds, you may be eligible for exemptions under sections 54, 54F, 54EC, etc.
• Many forget to fill this section, leading to higher tax liability.

6. Filing Under the Wrong ITR Form

• Individuals with more than one property or capital gains often mistakenly file ITR-1 or ITR-4.
• Using the wrong form may render your return defective.

" Avoiding mistakes isn’t just about accuracy—it’s about protecting yourself from unnecessary scrutiny and penalties. "

Why Use Professional Tax Consultant Services?

At our Tax Consultant Company in Delhi, we specialize in:

• Capital gains tax planning
• Reconciliation of TDS with AIS and broker statements
• Filing for NRIs and foreign asset holders
• Handling complex cases involving multiple house properties or inheritance

Our Income Tax service in Delhi ensures that you:

• Maximize deductions and exemptions
• Minimize errors in reporting
• Stay fully compliant with latest CBDT guidelines

" Filing ITR-2 is not just about compliance—it's an opportunity for strategic financial planning. "

Pro Tips for Smooth ITR-2 Filing

• Start Early: Don't wait for the deadline. Early filers avoid portal overloads and last-minute errors.
• Keep Documents Handy: Form 16, 26AS, AIS, TIS, Demat statements, bank interest certificates, etc.
• Use Tax Software or Professional Help: Manual filing increases the chances of errors.
• Review Before Submission: Validate all fields, check for bank account details, and cross-verify capital gains.

Conclusion

Filing ITR-2 for FY 2025–26 requires precision, awareness of the latest updates, and attention to detail. With increasing digital scrutiny by the Income Tax Department, accurate filing is not optional—it's mandatory.

Work with the Best Tax Consultant company in Delhi to ensure your return is not only timely and accurate but also optimized for tax savings. Our expert Tax consultant services in Delhi and Income Tax service in Delhi offer end-to-end assistance, helping you avoid pitfalls and make the most of available benefits.

Don’t let mistakes cost you—file smart, file right with expert guidance!