Rental and Capital Gains Income Tax Filing in 2025: Assisted Filing Guide
- Rashmita Choudhary
- Sep 18
- 9 min read
Filing Income Tax Returns (ITR)for taxpayers with multiple sources of income, such as capital gains and rental income, can be challenging. For the Financial Year 2024–25 (Assessment Year 2025–26), the Income Tax Department has introduced updated ITR forms and system utilities, making accurate reporting essential. Both salaried individuals and professionals earning income from property or investments must ensure compliance with revised rules, claim eligible deductions, and accurately report their taxable income. Errors or omissions can lead to notices, delayed refunds, or additional scrutiny. Let's provide a comprehensive guide to filing ITR for individuals earning from capital gains and rental income, highlighting the benefits of expert-assisted filing platforms, including TaxBuddy, to ensure seamless, accurate, and timely returns.
Table of Contents
Why Assisted Filing is Essential in 2025
The complexity of tax filing has increased in 2025 due to changes in ITR forms, mandatory reporting of TDS and capital gains, and stricter compliance requirements. Assisted filing ensures that all income is reported correctly, deductions are maximized, and errors are minimized. Professionals can help reconcile TDS, validate documents, and optimize tax liabilities under old or new regimes. Platforms like TaxBuddy offer step-by-step guidance, real-time support, and AI-driven checks to prevent mismatches, ensuring faster refund processing and reduced chances of scrutiny.
Understanding Capital Gains Income
Capital gains arise from the sale of capital assets such as property, stocks, mutual funds, or gold. They are classified into short-term and long-term gains depending on the holding period. Short-term capital gains (STCG) on equity shares or mutual funds held for less than one year are taxed at 15%, while STCG on other assets is taxed as per the individual’s slab rate. Long-term capital gains (LTCG) exceeding ₹1 lakh from equity or mutual funds are taxed at 10% without indexation, whereas for other assets, LTCG is taxed at 20% with indexation benefits. Accurately reporting these gains and adjusting for exemptions like Section 54 or 54F is crucial to avoid discrepancies and delayed refunds.
Understanding Rental Income
Rental income includes earnings from letting out residential or commercial property. It is considered income from house property and taxed under Section 22. Taxable income is calculated by deducting standard deductions, municipal taxes, and interest on home loans from gross rental receipts. Accurate computation is essential as incorrect reporting can attract notices. Rental income may also impact the eligibility for certain deductions under both the old and new tax regimes.
Is Capital Gains Exemption Allowed in New Tax Regime?
Under the new tax regime, most exemptions for capital gains, such as those under Sections 54, 54EC, and 54F, are not available. Taxpayers opting for the new regime must pay taxes on capital gains without claiming these deductions. Understanding this restriction is crucial for planning the timing of asset sales and evaluating tax liabilities before filing.
How Rental Income Works in the Old Tax Regime
The old tax regime allows taxpayers to claim several deductions on rental income, such as a 30% standard deduction on annual rental income, interest on loans for the rented property, and municipal taxes paid. This reduces the taxable portion of rental income significantly. Taxpayers with rental income must maintain proper documentation to support these deductions, ensuring compliance and minimizing tax liability.
Key Deductions and Exemptions for Dual Income
For individuals with both capital gains and rental income, careful planning is essential. While capital gains exemptions are limited under the new regime, deductions for rental income, home loan interest, and municipal taxes remain under the old regime. Additionally, investments under Section 80C, 80D, and 80E may still reduce overall taxable income. Expert guidance ensures that all eligible deductions are claimed, maximizing tax efficiency and minimizing the risk of errors.
Choosing the Right ITR Form for Rental + Capital Gains
Selecting the correct ITR form is critical. For individuals with capital gains and rental income, ITR 2 is generally appropriate, as it covers income from salary, house property, capital gains, and other sources except business or professional income. Filing the wrong ITR form can result in notice issuance or rejection of the return. Platforms like TaxBuddy assist in automatically suggesting the appropriate form based on declared income, reducing errors and delays.
Step-by-Step Assisted Filing Process
Filing your Income Tax Return (ITR) through an assisted platform ensures accuracy, reduces errors, and simplifies a process that can otherwise be complex. Here is a detailed breakdown of the step-by-step assisted filing process for taxpayers:
Gather all necessary documents: The first step is to collect all essential documents required for filing your ITR. This includes Form 16 provided by your employer, TDS certificates from banks or other deductors, property-related documents such as sale or purchase deeds, rent receipts if claiming HRA, and capital gains statements from the sale of securities or property. Having all these documents organized ensures that no income or deduction is missed, and helps in smooth data entry.
Verify TDS and capital gains entries in Form 26AS: Form 26AS is a consolidated statement of all tax deducted at source (TDS) and advance tax payments made against your PAN. It is crucial to cross-check these entries with your own records to ensure that all TDS credits are accurately reflected. Any discrepancies at this stage can delay processing of your return or refunds.
Upload relevant details into the chosen ITR form: Based on your sources of income, select the appropriate ITR form. For individuals with salary and capital gains income, ITR 2 is suitable. Using an assisted filing platform, you can upload the required details directly, including income, exemptions, deductions, and other relevant financial data.
Claim eligible deductions under old or new regime: Carefully review deductions available under both the old and new tax regimes. Enter deductions such as Section 80C investments, health insurance premiums under Section 80D, or interest on education loans under Section 80E. Assisted platforms can guide you to ensure maximum eligible deductions are claimed.
Validate computations and reconcile entries using automated checks: Assisted filing systems automatically validate all computations, check for inconsistencies, and reconcile entries with your Form 26AS and uploaded documents. This reduces errors that could trigger notices from the Income Tax Department or cause delays in refunds.
Submit the return electronically and e-verify: After final verification, submit the ITR electronically. E-verification can be done instantly using Aadhaar OTP, net banking, or other available verification methods. This step confirms the authenticity of your filing and initiates processing.
Track refund status post-filing for timely processing: Once the return is filed and verified, the platform allows you to monitor the status of any refunds due. Early tracking ensures that any discrepancies or delays can be addressed promptly.
Assisted filing platforms streamline every step of this process by providing real-time support, pre-filled data, automated calculations, and error-check mechanisms. This not only saves time but also increases confidence in accurate and timely filing.
Common Mistakes to Avoid While Filing
Common mistakes while filing Income Tax Returns (ITR) can lead to delays, penalties, and notices from the Income Tax Department. One of the frequent errors is incorrect reporting of capital gains or rental income. Taxpayers often miscalculate gains from the sale of property, shares, or mutual funds, or fail to include rental income from properties they own. These inaccuracies can result in mismatched tax calculations and may trigger scrutiny or notices from the department.
Another common issue is missing TDS entries or mismatched data in Form 26AS. Sometimes taxpayers overlook TDS deducted by employers, banks, or other parties, or fail to reconcile their Form 26AS with their own income records. This discrepancy can delay refund processing and may require additional clarifications.
Claiming exemptions that are not allowed under the chosen tax regime is also a common mistake. For instance, taxpayers may try to claim HRA, standard deductions, or other benefits in the new tax regime, where certain exemptions are restricted.
Filing the wrong ITR form is another frequent error. Each form caters to specific types of income and taxpayers, and using an incorrect form can result in rejection or notices.
Finally, skipping e-verification after filing the return is a critical mistake. Even if the return is submitted, failure to complete e-verification prevents processing and delays refunds.
Avoiding these mistakes ensures accurate compliance, timely processing of refunds, and minimizes the risk of notices or additional scrutiny from the Income Tax Department.
Platforms Offering Expert-Assisted Filing, Including TaxBuddy
Several platforms now provide expert-assisted filing for complex income scenarios. TaxBuddy is a prominent choice, offering AI-driven checks, guidance for both old and new tax regimes, and support for reporting rental income and capital gains accurately. Users can choose between self-filing with guided assistance or fully expert-assisted filing for a seamless experience, ensuring faster refund processing and reduced errors.
Conclusion
Accurate filing of ITR for individuals earning both capital gains and rental income requires attention to detail, understanding of exemptions, and careful documentation. Expert-assisted platforms like TaxBuddy simplify this process, providing guidance, automated checks, and support for filing under the correct regime. For anyone managing multiple income sources, using such a platform can ensure compliance, maximize eligible deductions, and prevent delays in refunds. For seamless filing and secure processing, it is recommended to leverage the TaxBuddy mobile app for a simplified, reliable, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? TaxBuddy provides both self-filing and expert-assisted plans. Self-filing allows taxpayers to complete their ITR at their own pace using a guided interface with pre-filled forms, making it suitable for straightforward income sources like salary or interest. The expert-assisted option connects taxpayers with qualified professionals who review filings, verify TDS and deductions, and ensure compliance for complex income types such as business, freelance, or multiple sources.
Q2. Which is the best site to file ITR? The best site depends on your requirements. Platforms like TaxBuddy are highly recommended as they combine an intuitive interface, AI-driven pre-filled forms, expert support, and secure e-verification. Other options include the official Income Tax e-Filing portal and platforms like H&R Block or Quicko, but TaxBuddy stands out for a seamless, error-free filing experience.
Q3. Where to file an income tax return? Income tax returns can be filed online through the officialIncome Tax e-Filing Portal or through authorized platforms like TaxBuddy. Filing online is faster, reduces errors, and ensures instant acknowledgment. Paper filing is allowed only in rare cases for specific categories, but online filing is preferred for convenience.
Q4. Can I claim capital gains exemption under the new tax regime? Yes, capital gains exemptions are allowed under the new tax regime, but only for specified cases under sections like 54, 54F, and 54EC. It’s important to note that exemptions for investments like NPS contributions or certain home sale proceeds may have limits or conditions. Accurate reporting ensures the exemption is applied correctly.
Q5. How is rental income taxed under the old regime? Under the old tax regime, rental income is taxable under “Income from House Property.” You can claim a standard deduction of 30% on municipal rent received and deduct interest paid on home loans. This deduction reduces taxable rental income, helping lower overall tax liability.
Q6. Which ITR form should I choose for capital gains and rental income? For capital gains and rental income, ITR 2 is the most suitable form. ITR 2 allows reporting of income from salary, house property, capital gains, and other sources, excluding business or professional income. If you have business income, then ITR 3 may be required.
Q7. Is e-verification mandatory after filing ITR? Yes, e-verification is mandatory for your ITR to be considered valid. It can be completed via Aadhaar OTP, net banking, or bank account/ATM methods. Without e-verification, your return is not processed, and refund disbursement may be delayed.
Q8. How can I reconcile TDS and capital gains data before filing? Reconciliation involves cross-checking Form 26AS (for TDS) and broker statements (for capital gains) against actual transactions and income. Ensure all TDS credits are reflected and report accurate gains. Platforms like TaxBuddy simplify this by auto-fetching TDS and capital gains data, reducing the chance of mismatches.
Q9. What deductions can I claim for rental income? For rental income, you can claim:
30% standard deduction on annual rental income
Interest on home loan (if applicable)
Property taxes paid during the financial year These deductions help minimize taxable rental income and reduce overall tax liability.
Q10. Can I switch between old and new tax regimes while filing? Yes, individual taxpayers can choose between the old and new tax regimes while filing. However, switching is subject to specific conditions: salaried individuals and pensioners can switch yearly, while businesses or professionals may have additional restrictions. Accurate selection ensures optimal tax benefits.
Q11. What common errors should I avoid while filing dual-income returns? Common errors include:
Not reporting all sources of income (salary, rental, capital gains)
Mismatched TDS credits
Incorrect bank account or PAN details
Misreporting deductions or exemptions Careful review or using expert-assisted filing with TaxBuddy can prevent these errors.
Q12. How can I track my refund status after filing ITR? Refund status can be tracked on the Income Tax Department’s e-filing portal using your PAN and assessment year. Additionally, TaxBuddy provides automated notifications and updates on refund processing, helping you monitor the timeline and ensuring timely receipt of refunds.
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