How to File ITR-2 for AY 2025–26: Ultimate Guide

If you earn from capital gains—whether from shares, mutual funds, property, or cryptocurrency—or have income from multiple properties or foreign assets, ITR-2 is your form for AY 2025–26. This detailed guide covers every step: selecting the regime, gathering documents, reporting income, claiming exemptions, and verifying your return. Plus, you get 31 detailed pointers to ensure accuracy and compliance.

Who Should File ITR-2?

• Individuals & HUFs with capital gains (shares, mutual funds, property, crypto).
• More than one house property.
• Annual income > ₹50 lakh or foreign assets/income.
• Agricultural income > ₹5,000.
• Income from lotteries, gambling, horse races.
• Resident, Non-Resident, or RNOR.

Step-by-Step Filing Process

1. Visit the Income Tax e-Filing portal (incometax.gov.in).
2. Login with PAN, password, and OTP.
3. Navigate: e-File > Income Tax Return.
4. Select AY 2025–26 & Form ITR-2.
5. Choose Online or JSON upload mode.
6. Verify pre-filled personal details (PAN, Aadhaar, email).
7. Select tax regime (Old vs New).
8. Enter income: Salary, House Property, Other Sources.
9. Report Capital Gains in Schedule CG/ST/VDA.
10. Claim deductions/exemptions in relevant schedules.
11. Compute tax & pay self-assessment (if any).
12. Validate & resolve errors.
13. Submit & e-Verify via Aadhaar OTP/Netbanking/DSC.

Tax Regime Comparison

Capital Gains Overview

Share & Mutual Fund

• STCG (Equity): 15% if held <12 months.
• LTCG (Equity): 10% on gains >₹1L if held >12 months.

Property

• STCG: Held <24 months, taxed per slab.
• LTCG: Held ≥24 months, taxed @20% with indexation.

31 Key Pointers Explained

1. Choose correct ITR form – for capital gains, it must be ITR-2.
   ITR-1 can’t capture capital gains. Using ITR-2 ensures correct schedules are used.
2. Ensure all PAN details are updated with Aadhaar before filing.
   Correct linking avoids processing delays or rejections.
3. Capital gains from mutual funds, stocks, and crypto must be reported properly.
   Record each sale’s date, cost, and sale value for accurate tax calculations.
4. Report both STCG and LTCG separately.
   Different tax rates apply, so separate reporting is mandatory.
5. Use appropriate schedule for equity, property, or crypto.
   Schedules ST, LTCG, CG, and VDA organize your entries correctly.
6. Disclose ISIN codes for equity transactions.
   ISIN ensures correct matching with exchange records.
7. Use broker statements and Form 26AS for validation.
   Reconcile reported TDS and transactions to avoid notices.
8. Download AIS and match all details.
   AIS includes high-value transactions reported by third parties.
9. Use indexation benefit only where allowed.
   Indexation reduces taxable gains for debt funds and property held long-term.
10. Crypto gains taxed at 30% – no deductions except cost.
    Section 115BBH mandates a flat 30% rate with no deductions beyond cost.
11. Loss from crypto can’t be set off against other income.
    Crypto losses can only offset crypto gains in the same year.
12. Report ISIN-wise details for listed shares sold.
    Detailed entry reduces mismatches with exchange data.
13. Cross-check with AIS and Form 26AS before submission.
    Final reconciliation prevents errors and notices.
14. Declare foreign shares under Schedule FA.
    Mandatory for global assets to comply with Black Money Act.
15. Report dividends > ₹5,000 subject to TDS.
    Even exempt dividends must be declared for reconciliation.
16. Select ITR-2 if you have any capital gains or crypto income.
    ITR-1 doesn’t support these schedules.
17. New regime disallows most deductions (80C, 80D, HRA).
    Opt only if deductions are minimal.
18. Old regime offers deductions – plan if you have investments & loans.
    Investments in PPF, ELSS, and home loan interest reduce taxable income.
19. Verify exact acquisition & sale dates from brokers.
    Holding period impacts ST/LT classification.
20. Inherited property uses predecessor’s cost & date.
    Accurate indexed cost ensures correct tax.
21. Report interest income under “Other Income.”
    Includes bank interest, FD interest, and refund interest.
22. Carry forward unadjusted capital losses (up to 8 years).
    File before due date to enable carry forward.
23. Declare exempt income (PPF, LIC, agricultural).
    Mandatory for completeness even if tax-exempt.
24. F&O income must use ITR-3 – not ITR-2.
    Derivatives treated as business income.
25. Report foreign dividend income – claim DTAA credit.
    Prevents double taxation and claims relief.
26. For Section 54F, own only one house at transfer.
    Ensures eligibility for full exemption.
27. Invest in REC/NHAI bonds within 6 months for 54EC.
    Max ₹50 lakh investment to claim exemption.
28. Declare rental income under “House Property.”
    Even self-occupied properties must be declared.
29. Use correct CII (FY 2024–25 = 363) for indexation.
    Accurate CII ensures correct indexed cost.
30. Check Section 10 exemptions under old regime.
    Includes allowances and exempt incomes.
31. File by 15 Sep 2025 to avoid late fee.
    Late fee under Section 234F applies after due date.
32. Verify via Aadhaar OTP or netbanking within 30 days.
    Completes e-filing process.
33. Use JSON/Excel utility to expedite data entry.
    Reduces manual errors for bulk transactions.
34. Keep proof ready for exemptions (deeds, bonds).
    Essential in case of department query.
35. Different tax rates: Equity LTCG 10%; debt/property LTCG 20%; STCG 15%/marginal rate.
    Classify asset types accurately.
36. Schedule VDA supports crypto entries in ITR-2.
    Provides dedicated fields for digital assets.

Final Review & Submission

• Compute tax, pay via Challan 280 if required.
• Validate all sections; fix any errors highlighted.
• Submit return and download ITR-V.
• Verify via Aadhaar OTP/NetBanking/DSC within 30 days.
• Keep all documents for 6 years for audit/assessment.

FAQs

Q1. Can I file ITR-2 if I only have crypto income?

Yes. Crypto requires reporting in ITR-2 under Schedule VDA; ITR-1 lacks this schedule.

Q2. What happens if I miss reporting a transaction?

You can file a revised return before 31 Dec 2025 to correct omissions.

Q3. How do I claim Section 54EC exemption?

Invest LTCG up to ₹50L in REC/NHAI bonds within 6 months and report under Schedule CG.

This article ensures a smooth, error-free ITR-2 filing process for AY 2025–26. For more tax tips, calculators, and expert guidance, visit cmaknowledge.in.