Six changes in ITR-2 Excel Utility that all taxpayers should know before ITR filing for AY 2025-26
Jul 16, 2025
Synopsis
The Income Tax Department released the Excel utilities for ITR forms. The ITR-2 excel utility has six changes for the assessment year 2025-26. The ITR-2 form now requires new reporting for share buybacks and dividend income. There are also changes to real estate transfer reporting and asset liability thresholds. Read below to know more about changes in ITR-2 filing.
The income tax department has released the Excel based utilities of most of the income tax return (ITR) forms like ITR-1, ITR-2, ITR-3, and others. However, this year (AY 2025-26), there are six significant changes in the reporting requirements for ITR-2. This form is applicable to those taxpayers who earn a salary or have non-business or professional income, as well as those with crypto, capital gains, and other types of income.
Keep reading to learn more about the six changes in the reporting process for the ITR-2 form.
What are the changes in the reporting process for ITR-2?
The Excel-based income tax return (ITR) utilities for ITR-2 and ITR-3 were released on July 11, 2025. Here, we have listed the changes in the reporting process for ITR-2 Excel utility. The online utility (e-filing ITR portal) is yet to be notified.
Chartered Accountant Suresh Surana explains the six prominent changes in reporting mechanism in ITR-2 excel utility:
Reporting of Capital Loss on Share Buyback: A new row has been added to Schedule CG – A(A) to enable the reporting of capital losses arising from payments made by a company to its shareholders for the buyback of its own shares, in accordance with Section 68 of the Companies Act, 2013. Consequently, such capital losses are now permitted, provided the corresponding dividend income is disclosed under ‘Income from Other Sources’.
Disclosure of Dividend Income Under Section 2(22)(f): A new row has been added in Form ITR-2 to specifically capture dividend income arising under Section 2(22)(f), i.e., proceeds received by shareholders from the buyback of shares.
Bifurcation of Acquisition and Improvement Costs for Real Estate Transfers: In the ITR-2 Form, resident individuals will now need to provide separate details for the cost of acquisition and cost of improvement in respect of transfers of land and buildings executed before and after 23rd July 2024 and on or after it. This change facilitates the application of indexation benefits for such transactions.
Enhanced Asset and Liability reporting threshold: Taxpayers whose total income exceeds Rs 1 crore are now required to report all assets and liabilities as on the last day of the financial year. Previously, this applied to individuals whose income exceeded Rs 50 lakh.
Introduction of separate columns for capital gains reporting based on date of realization: Due to the recent changes brought about by the Finance Act 2024, effective from July 23, 2024, capital gains tax rates have changed. To help with accurate reporting and compliance, separate columns have been added to distinguish between capital gains made before and on or after July 23, 2024. This distinction is important because gains from transactions executed before this date will still be taxed at the old rates, while gains realized on or after this date will follow the revised tax rates.
TDS Schedule Update: A new column has been added to Schedule TDS in Form ITR-2 for specifying the relevant Section code under which tax has been deducted at source for the assessee.
Sonu Iyer, Partner and National Leader, People Advisory Services- tax, EY India, explains: "The Income Tax Department has released updated validation rules alongside Excel utilities for ITR-2 and ITR-3 for the Financial Year 2024-25. These validation rules can help in identifying data inconsistencies or errors in tax return leading to Category A defects, which prevent the tax return from being uploaded on to the Income-tax portal, or Category D defects, which allow taxpayer to submit the tax return but could lead to disallowance of some exemptions/ deductions that the taxpayer may have claimed in the tax return."
Iyer adds that for the current financial year, the Income Tax Department has introduced 724 Category A rules, up from 584 in last year, and 23 Category D rules, up from 13 last year, for ITR-2. Validation rules have also been released for ITR-1, ITR-3, and ITR-4.
Iyer from EY India says: "These validation rules have been updated to reflect technical changes such as changes related to capital gains taxation and tax return forms related changes such as asset and liabilities reporting in case of taxable income exceeding INR 1 Crore. Taxpayers encountering errors are advised to refer to the validation rules for resolving issues."
Chartered Accountant Ashish Niraj, Partner, A S N & Company says: "Now, various details are required for claiming Interest on loan on House Property in the old regime in ITR 2. Previously, in the old ITR 2, only the amount was required. Similarly, various details are required for HRA now. Previously, only the amount was asked for. In Capital Gains, as rates have changed post July 23, 2024 there are two different columns. Various Details required for claiming Interest on loan on House Property in the old regime in ITR 2. Before this, under the old ITR 2, only amount was needed."
Chartered Accountant Gaurav Aggarwal, Key Managerial Person (KMP), Taxcare platform, says: The Income Tax Department has introduced several important updates in the ITR-2 utility for AY 2025–26. Some of these changes are:
Schedule 80C – mandatory documentation
Taxpayers must now provide amount eligible for deduction under Section 80C. Similarly policy number or Document Identification Number (DIN) must be mentioned. This ensures that claims under 80C are substantiated with traceable proof.
Schedule HP – disclosure for interest deduction u/s 24(b)
To claim interest on home loan (u/s 24(b)), one must now enter details of the loan taken in Table 24(b).
This includes lender details and loan details like Loan Account number, Sanction Date, Sanctioned Amount etc.
Schedule OS – dividend disclosure for buy-back claims
If a taxpayer claims buy-back loss in Schedule CG, the corresponding dividend details must be filled in Schedule OS →Sl. No. 1a(iii).
[The Economic Times]
