Income Tax Return 2025: Major Upgrade in ITR-2 Filing Process You Should Know About

With the commencement of the new financial year, the tax season is now officially underway. Taxpayers across the country can begin filing their Income Tax Returns (ITR) for the Assessment Year 2025–26 (Financial Year 2024–25).

As in previous years, the return filing can be done through both online and offline modes. However, this year brings a significant upgrade for a particular category of filers—the ITR-2 form.

What’s New in the ITR-2 Filing Process?

The Income Tax Department, in its latest move to streamline return filing, has introduced a new Excel-based utility version of ITR-2, released on 25 March 2025. This version aims to simplify the filing process for certain taxpayers, particularly salaried individuals, pensioners, and those without business or professional income.

One of the standout features of this new utility is the option to file a revised return under Section 139(8A). This enhancement allows taxpayers to easily rectify any errors or omissions after filing, offering flexibility and reducing the stress associated with mistakes.

Who is Eligible to File ITR-2?

The ITR-2 form is specifically designed for:

• Individuals and Hindu Undivided Families (HUFs) who do not earn income from business or profession.
• Taxpayers with an annual income exceeding ₹50 lakh.
• Those earning from capital gains, multiple house properties, or other sources such as dividends or interest.
• Directors of companies or individuals who hold shares in unlisted firms.
• Individuals possessing foreign assets or foreign income.

If your income profile matches any of the above, ITR-2 is the appropriate form for your tax return.

ITR-1 (Sahaj) vs ITR-2 – Choosing the Right Form

Selecting the correct ITR form is crucial to avoid rejections or penalties. Let’s understand the key differences between ITR-1 (Sahaj) and ITR-2:

You may use ITR-1 (Sahaj) if:

• Your total income is less than ₹50 lakh.
• You earn income from salary, one house property, pension, interest, or dividends.
• You do not have any capital gains or foreign assets.

You should use ITR-2 if:

• Your total income is more than ₹50 lakh.
• You have capital gains (e.g., from sale of shares, mutual funds, or real estate).
• You own multiple residential properties.
• You are a company director or own equity in an unlisted firm.
• You hold foreign property or have foreign income.

Conclusion

The Income Tax Department’s initiative to upgrade ITR-2 is a step in the right direction, especially for taxpayers with complex income profiles. By allowing revision under Section 139(8A), the department ensures that minor mistakes do not result in major compliance issues.

While this update simplifies the process, it is important for taxpayers to carefully assess their income sources before selecting the correct form and filing their returns in a timely manner.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.