For the assessment year 2025-2026, taxpayers using ITR-2 must understand eligibility and new reporting requirements, including capital gains calculations and asset disclosures. Individuals and HUFs with income exceeding Rs 50 lakh, or those with specific income sources like capital gains or foreign assets, may need to file ITR-2.Taxpayers must select the appropriate Income Tax Return (ITR) form according to their financial profile and sources of income once the ITR filing season begins for Assessment Year (AY) 2025-2026. When a person or Hindu Undivided Family (HUF) receives money from sources other than their business or profession, they use the ITR-2 return form. But not all are eligible to file ITR 2. ET Wealth Online has outlined who can and cannot file an ITR-2 in this post, along with a comprehensive list of all the documents required to file ITR-2.
This year ITR-2 will include the option to report capital gains incurred on transactions before/after July 23, 2024. This is because the new rules for calculating capital gains kicked in from July 23, 2024. The form also allows taxpayers to claim capital loss on share buybacks starting from October 1, 2024.
Which ITR form applies to your income for ITR filing FY 2024-25 (AY 2025-26) ITR-1, ITR-2, ITR-3 or ITR-4?
The Income Tax Department has also provided relief to taxpayers filing ITRs for FY 2024-25 by raising the income limit to Rs 1 crore for reporting assets and liabilities in their ITR. Earlier, taxpayers with income above Rs 50 lakh were required to report their assets and liabilities in their ITR.
Individuals who fulfil any one or more of the following eligibility criteria have to file their tax returns using ITR-2:
a) Individuals having any one of these residential status for income tax purposes: Resident but ordinarily resident (ROR), Resident but not ordinarily resident (RNOR) and Non-Resident
ITR filing 2025: Who can file ITR-1, who cannot file it for FY 2024-25 (AY 2025-26)?
b) Hindu Undivided Family
c) Total taxable income in FY 2024-25 (AY 2025-26) exceeds Rs 50 lakh
d) Income from any source except profits and gains from business or profession i.e., income from the following sources is permissible for the purpose of using ITR- 2 – salaries, more than one house property, income from other sources such as interest income, dividend, capital gains (Short term and long term) such as sale of unlisted equity shares, gains from listed equity shares and equity mutual fund units exceeding Rs 1.25 lakh, house, debt mutual funds, other assets etc.
e) Taxpayer being a director in a company
f) Taxpayer holding unlisted equity shares
g) Taxpayer having income from sources outside India, such as interest, dividend, rent, capital gains and/ or holding foreign assets such as foreign shares, immovable property, bank accounts, etc
h) Income from the sale/transfer of Virtual Digital Assets (VDAs) such as cryptocurrency, NFTs, etc.
ITR-2 cannot be filed by any individual or HUF, whose total income for the year includes income from profit and gains from business or profession, and also who has income in the nature of:
Below are the documents required to file ITR-2, according to the Income Tax website.
