ITR-2 Filing Guide for FY 2025-26: Step-by-Step Process, 26AS/AIS Reconciliation, and Old vs New Regime Tax Examples

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by

Himanshu
in

1) What is ITR-2 and who should file it

ITR-2 is meant for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession but have any of the following:

  • Capital gains (short-term or long-term)
  • Income from more than one house property
  • Foreign income or assets
  • Being a director in a company
  • Investments in unlisted equity shares

If your only income is salary/pension, one house property, and total income ≤ ₹50 lakh, you may be eligible for ITR-1 instead — otherwise, use ITR-2.

2) Documents to collect before filing

  • PAN & Aadhaar (linked)
  • Bank account details (IFSC, account number)
  • Form 16 from your employer
  • Form 16A / TDS certificates (from banks, others)
  • Form 26AS (TDS/TCS summary)
  • AIS (Annual Information Statement) and TIS
  • Bank statements (for savings interest)
  • Home loan interest certificate (if applicable)
  • Broker contract notes / capital gains statement
  • Investment proofs for deductions (80C, 80D, etc.)

3) Important deadlines

  • For FY 2025-26 (AY 2026-27), the last date for filing (non-audit) is 15 September 2026.
  • Belated return can be filed till 31 December 2026 but with a penalty.

4) How income is reported in ITR-2

  • Salary → Schedule S
  • House Property → Schedule HP
  • Capital Gains → Schedule CG
  • Other Income → “Income from Other Sources” section
  • Deductions → Schedule VI-A
  • Taxes Paid / TDS → Tax Paid and Verification section

5) Step-by-step filing process (online)

  1. Login to Income Tax e-filing portal
  2. Go to: e-File → Income Tax Returns → File Income Tax Return
  3. Select Assessment Year 2026-27 and choose ITR-2
  4. Select Prepare and Submit Online (prefilled data) or Upload JSON (offline utility)
  5. Review pre-filled data (salary, TDS, bank interest, etc.)
  6. Fill missing details:
    • Salary from Form 16
    • House property income/loss
    • Capital gains with purchase/sale dates and cost
    • Other income (bank interest, etc.)
    • Deductions under Chapter VI-A
  7. Verify TDS and taxes paid with Form 26AS/AIS
  8. Validate the form
  9. Submit and e-verify instantly (Aadhaar OTP, Netbanking, DSC, etc.)

6) How to use Form 26AS & AIS

Form 26AS shows all tax credits in your PAN — TDS from employer/bank, TCS, advance tax, and self-assessment tax.
AIS shows a wider range of financial transactions — stock trades, interest income, property purchases, mutual fund investments, etc.

Steps to reconcile:

  1. Download Form 26AS from the e-filing portal (redirects to TRACES)
  2. Download AIS/TIS from the portal
  3. Cross-check:
    • Salary TDS in Form 16 = Salary TDS in 26AS
    • Bank interest TDS = TDS in 26AS
    • Capital gains transactions in AIS match broker reports
  4. If mismatch — contact deductor to revise TDS statement or give feedback in AIS

7) Example calculation — FY 2025-26 (Old Regime)

Rahul has:

  • Salary: ₹12,00,000 (TDS ₹90,000)
  • Let-out property: rent ₹2,40,000, municipal tax ₹24,000, loan interest ₹1,20,000
  • Bank interest: ₹30,000 (TDS ₹3,000)
  • LTCG (listed shares after 23 Jul 2024): ₹1,50,000
  • Deduction 80C: ₹1,50,000

House property income:
Gross rent 2,40,000 − Municipal tax 24,000 = 2,16,000
Less 30% standard deduction: 64,800 → 1,51,200
Less interest: 1,20,000 → 31,200 taxable

Total income before CG:
Salary after standard deduction: 12,00,000 − 50,000 = 11,50,000

  • House property: 31,200
  • Bank interest: 30,000
    = 12,11,200
    Less 80C: 1,50,000 → 10,61,200

Capital gains:
LTCG 1,50,000 − Exemption 1,25,000 = 25,000 taxable @ 12.5% = ₹3,125

Tax:
Other income 10,61,200 under old slabs = ₹1,30,860
Capital gains tax = ₹3,125
Total = ₹1,33,985
Cess @ 4% = ₹5,359 → ₹1,39,344
Less TDS ₹93,000 → Pay ₹46,344

8) Income-wise tax comparison (Old vs New Regime) — FY 2025-26

Assumptions:

  • Salaried individual, resident, age < 60
  • No capital gains, only standard deduction (₹50,000) in both regimes
  • No other deductions in New Regime except standard deduction
  • Old Regime includes 80C = ₹1.5 lakh deduction
Total Income (₹)Old Regime Tax (₹)New Regime Tax (₹)
5,00,0000 (Rebate u/s 87A)0 (Rebate u/s 87A)
10,00,0001,02,96075,400
15,00,0002,58,9601,56,000
20,00,0004,41,6002,88,400

Incomes above ₹7 lakh in New Regime do not get full rebate — tax savings depend on deductions you can claim in Old Regime.

9) Common mistakes to avoid

  • Relying fully on pre-filled data without verifying
  • Ignoring AIS entries — they may contain transactions you forgot to report
  • Not splitting capital gains before/after 23 July 2024 for correct tax rate
  • Missing e-verification — your return will be invalid without it
  • Filing in the wrong form (ITR-1 instead of ITR-2)

Disclaimer

This guide is for educational purposes only and is based on current tax rules applicable for FY 2025-26 (AY 2026-27). Tax laws can change, and individual circumstances vary. Always verify figures with your own documents and consult a qualified tax professional before filing.

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