Capital Gains Disclosure Rules in ITR-2 for FY 2024-25
- Dipali Waghmode
- 2 days ago
- 8 min read
Capital gains reporting in ITR-2 for FY 2024-25 involves detailed disclosure of every asset sold, including shares, mutual funds, bonds, property, or any other capital asset. The Income Tax Department now requires separate reporting of gains earned before and after 23 July 2024 because the Finance Act 2024 introduced revised rules, making accuracy more critical than ever. Each transaction must be captured with cost, sale consideration, ISIN (where applicable), holding period, and exemption details. The updated form also includes new requirements for TDSsection reporting and a higher threshold for asset-liability disclosure, increasing the need for precise filing.
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Capital Gains Disclosure Rules in ITR-2 for FY 2024-25
Capital gains must be disclosed under Schedule Capital Gains by reporting short-term and long-term gains separately, with mandatory segregation of transactions before and after 23 July 2024 to reflect updated tax provisions. Each asset requires details such as ISIN, date of acquisition, date of transfer, cost, sale value, and tax-exemption claims under sections like 54, 54EC, or 54F. These disclosures allow the Income Tax Department to cross-verify data with brokers, mutual funds, and TDS entries, ensuring accurate capital gains computation in the updated ITR-2 form.
Who Should File ITR-2 for Capital Gains Income?
ITR-2 applies to individuals and HUFs who earn capital gains from equity shares, mutual funds, property, gold, bonds, or other capital assets. It is also meant for taxpayers with income from more than one house property, foreign assets, or capital gains not eligible for ITR-1. Individuals who do not have income from a business or profession must also use this form when reporting capital gains. For FY 2024-25, this return becomes essential for anyone whose investments or asset sales create taxable or exempt gains that must be reported in detail.
Key Changes in ITR-2 for FY 2024-25
ITR-2 for FY 2024-25 introduces multiple compliance updates aligned with the Finance Act 2024. Gains before and after 23 July 2024 must be reported separately due to slab changes and revised provisions. The threshold for asset and liability disclosure in Schedule AL now applies only to taxpayers with income above ₹1 crore, replacing the earlier ₹50 lakh criterion. Schedule TDS requires mentioning the exact section under which TDS was deducted, improving transparency and reducing mismatches during processing.
Understanding Schedule Capital Gains in ITR-2
Schedule Capital Gains is structured to capture every asset category—equity, debt, property, unlisted shares, and others—allowing taxpayers to report short-term and long-term gains separately. Each asset type demands details such as acquisition date, transfer date, cost, sale consideration, fair market value if applicable, and deductions claimed. The form includes dedicated fields to report transactions before and after 23 July 2024, ensuring compliance with updated capital gains rules. This granular reporting helps prevent mismatches with data from AIS, broker statements, and Form 26AS.
Mandatory Documents Required for Capital Gains Disclosure
Accurate reporting requires transaction records from brokers, DP statements, mutual fund consolidated account statements, and property sale and purchase deeds. Taxpayers need cost of acquisition documents, capital gain computation sheets, ISIN details for listed securities, and exemption proofs for deductions under Sections 54, 54F, or 54EC. TDS certificates and challans must also be kept ready for matching with Schedule TDS. These documents ensure proper reporting and support verification during assessment or processing.
How to Fill Schedule Capital Gains in ITR-2
The schedule for Capital Gains begins with selecting the correct asset category and entering the details of each transaction. Short-term and long-term categories must be completed separately, followed by inputting cost, sale value, and dates. Exemptions under relevant sections should be disclosed under the “Exemptions” section, and TDS must be entered with the correct section references. Taxpayers must ensure that pre–23 July and post–23 July transactions are placed in their respective fields. Once completed, calculations must be validated with the form’s auto-compute logic to prevent inconsistencies.
Importance of Correct Bank Account Details in ITR-2
Accurate bank account details in ITR-2 play a critical role in ensuring smooth communication and timely financial transactions with the Income Tax Department. The bank account selected for refunds must match the PAN-validated details registered on the income tax portal; otherwise, the processing system may flag the discrepancy. When the account number, IFSC code, or account type is entered incorrectly, the refund cannot be credited, resulting in delays that often take weeks to resolve. Incorrect details can also affect how CPC sends acknowledgements, notices, or verification messages, since the system relies on the validated account to authenticate the taxpayer.
A common issue occurs when taxpayers update their bank accounts but forget to revalidate them on the portal. In such cases, even if the return contains correct details, the backend systems reject the refund request due to a lack of validation. Another problem arises when multiple accounts are listed, but the wrong one is marked for refunds, especially if it is no longer active. To avoid these situations, the bank account must be pre-validated and linked to PAN before filing the return, and the chosen account must be active at the time of processing. Verifying that the account supports electronic refund credits through NEFT or ECS further reduces the chance of failed transactions.
For taxpayers reporting capital gains, the importance becomes even more pronounced because these returns often involve large refund amounts or tax adjustments. Ensuring accuracy in bank details avoids interruptions in refund payouts, prevents unnecessary communication with CPC, and contributes to faster closure of the return cycle.
How TaxBuddy Helps in Accurate Capital Gains Filing
TaxBuddy simplifies capital gains reporting by automatically organising broker statements, computing short-term and long-term gains, identifying exemption eligibility, and detecting errors in disclosure. Its platform ensures that transactions before and after 23 July 2024 are categorised correctly and reconciled with AIS and 26AS. By assisting with documentation, exemption claims, TDS validations, and precise reporting, the service helps taxpayers avoid notices and file ITR-2 correctly using updated rules for FY 2024-25.
Conclusion
Capital gains disclosure in ITR-2 for FY 2024-25 demands accuracy, proper categorisation, and compliance with the updated rules introduced after 23 July 2024. Clear documentation, correct TDS reporting, and precise asset-wise details ensure seamless processing and reduce the likelihood of scrutiny. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? TaxBuddy provides both options so taxpayers can choose the filing method that suits their needs. The self-filing system is designed for individuals who prefer handling their return independently but still want the comfort of automated error checks, pre-filled data, and updated tax rules. Those dealing with capital gains, property transactions, foreign assets, or complex disclosures can select the expert-assisted plan, where tax professionals review and prepare the return to ensure accuracy and compliance. This dual-model approach helps reduce errors, manage complexities, and ensure a smooth filing experience for every type of taxpayer.
Q. Which is the best site to file ITR? The best platform for filing ITR is one that combines automation, accuracy, and updated tax logic. Sites that support AIS/TIS imports, capital gains computation, schedule-wise validation, and expert assistance generally deliver the highest reliability. TaxBuddy stands out due to its AI-driven error detection, instant mismatch alerts, and guided filing for salaried individuals, investors, freelancers, and NRIs. Its platform aligns with the latest Income Tax Department rules, ensuring both accuracy and ease during the filing process.
Q. Where to file an income tax return? Income tax returns can be filed directly on the official Income Tax Portal or through authorised e-filing platforms that offer easier workflows and automated validation tools. Many taxpayers prefer platforms like TaxBuddy because they simplify calculations, prepare schedules automatically, and reduce the chances of errors that might lead to notices. These platforms also assist with uploading documents, generating capital gains summaries, and validating TDS entries before submission.
Q. How should capital gains be separately disclosed in ITR-2 for FY 2024-25 after July 23, 2024? Capital gains must be reported in two distinct parts because the Finance Act 2024 revised the taxation rules effective from 23 July 2024. Any transfer of assets such as shares, mutual funds, bonds, or property must be split accordingly—transactions completed before the date follow the earlier provisions, while those completed afterwards fall under the updated regime. Schedule Capital Gains in ITR-2 contains dedicated fields for both periods, ensuring correct application of tax rates, indexation rules, and exemption eligibility.
Q. What documents are necessary for reporting capital gains accurately in ITR-2? Taxpayers must gather broker contract notes, DP statements, mutual fund consolidated statements, and quarterly capital gain reports to ensure accurate disclosure. For property transactions, the sale deed, purchase documents, payment proofs, stamp duty receipts, and improvement cost invoices are essential. In addition, documents supporting exemption claims under Sections 54, 54F, or 54EC—such as construction receipts or REC/NHAI bond certificates—must be attached. TDS certificates under relevant sections should also be tallied with Form 26AS and AIS for accuracy.
Q. What is the importance of correct bank account details in ITR-2 filing related to capital gains? Correct bank account details ensure that refunds are credited without delays, and communication from CPC reaches the correct channel. If the account number, IFSC code, or account type is incorrect, refund processing may fail or be significantly delayed. Since capital gains often result in substantial tax credits or refund claims, ensuring that the bank account is pre-validated and correctly linked with the PAN on the e-filing portal is crucial for smooth processing.
Q. Who is eligible to file ITR-2 for capital gains income? ITR-2 is applicable to individuals and HUFs who earn income from capital gains and do not have business or professional income. It is also used by taxpayers who own more than one house property, earn foreign income, or hold foreign assets. Investors in listed shares, mutual funds, gold ETFs, debentures, real estate, or unlisted shares must file ITR-2 if such investments generate any taxable or exempt capital gains during the year.
Q. How does TaxBuddy help in calculating and filing capital gains in ITR-2 efficiently? TaxBuddy automates capital gains computation by importing broker statements, categorising STCG and LTCG correctly, and applying the updated slab rules applicable before and after 23 July 2024. It reconciles AIS and 26AS data with actual transactions, identifies discrepancies, and highlights missing entries. The platform also assists in determining exemption eligibility under sections like 54, 54F, and 54EC, and ensures each schedule aligns with Income Tax Department instructions. This reduces manual errors and streamlines the entire filing process.
Q. How to report capital gains for shares and mutual funds in Schedule Capital Gains? Each transaction must be reported separately with ISIN codes, date of purchase, date of sale, cost of acquisition, sale consideration, and the holding period. The system then classifies gains into STCG or LTCG based on the holding period and asset type. For equity and equity-oriented mutual funds, STCG under Section 111A and LTCG under Section 112A must be disclosed in their respective fields. Similar category-specific reporting applies to debt funds, bonds, ETFs, and other securities.
Q. Are exemptions under Sections 54, 54F, and 54EC allowed in ITR-2? Yes. Exemptions for residential reinvestment or notified bonds can be claimed in ITR-2, provided the taxpayer meets all eligibility conditions. Section 54 applies to gains from the sale of residential property reinvested in another home, Section 54F applies when gains from other assets are invested in a residential house, and Section 54EC applies when gains are invested in specified bonds within six months. Supporting proofs, such as investment receipts or allotment letters, must be maintained.
Q. What happens if capital gains are not reported correctly in ITR-2? Incorrect or incomplete reporting may trigger defect notices under Section 139(9), discrepancies under CPC processing, or reassessment notices under Sections 143(2) or 147. Mismatches between AIS data and Schedule Capital Gains often lead to additional tax demands, interest liability, or blocked refunds. Accurate disclosure is therefore essential to avoid penalty exposure and maintain compliance with the revised rules.
Q. Can errors in capital gains disclosure be corrected through a revised return?
Yes. Any mistake in reporting capital gains can be corrected by filing a revised return within the deadline prescribed under Section 139(5). The revised return completely replaces the original filing and allows correction of incorrect entries, missing transactions, exemption claims, or TDS mismatches. It offers a reliable way to ensure accurate compliance before CPC completes processing.
