The Central Board of Direct Taxes (CBDT), through Notification No. 43/2025 dated May 5, 2025, has officially released the updated Income Tax Return Form ITR-2 for the Assessment Year (AY) 2025–26. This revised form incorporates several important updates and expanded disclosure requirements for individual taxpayers and Hindu Undivided Families (HUFs).
ITR-2 is applicable to individuals and HUFs whose total income does not include income from profits and gains of business or profession. Specifically, ITR-2 can be filed by those who:
Are not eligible to file ITR-1 (Sahaj).
Do not earn income under the head “Profits and Gains from Business or Profession”.
Do not receive income in the nature of interest, salary, bonus, commission, or remuneration from a partnership firm.
Have clubbed income (such as from a spouse or minor child), provided such clubbed income also does not fall under the above business-related categories.
Any individual or HUF whose total income includes profits and gains from business or profession, or income received from a partnership firm, cannot file ITR-2.
The revised ITR-2 form reflects important changes in line with amendments made through the Finance Act, 2024. Here are the notable updates:
In Schedule-Capital Gains, taxpayers are now required to separately report gains accrued before and after July 23, 2024, aligning with recent legislative changes.
The revised form mandates reporting of the relevant TDS section code in Schedule-TDS to improve clarity in tax credit claims.
Individuals with total income exceeding ₹1 crore are now required to disclose their assets and liabilities, providing a more comprehensive view of their financial position.
Gains arising from the transfer of unlisted bonds and debentures must now be reported as either short-term or long-term capital gains, based on the date of acquisition and transfer.
Effective from October 1, 2024, buy-back proceeds are to be reported as deemed dividend income under the head “Income from Other Sources”.
To claim deductions under Sections 80DD and 80U, it is now mandatory to report valid disability certificates.
There are enhanced disclosure requirements for claiming deductions under:
Section 80C (e.g., LIC, PPF, ELSS),
Section 10(13A) (House Rent Allowance), and
Other relevant provisions.
Capital losses incurred on buy-back of shares can now be adjusted, provided the deemed dividend portion is correctly reported as income. This applies to buy-back transactions post-October 2024.
The revised ITR-2 form reflects the government’s continued push for greater transparency, accurate reporting, and comprehensive income disclosure. Taxpayers who fall under the eligible category should carefully review these changes and ensure timely and accurate filing for AY 2025–26.
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