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ITR-2 filing mistakes: 8 common errors that could delay your refund or trigger an income tax notice

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By Sangeeta Ojha

3 min read | Updated on September 04, 2025, 15:15 IST

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SUMMARY

When submitting their ITR-2, many taxpayers commit these errors that may delay their tax refund credit or trigger an income tax notice. And even experienced tax and investment experts have ended up making these mistakes while filing their return.

8 ITR-2 filing mistakes

When submitting their ITR-2, many taxpayers commit frequent errors that may cause notices or postpone refunds. | Image: Shutterstock

ITR-2 is the go-to return form for salaried individuals, non-resident individuals (NRIs), and high-net-worth taxpayers who have numerous sources of income, such as dividend earnings, foreign income, or capital gains.

A number of common mistakes are made by taxpayers while submitting their Income Tax Return Form 2.

These mistakes are ranging from failing to record foreign assets to wrong capital gains reporting to underreporting earnings from mutual funds.

When submitting their ITR-2, many taxpayers commit these errors that may delay their tax refund credit or trigger an income tax notice.

And even experienced tax and investment experts have ended up making these mistakes while filing their return.

Most common mistakes in ITR-2

Wrong capital gains reporting: ITR-2 is where most often the taxpayer goes wrong, particularly while reporting foreign assets or residential status or capital gains. "Misclassifying short-term and long-term gains or missing share-wise details in Schedule 112A," said Abhishek Soni, CEO & Co-founder of Tax2win.
Not reporting foreign assets: Resident taxpayers often skip disclosing overseas accounts or assets in Schedule FA, which is mandatory.

"In the last year, the Income Tax Department raised almost 15–20% of mismatches in the ITRs based on incorrect reporting of capital gains, many times from the sale of shares or properties," said Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt. Ltd.

Incorrect residential status: Another common error is incorrectly claiming residential status, especially for NRIs or returning Indians.

"Choosing the wrong status (‘resident’, ‘non-resident’, or ‘not ordinarily resident’) can lead to wrong tax calculations and missed forms like Form 67 for foreign tax credit," added Soni.

Skipping Schedule AL (Assets and Liabilities): Taxpayers must report immovable properties, vehicles, jewellery, bank balances, shares, etc.

"Taxpayers' failure to report foreign assets like overseas bank accounts or ESOPs is another bugbear with stern penalties," said Gaurav Singh Parmar, Associate Director, Fincorpit Consulting.

Mismatching dividend income and schedules: Taxpayers often forget to report it under “Income from Other Sources.
Mismatch in income and AIS/26AS: Underreporting or overreporting due to misreading 26AS or AIS. Taxpayers must download both Form 26AS and AIS from the income tax portal to avoid any mismatch.
Incorrect reporting of carry-forward losses: Failing to fill Schedule CFL (Carry Forward of Losses) or Schedule BFLA (Set off of Losses). Taxpayers must file return before due date to carry forward capital losses.
Address change: “If you have changed your job or moved from one city to another- for instance Delhi to Mumbai, do not forget to update your address and employer details correctly in the return," said Mumbai-based investment and tax expert Balwant Jain
“Capital gains need careful classification, and mutual fund transactions should be verified by requesting detailed statements. Cross-check everything with the AIS (Annual Information Statement) to avoid mismatches,” added Jain.
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About The Author

sangeeta-ojha.webp
Sangeeta Ojha is a business and finance journalist with over 18 years of experience across leading media platforms, including Mint and India Today. Passionate about personal finance, she has built a reputation for covering a wide range of PF topics—from income tax and mutual funds to insurance, savings, and investing.

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