The Income Tax Return (ITR) Form 2 is an important form for individuals and Hindu Undivided Families (HUFs) who do not have income from profits and gains of business or profession. On May 3, 2025, the Central Board of Direct Taxes (CBDT) notified the ITR-2 form for the Assessment Year (AY) 2025-26 or Financial Year (FY) 2024-25. Besides others, this form is typically used by salaried individuals whose total income exceeds ₹50 lakh, as well as by those earning income from sources such as capital gains, more than one house property, or foreign assets.

Deepak Kumar Jain, Founder and CEO of TaxManager.in, said, "In AY 2024-25, around 1.10 crore ITR-2 forms were filed by the due date of July 31, representing approximately 15% of the total ITRs filed. For comparison, during AY 2023-24, a total of 81.12 lakh (approximately 12% of the total) ITR were filed using ITR-2 for the Assessment Year (AY) 2023–24. To put this into further perspective, about 4.5 lakh salaried taxpayers reported income above ₹50 lakh in AY 2023-24, making ITR-2 the applicable return form for all such individuals."

Key changes in ITR 2 for FY 2025-26

Taxpayers with long-term capital gains (LTCG) up to ₹1.25 lakh from listed equity shares or mutual funds under Section 112A can now opt for ITR-1 or ITR-4, provided other eligibility criteria are met. Earlier, taxpayers were required to report long-term capital gains in ITR 2.

Common mistakes committed by Taxpayers while filing ITR-2

"Taxpayers often ignore or skip disclosing Income from Foreign Transactions or Ownership of Foreign assets, including foreign bank accounts, in Schedule FA can lead to notices from the Department of Income Tax. Another mistake taxpayers often make is ignoring reporting income from interest or minors’ income from various sources, which leads to notices and penalties from the Department of Income Tax," said Jain.

As the tax filing timeline approaches, choosing the correct ITR form and reporting income accurately becomes crucial, especially for individuals with complex financial profiles. With the latest updates to ITR-2, high-income earners and those with capital gains or foreign assets should take extra care to avoid common mistakes that could lead to scrutiny or penalties. If in doubt, consulting a tax expert is always a good step to ensure a hassle-free filing experience.