Filing ITR-2 for AY 2025-26? Key Changes to Note in the Excel Utility
Planning to file your Income Tax Return (ITR-2) for Assessment Year 2025-26 (Financial Year 2024-25)? The Income Tax Department’s e-filing portal now allows you to download the Excel utility for this form. However, before you dive in, it’s crucial to be aware of several significant updates and new disclosures in the ITR-2 Excel utility.
These changes have been introduced to align with recent amendments in tax laws, particularly those from the Finance Act 2024, aiming for greater accuracy and transparency in your tax filings.
Here’s what’s new for ITR-2, AY 2025-26:
1. Capital Loss on Share Buyback Reporting: Under Schedule CG–A(A), you can now explicitly report capital losses incurred from payments made by a company to its shareholders for the buyback of its own shares. These losses are now claimable, provided any related dividend income from such buybacks is also disclosed under ‘Income from Other Sources’.
2. Disclosure of Dividend Income from Share Buybacks (Section 2(22)(f)): A dedicated new row has been added in ITR-2 for you to disclose any dividend income received under Section 2(22)(f). This specifically covers proceeds received by a shareholder from the company’s buyback of its shares, which are deemed as dividends for tax purposes.
3. Separate Reporting for Property Transfers (Pre/Post July 23, 2024): For transfers of land and buildings, you are now required to report the cost of acquisition and cost of improvement separately based on whether the transfer occurred before or on or after July 23, 2024. This detailed disclosure is essential for correctly claiming indexation benefits, if applicable, in light of the new tax provisions.
4. Revised Asset and Liability Disclosure Threshold: The mandatory reporting threshold for assets and liabilities in ITR-2 has been significantly increased. You now only need to disclose your assets and liabilities if your total income exceeds ₹1 crore, up from the previous limit of ₹50 lakh.
5. Dedicated Capital Gains Tax Columns: To accommodate the changes introduced by the Finance Act 2024, ITR-2 now features separate columns for disclosing capital gains from transactions executed before July 23, 2024, and those executed on or after July 23, 2024.
6. Enhanced TDS Schedule: The updated TDS schedule in ITR-2 for AY 2025-26 includes a new column where you must specify the exact Section under which tax has been deducted at source. This aims to improve the precision of TDS reporting.
These modifications by the Income Tax Department are designed to streamline the filing process and enable more detailed and accurate disclosures, helping taxpayers avoid future tax-related complications. Be sure to familiarize yourself with these updates before preparing your ITR-2.