Tax Tips: File ITR-2 Before July 31; These Mistakes Can Lead to a Tax Notice...

The Income Tax Department has made the online filing option and Excel utility for ITR-2 available on the e-filing portal for Assessment Year (AY) 2026-27. Eligible taxpayers can now file their Income Tax Returns either through the online portal or by using the offline Excel utility.

**Remember the ITR Filing Deadline**
Taxpayers eligible to file ITR-2 should file their returns by July 31, 2026, unless the government announces a new deadline. Filing returns on time helps avoid last-minute errors, delays in refunds, and the increased pressure on the portal that typically occurs during the final days. Even if an individual's tax liability is zero, filing an ITR may still be mandatory if their income exceeds the threshold limits prescribed under the Income Tax Act.

**Who Can File ITR-2?**
ITR-2 is designed for individuals and Hindu Undivided Families (HUFs) whose income does not arise from a business or profession. This form is typically used by salaried employees, pensioners, individuals owning more than one house property, those earning capital gains from the sale of shares or property, and taxpayers with other complex sources of income.

**Essential for Those Selling Shares, Mutual Funds, or Property**
If you have earned capital gains by selling shares, mutual funds, land, or a house property—or if you own more than one house property—you may be required to file ITR-2. This form is used to report details regarding both short-term and long-term capital gains. Consequently, it is a crucial return form for investors and owners of significant assets.

**Mandatory for Those with Income Exceeding ₹50 Lakhs**
Individuals whose total income exceeds ₹50 lakhs are generally ineligible to file ITR-1 and are required to file ITR-2 instead. Furthermore, ITR-2 is mandatory for various Non-Resident Indians (NRIs), Residents Not Ordinarily Resident (RNORs), Company Directors, and individuals holding unlisted shares. Taxpayers falling under these categories are required to provide additional information. 

**Foreign Assets and Lottery Income Also Included**
ITR-2 can also be used to report income from lotteries, winnings from horse races, or other taxable casual income. Taxpayers with agricultural income exceeding ₹5,000 may also be required to file this form. Furthermore, individuals holding assets, bank accounts, or generating income abroad must provide full details of these in their tax return.

**Avoid These Mistakes**
According to experts, miscalculating capital gains or misclassifying them under the wrong category is the most common error. Many individuals also provide incomplete information regarding Schedule 112A, which pertains to equity investments. Additionally, people often make errors in determining their residential status—whether Resident, Non-Resident Indian (NRI), or Resident but Not Ordinarily Resident (RNOR)—which can significantly impact their tax liability.

Before filing ITR-2, ensure you reconcile your reported income with the details reflected in Form 26AS and the Annual Information Statement (AIS). Accurately fill in the details regarding your bank accounts, assets, investments, vehicles, jewelry, and other significant holdings. Filing your tax return on time and with complete accuracy helps you avoid complications such as tax notices, penalties, and delays in receiving tax refunds.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.