Filing ITR-2? One Mistake Could Delay Your Refund—Here’s the Right Way to Do It!

Filing your Income Tax Return may seem simple, but one small mistake, and your return might get marked as defective, or worse, rejected. Every year, thousands of salaried individuals, investors, freelancers, and even housewives file their returns using the wrong form, just because they don’t understand which ITR form applies to them.

And if you file the wrong form?

❌ Expect delays in refunds,
❌ A tax notice from the department, or
❌ Penalty or interest due to re-filing.

That’s why, this year, if you have capital gains, crypto, multiple properties, or are a high-salaried individual, knowing when to use ITR-2 is a must.

Let’s break it all down.

Who Should File ITR-2?

The ITR-2 can be filed by individuals or HUFs who do not earn income from business or profession. This form is ideal for:

• 🧑‍💼 Salaried individuals with income above ₹50 lakhs
• 🏠 Those owning more than one house property
• 📈 Individuals with capital gains (from shares, mutual funds, real estate)
• 💰 People earning interest income, dividends, or lottery winnings
• 🌾 Those with agricultural income exceeding ₹5,000
• 🌍 NRIs or RNORs (Resident but Not Ordinarily Resident)
• 💸 Crypto traders or investors

If you have business or professional income, this form isn’t for you—you’ll need to file ITR-3 instead.

What’s New in ITR-2 for FY 2024–25?

The e-Filing of Income Tax Return or Forms has become more structured, and the ITR-2 form has been updated with significant changes for AY 2025–26. Here's what you must know:

 1. Capital Gains Segregation

Now, you need to split your capital gains into:

• Transactions before 23rd July 2024
• Transactions after 23rd July 2024

This change aligns with the Finance Act 2024 for better accuracy and audit trail.

 2. Share Buyback Loss Conditions

From 1 October 2024, losses from share buybacks will only be allowed if the buyback amount is declared as a dividend under 'Income from Other Sources'.

 3. Asset & Liability Threshold Increased

Previously, individuals with income over ₹50 lakhs had to disclose assets and liabilities. Now, this limit is raised to ₹1 crore, giving middle-income taxpayers a breather.

Also Read: Why July 23, 2024, is a game-changer for ITR Filing

 4. Deduction Details Mandatory

No more lump-sum deduction claims. You must now itemise 80C, 80D, HRA, and other deductions—e.g., how much to LIC, how much to tuition, etc.

 5. TDS Reporting by Section

TDS must now be reported by specific sections, like:

• 194I for rent
• 194J for professional fees

This will help CPC cross-verify TDS data more accurately.

 6. New Schedules Added

Two new parts introduced:

• Part A_139_8A – for filing updated returns
• Part B-ATI – to track Adjusted Total Income

 7. Rebate Under Section 87A (Updated)

• Under New Regime: Full ₹25,000 rebate up to ₹7 lakh income
• Under Old Regime: ₹12,500 rebate up to ₹5 lakh income

 8. LEI Number for Big Refunds

Entities claiming ₹50 crore refunds via NEFT/RTGS must now quote their Legal Entity Identifier (LEI).

Documents Required for ITR-2 Filing

Keep these documents ready before you log in to the portal:

• Form 16 (Salary)
• Form 16A (TDS on FD/Interest)
• Form 26AS (for TDS verification)
• Capital Gains statements (Shares/Mutual Funds)
• Rent Receipts (for HRA)
• Bank Statements & FD Receipts
• Tenant Details, Property Tax Papers
• Receipts for 80C, 80D, 80G deductions

Also Read: Hidden Home Loan Tax Benefits Every Taxpayer Should Know

 How to File ITR-2 Online (Step-by-Step)

1. Log in to incometax.gov.in
2. Navigate to: e-File > Income Tax Return > File Income Tax Return
3. Select Assessment Year: 2025–26
4. Choose filing mode: Online
5. Select taxpayer type: Individual or HUF
6. Choose form: ITR-2
7. Review & confirm pre-filled data
8. Fill sections:
   • Salary (from Form 16)
   • House Property
   • Capital Gains
   • Other Sources (Interest, Crypto, Lottery, etc.)
9. Add deduction details under Chapter VI-A
10. Preview & validate return
11. e-Verify using Aadhaar OTP, Net Banking, or DSC

Once verified, you’ll get a confirmation message and an acknowledgement receipt.

Conclusion

The new ITR-2 form for AY 2025–26 brings both clarity and complexity. With changes in capital gains reporting, deduction breakdown, and TDS sections, taxpayers must be extra careful this year.

Filing the right ITR form not only avoids notices and penalties but also ensures faster processing and a refund. If you’re a salaried individual with investments, crypto, or multiple assets, choosing ITR-2 is your best bet.

Need help in filing the correct ITR this year?
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