ITR-2 for AY 2025-26 notified: Check key changes, who can use to file return for FY 2024-25

The Income Tax Department has notified the ITR-2 form for Assessment Year 2025-26. This form can be used to file the Income Tax Return for FY 2024-25 by eligible taxpayers. Let's look at who can use this form and key changes in it this year.

This form can be used by individuals and HUFs not having income from profits and gains of business or profession.

Generally, ITR-2 is used by taxpayers receiving income from sources like salary, pension, capital gains and other sources.

To be eligible to use this form, you should be an individual or a HUF and you should not have any 'Profit and Gains from Business or Profession'.

This form can be used to file a return when your income is from the following sources:

• Salary/pension, income from house property, long and short-term capital gains, income from other sources such as lottery, bets, and other legal gambling, agricultural income over ₹5000.

This form can be used by individuals with RNOR and non-resident status.

Further, this form can be used even when income from the above sources is above ₹50 lakh.

ITR-2 is must for the director of any company and an individual who has invested in unlisted equity shares of a company.

Taxpayers eligible to file ITR-1 may also file ITR-2. However, one should use ITR-1 first as long as they meet the eligibility criteria.

According to the tax department, the ITR-2 form for AY 2025-26 has the following updates:

• Schedule-Capital Gain split for gains before/after 23.07.2024 (post changes in Finance Act, 2024).

With this change in ITR-2, taxpayers will be able to specify whether they sold their long-term or short-term assets before July 23, 2024, or after that. The rates for taxation of gains in both cases are different.

• Capital loss on share buyback allowed if corresponding dividend income is shown as income from other sources (post 01.10.2024).

Earlier, taxpayers could not adjust capital loss on the buyback of shares in ITR-2. Now, capital loss on buyback of shares on or after October 1, 2025, can be claimed if the corresponding dividend income is shown as income from other sources.

• Asset and liability reporting limit raised to ₹1 crore of total income

Earlier in ITR-2, a taxpayer had to fill a schedule for assets and liabilities if their income exceeded ₹50,000 limit. This year, however, this limit has been raised to ₹1 crore. In other words, you will need to fill Schedule AL for assets and liabilities only if your income is over ₹1 crore. Thus, taxpayers having income between ₹50 lakh and ₹1 crore will get some relief.

• Enhanced reporting for deductions [80C,10(13A)], etc.

This year, ITR-2 users may be required to provide additional details about various deductions under Section 80, such as 80C, 80D, 80 CCD, etc. However, exact details will be known when the tax department makes the utility for ITR filing available.

• TDS section code to be reported in Schedule-TDS.

Earlier, taxpayers had to report details of the entity deducting TDS and the deducted amount. This year, ITR-2 requires reporting the section under which TDS has been deducted.