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Can We File ITR for Previous Years? A Complete Guide to Old Return Filing & Condonation Requests

by Grocliq | Jun 5, 2025 | MCA, MCA Knowledge

Can we file ITR for previous years if we have missed the deadline? This is one of the most common questions taxpayers ask when they realize they have not filed their Income Tax Returns (ITR) on time. The good news is that yes, you can file ITR for previous years, but there are specific guidelines and processes to follow. This comprehensive guide will explain how you can manage old return filing, what a condonation request involves, and how to safely navigate the system to avoid penalties and claim refunds.

Filing your ITR timely is crucial to maintain compliance with the tax laws and avoid legal complications. Yet, many taxpayers face situations such as missed deadlines, unavailability of documents, or simply lack of awareness, leading to questions like, “Can we file ITR for previous years?” This article will clarify all doubts and guide you through the necessary steps to file your past ITR smoothly.

If you are a small business owner or planning to expand, you might also want to look into online Udyam/Udyog Aadhar MSME registration to get benefits for your enterprise. Similarly, compliance with GST rules, including GST return filing and GST registration, is crucial for businesses filing taxes properly.

What is the Time Limit for Filing ITR in India?

When wondering can we file ITR for previous years, it is essential to understand the official deadlines and the legal framework governing them. Under the Income Tax Act, the regular deadline for filing an ITR for individuals is typically July 31st of the assessment year—the year immediately following the financial year for which the income is declared.

Here’s how it works:

The Financial Year (FY) is the year in which income is earned. For example, FY 2023-24 runs from April 1, 2023, to March 31, 2024.
The Assessment Year (AY) is the year immediately after the FY in which the income is assessed. For FY 2023-24, the AY is 2024-25.

If you fail to file your return by July 31st, you can still file a belated return by December 31st of the assessment year. However, after December 31st, filing ITR requires a special procedure.

Penalties also come into play under Section 234F of the Income Tax Act, where:

If you file the return after the due date but before December 31st, you may be liable to pay a fee of up to ₹5,000.
Filing after December 31st and up to March 31st may attract a penalty of ₹10,000, except if your total income is below ₹5 lakh, in which case the penalty is ₹1,000.

Understanding these deadlines helps answer the critical question: can we file ITR for previous years and what are the limits? Timely filing reduces penalties and maintains eligibility for refunds and other benefits.

For companies and startups, timely filing of returns is just one aspect—private limited company registration and one person company (OPC) registration are key foundational steps for compliance and tax filing.

Can You File ITR for Previous Years?

The big question—can we file ITR for previous years if the deadline has passed?—has a nuanced answer.

Yes, you can file ITR for previous years, but it depends on when you file and the reason for delay:

Belated Return Filing: You are allowed to file a belated return for a previous financial year up to December 31st of the assessment year. For example, if you missed filing your ITR for FY 2021-22, you can still file a belated return up to December 31, 2023.
Filing after Due Date with Condonation: If the belated filing window is also missed, you may be able to file your old return by submitting a condonation request to the Income Tax Department. This request seeks to excuse your late filing for valid reasons.

If you are still asking can we file ITR for previous years after the belated return window closes, know that it’s possible, but requires approval from tax authorities based on the validity of your reasons.

Key points about filing ITR for previous years:

Belated returns are accepted till December 31 of the assessment year.
After December 31, filing depends on approval of a condonation request.
Filing late returns without following legal processes can lead to rejection or penalties.

Understanding Condonation Request: When and How to Use It

One of the most important terms in the context of late filing is condonation request. This is a formal appeal to the Income Tax Department to excuse the delay in filing your ITR beyond the allowed belated return period.

What is a condonation request?

A condonation request is essentially a petition explaining why you missed the deadline and asking for permission to file the return late without penalty. The Central Board of Direct Taxes (CBDT) has guidelines under which condonation requests are considered valid.

When is a condonation request accepted?

Genuine hardships such as serious illness, natural disasters, or unavoidable circumstances.
Situations where taxpayers are entitled to refunds but could not file in time.
To enable the carry forward of losses such as capital losses or business losses.

How to file a condonation request?

Log in to the official Income Tax e-filing portal using your credentials.
Choose the option to file a rectification request or the relevant application for condonation.
Submit a detailed explanation along with supporting documents proving the reason for delay.
Upload any required certificates or proofs (medical, legal, etc.) to strengthen your request.
Submit the application and monitor the status online.

Processing times can vary, so it is advisable to file the condonation request as soon as possible if you missed the belated return window.

Who Can Benefit from Filing Old Returns?

Understanding can we file ITR for previous years is particularly important for certain groups of taxpayers who often face filing delays or require past return filings:

Freelancers and Salaried Individuals: Many professionals miss filing due to workload or documentation issues.
Small Business Owners: Compliance requirements and tax audits often necessitate filing past returns.
Non-Resident Indians (NRIs): Complexities in income sources and foreign income make timely filing challenging.
Taxpayers Claiming Refunds: If you overpaid taxes in earlier years, filing old returns is crucial to claim your refunds.
Individuals Carrying Forward Losses: To claim deductions for losses from capital gains, house property, or business, filing past ITRs timely is mandatory.

Each of these groups benefits significantly by answering the question can we file ITR for previous years in their favor and taking timely action.

Consequences of Not Filing Past ITR

Ignoring the question can we file ITR for previous years can lead to serious consequences including:

Loss of Refunds: Any tax refund due from previous years is forfeited if the return is not filed within the prescribed time.
Inability to Carry Forward Losses: Losses such as business losses or capital losses can only be carried forward if returns are filed on time or condonation is granted.
Penalties and Interest: Besides Section 234F fees, interest on unpaid taxes can accumulate.
Legal Scrutiny: Non-filing increases the risk of tax scrutiny or notice from the Income Tax Department.
TDS Mismatch: Mismatches in tax deducted at source (TDS) and filed returns can lead to complications and delayed refunds.

Filing your past ITR promptly can help you avoid these pitfalls and maintain a clean tax record.

How to File Old Returns Safely with Professional Support

If you are still wondering can we file ITR for previous years, professional help can make the process hassle-free. Filing old returns, especially those requiring a condonation request, involves:

Correct form selection and accurate details to avoid rejection.
Proper documentation and drafting of the condonation request.
Ensuring all income sources and deductions are correctly reported.
Timely follow-up with tax authorities if needed.

Platforms like Finodha provide expert assistance, ensuring your old return filing is compliant, error-free, and efficient, reducing the risk of penalties or legal issues.

Why Choose Finodha for Late/Old ITR Filing?

When you ask, can we file ITR for previous years, the answer is clear—and so is the path to do it right. Finodha offers reliable, affordable, and expert tax filing services starting at just ₹690. Here’s why Finodha is the preferred choice for late or old return filing:

Expert handling of condonation requests to justify late filing.
Assistance in recovering legitimate refunds from past assessment years.
Guidance on carrying forward losses and complying fully with tax laws.
Transparent pricing and quick turnaround times.
Dedicated support to minimize stress and avoid legal complications.

Get your tax filings back on track. Start your late return filing with Finodha today.

Conclusion

The question can we file ITR for previous years has a positive answer, but with important conditions. Timely filing within the due date or the belated return period is ideal. If you missed those, submitting a condonation request is the legal way to file your past returns and avoid penalties.

Filing old returns helps you reclaim refunds, carry forward losses, and maintain a smooth tax record. Don’t delay—consult experts like Finodha to ensure your late filing is accurate, hassle-free, and legally compliant.

Frequently Asked Questions (FAQs)

Q1. Can I file ITR for previous years?

Yes, you can file ITR for previous years either as a belated return within the assessment year or later by submitting a condonation request.

Q2. What is the time limit for filing past ITRs?

You can file a belated return up to December 31 of the assessment year. Beyond that, filing requires condonation approval.

Q3. How to request condonation for late filing?

File an application online via the Income Tax e-filing portal explaining your delay, along with supporting documents for acceptance.

Q4. Will I get a refund if I file ITR late?

You can claim refunds for past years if eligible, but filing sooner increases your chances and reduces penalties.

Q5. Is there a penalty for filing old returns?

Yes, late filing attracts penalties under Section 234F, which can range up to ₹10,000 based on your income and delay duration.

Q6. Can I carry forward losses if I file old returns now?

Losses can only be carried forward if you file your return within the stipulated time or after approval of your condonation request.

Q7. Is professional help necessary for filing old returns?

While you can file yourself, professional help is highly recommended for condonation requests and ensuring compliance.

Q8. What documents are required for old return filing?

Income proofs (Form 16), bank statements, TDS certificates, and any documents supporting your condonation request are essential.

More Information: https://taxinformation.cbic.gov.in/

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Where to Show Pension Income in ITR 1: Complete Guide for Pensioners on Reporting and Taxation

by Grocliq | Jun 5, 2025 | MCA, MCA Knowledge

Many pensioners face confusion about where to show pension income in ITR 1, leading to errors in tax filing. If you are retired and receive a pension, it is essential to know exactly where to show pension income in ITR 1 to ensure your tax return is filed accurately. Misreporting pension income can cause unnecessary tax notices or delay refunds.

This detailed guide will explain where to show pension income in ITR 1, the taxability of pension income, eligibility for filing ITR 1, and common mistakes to avoid. We will also cover deductions available for pensioners and provide answers to frequently asked questions about pension income in tax returns. Whether it’s regular pension or family pension, understanding where to show pension income in ITR 1 is crucial for hassle-free tax filing.

If you are new to tax filing or require assistance, you may also want to explore the Income Tax Return Filing Online process for a smooth and secure experience.

What is Pension Income? Understanding the Basics

Before we dive into the specifics of where to show pension income in ITR 1, let’s understand what pension income actually means.

A pension is a fixed sum paid regularly to a retired employee, often monthly.
There are two primary types of pension:
- Regular Pension: Paid to the retiree based on their employment and service tenure.
- Family Pension: Paid to the family members or nominee of a deceased employee.

The classification of these two types affects taxation and reporting. Importantly, regular pension is considered part of your salary income, whereas family pension is classified as income from other sources.

Knowing this distinction is vital because it determines where to show pension income in ITR 1 and which form you should file.

If you are a business owner or a professional planning to expand your services, understanding what is TDS and its impact on your income is crucial for compliance.

Is Pension Income Taxable? Clarifying Taxable Pension Rules

One of the first questions pensioners ask is whether pension income is taxable. The answer depends on whether the pension is commuted or uncommuted.

Commuted Pension: A lump sum received at the time of retirement. Under Section 10(10A) of the Income Tax Act, commuted pension may be partially or fully exempt from tax, depending on whether you were a government employee or in the private sector.
Uncommuted Pension: The regular monthly pension received after retirement. This is fully taxable under the head “Salary.”

Therefore, taxable pension usually refers to the uncommuted pension income you receive regularly.

When preparing your tax return, knowing where to show pension income in ITR 1 means including your taxable pension under the salary head to avoid discrepancies.

For those operating companies, understanding the GST Registration Process and how GST impacts your financials is equally important.

Who Can Use ITR 1 to Report Pension Income?

Knowing your eligibility is crucial to file your return correctly and understand where to show pension income in ITR 1.

ITR 1 (Sahaj) is meant for resident individuals having income up to ₹50 lakh per annum.
Eligible incomes include:
- Income from salary or pension.
- Income from one house property.
- Income from other sources (excluding winnings from lottery or racehorses).
You cannot use ITR 1 if you have:
- Income from capital gains.
- Income from business or profession.
- Income from family pension (since this is income from other sources and not salary).

If you satisfy these criteria, you can file ITR 1 and report your pension income properly. Knowing where to show pension income in ITR 1 helps you avoid errors in eligibility and filing. For entrepreneurs, registering your entity online is simple with Online Udyam Udyog Aadhar MSME Registration, which can help you avail government benefits.

Where to Show Pension Income in ITR 1? Step-by-Step Instructions

Now to the key question: where to show pension income in ITR 1?

Here’s how to report pension income in ITR 1 accurately:

Open the ITR 1 form (online or offline).
Navigate to the Income Details section.
Find the field labeled “Salary/Pension”.
Enter your total pension income amount here.
- This includes your regular pension (uncommuted pension).
- Use the figures from your Form 16 or pension payment slips.
If you have received Form 16 from your pension disbursing bank or employer, the pension income details will be specified there.
Remember, there is no separate section for pension in ITR 1. Pension income must be shown under “Salary”.
Verify that you have included all sources of pension income (from multiple banks, if applicable).
Complete the rest of the form and file.

To summarize: where to show pension income in ITR 1 is exclusively in the “Salary/Pension” section. Do not try to report it as other income or elsewhere.

How to Report Family Pension If You Receive It?

If you receive family pension, the rules differ significantly when it comes to tax filing.

Family pension is treated as Income from Other Sources.
This income type is not supported in ITR 1, meaning you cannot report family pension income in this form.
Instead, you must file ITR 2, which has a dedicated section for income from other sources.
Reporting family pension correctly is crucial to avoid mismatches or tax notices.

So, if you receive family pension, the question where to show pension income in ITR 1 does not apply because family pension cannot be shown in ITR 1 at all.

Common Mistakes in Reporting Pension Income

Many pensioners make avoidable mistakes while filing their returns due to confusion about where to show pension income in ITR 1. Avoid these errors:

Declaring pension income under “Other Income” instead of the “Salary” section.
Not including pension income received from multiple banks or sources.
Forgetting to claim the standard deduction of ₹50,000 applicable to pensioners.
Failing to include pension income correctly if you have received arrears.
Ignoring to attach or verify Form 16 or pension slips.
Using ITR 1 despite receiving family pension (which requires ITR 2).

Correct knowledge of where to show pension income in ITR 1 helps prevent such mistakes and ensures hassle-free filing.

Tax Deductions Available for Pensioners to Reduce Taxable Income

When filing your return, pensioners can avail several tax deductions on their income from pension:

Standard Deduction: A flat ₹50,000 deduction on salary/pension income.
Section 80C: Deductions up to ₹1,50,000 on investments like LIC, PPF, ELSS, NSC, and more.
Section 80D: Health insurance premiums for self and family, with higher limits for senior citizens (up to ₹50,000).
Section 80TTB: Deduction up to ₹50,000 on interest income from savings accounts for senior citizens.

Properly claiming these deductions lowers your tax liability on taxable pension and improves your refund prospects.

Documents Required for Filing Pension Income in ITR 1

Make sure you have the following documents ready when reporting pension income and filing ITR 1:

Pension payment slips or bank statements showing pension credited.
Form 16 issued by the pension disbursing bank or employer, if available.
PAN card and Aadhaar card for identity verification.
Bank account details for any tax refund.
Form 26AS for verifying TDS deducted on your pension income.

Having these documents handy will make it easier to fill the form accurately, especially in the section where to show pension income in ITR 1.

Conclusion

Knowing where to show pension income in ITR 1 is essential for pensioners to file their returns correctly. Pension income, particularly taxable pension, must be reported under the “Salary/Pension” section in ITR 1. Family pension, however, requires filing ITR 2.

Correct reporting of pension in ITR ensures compliance with tax laws and prevents notices from the Income Tax Department. Remember to claim eligible deductions to minimize your tax liability and keep all relevant documents ready before filing.

By following this comprehensive guide, you can confidently file your tax return and know exactly where to show pension income in ITR 1.

Frequently Asked Questions (FAQs)

Q1. How to show pension income in ITR 1?

You should report pension income under the “Salary/Pension” section of ITR 1, using figures from Form 16 or pension slips. There is no separate section for pension.

Q2. Is pension taxable under ITR 1?

Yes, taxable pension (uncommuted pension) is treated as salary income and must be reported in ITR 1 if eligible.

Q3. Which section to use for pension in ITR?

In ITR 1, pension income goes under the “Salary/Pension” head.

Q4. Can I file ITR 1 if I receive both pension and fixed deposit interest?

No. FD interest is income from other sources, which disqualifies you from filing ITR 1. You need to file ITR 2.

Q5. What if I receive family pension?

Family pension is reported under income from other sources and cannot be shown in ITR 1. You must file ITR 2.

Q6. Are there any exemptions on pension income?

Yes, commuted pension may be exempt under Section 10(10A). Uncommuted pension is fully taxable.

Q7. Can I claim deductions on pension income?

Yes, standard deduction and other applicable sections like 80C, 80D, and 80TTB are available.

Q8. Where to show arrears of pension in ITR 1?

Include pension arrears under the “Salary” section, mentioning them separately if needed.

More Information: https://taxinformation.cbic.gov.in/

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What is ITR 6? Meaning, Filing Guide & Form Explained

by Grocliq | Jun 5, 2025 | MCA, MCA Knowledge

If you are a company owner or involved in corporate finance and wondering what is ITR 6, this article is designed to clarify everything you need to know. What is ITR 6 and how it fits into the corporate tax filing framework is essential knowledge for companies to stay compliant with Indian income tax laws. This guide will explain the ITR 6 meaning, who should file this form, and provide a step-by-step filing process.

The companies tax return form ITR 6 is specifically designed for companies to declare their income, profits, and tax liabilities. Corporate tax filing is a legal requirement that plays a crucial role in financial transparency and compliance. While multiple ITR forms exist, ITR 6 is the form that applies to most domestic companies and foreign companies earning income in India (except those exempt under Section 11). To understand how ITR 6 fits in the overall tax ecosystem, you can also refer to our detailed guide on income tax return filing online. By understanding what is ITR 6 and its features, companies can avoid penalties and streamline their tax submission process.

What is ITR 6?

What is ITR 6? Simply put, ITR 6 is an income tax return form prescribed by the Indian Income Tax Department for companies to file their tax returns. It is one of the primary companies tax return forms meant for domestic and foreign companies (with income from India) that are not claiming exemption under Section 11, which typically covers charitable or religious organizations.

The main role of ITR 6 is to report the company’s total income, including business income, capital gains, income from other sources, and to compute the tax payable accordingly. Filing ITR 6 is a mandatory compliance requirement under the Income Tax Act, ensuring that companies accurately disclose their financial information for assessment by tax authorities.

The form is detailed and comprehensive, requiring companies to report their balance sheet, profit and loss statements, depreciation, foreign income, and transactions related to digital assets, reflecting the evolving business landscape. Knowing what is ITR 6 and its role will help companies fulfill their statutory obligations efficiently.

ITR 6 Meaning: Who Should File?

To understand ITR 6 meaning fully, it is important to know who exactly must file this form. The ITR 6 form is not for all taxpayers but specifically tailored for companies that fit the following criteria:

Domestic Companies: All private and public limited companies incorporated in India must file ITR 6. You can learn more about private limited company requirements here.
Foreign Companies: Foreign companies that have taxable income sourced from India must also file this form.
Limited Liability Partnerships (LLPs) and Partnerships: LLPs and partnerships that do not claim exemptions under Section 11 and are liable to pay corporate taxes file under ITR 6.
Exclusions: Companies or entities claiming exemption under Section 11 (charitable trusts, religious institutions) do not file ITR 6; they have separate forms.

The ITR 6 meaning is essentially linked to corporate tax compliance, ensuring that companies, regardless of their origin, report their taxable income and pay taxes accordingly.

Key Features of ITR 6

Understanding the key features of ITR 6 helps companies prepare better for filing:

No Exemption Under Section 11: Only companies that are not claiming charitable or religious trust exemptions file this form.
Detailed Reporting Requirements: ITR 6 requires comprehensive financial disclosures, including balance sheets, profit and loss accounts, and multiple schedules.
Income Types Covered: Business income, capital gains, income from other sources including digital assets, foreign income, and depreciation must be reported.
In-depth Schedules: Companies must fill schedules like Schedule BP (Business and Profession), Schedule CG (Capital Gains), Schedule DPM (Depreciation), Schedule OS (Other Sources), and relevant tax computation schedules.
Mandatory for Most Companies: ITR 6 is the standard form for the majority of companies except those specially exempted.

These features highlight the form’s complexity and the need for careful preparation to avoid errors or omissions. To ease the process, companies can also consider using income tax return filing online recommended for ITR 6 submissions.

Structure of ITR 6 Form

The structure of ITR 6 is designed to capture all relevant financial and tax information of companies. The form consists primarily of two parts:

Part A:
- General information about the company
- Balance Sheet details
- Profit and Loss account statements
- Other necessary disclosures regarding financial transactions
Part B:
- Tax computation based on income
- Income breakdown by source
- Important schedules including:
  - Schedule BP: Business and Profession income details
  - Schedule CG: Capital Gains information
  - Schedule DPM: Depreciation calculations
  - Schedule OS: Income from Other Sources
  - Schedule 115AD: Tax provisions related to foreign companies
  - Minimum Alternate Tax (MAT) computations

The complexity of the form underlines the importance of understanding what is ITR 6 for accurate and timely filing.

ITR 6 Filing Process (Step-by-Step Guide)

Filing ITR 6 might seem complicated but can be done efficiently by following these steps:

Register on the Income Tax e-filing Portal: Companies need a valid login on the government tax portal.
Select ITR 6 Form: Choose the correct tax return form (ITR 6) for filing.
Fill in All Required Details: This includes financial statements, tax payments, balance sheet data, and income disclosures. Be ready with documents such as audited financials, tax payment challans, and bank statements.
Validate the Form: Use the validation tool on the portal to check for missing or incorrect entries.
Submit the ITR 6 Form: Upload the filled form and submit it online.
E-Verify the Return: Verify your filing via Aadhaar OTP, net banking, or other authorized methods to complete the process.

By understanding what is ITR 6 and following this process, companies can ensure timely and error-free filing.

Common Challenges in Filing ITR 6

Companies often face several challenges when filing ITR 6:

Technical Issues on the Income Tax Portal: At times, slow servers or glitches can delay submissions.
Complex Data and Documentation: Gathering and correctly reporting detailed financial data can be cumbersome.
Changing Tax Regulations: Keeping up with amendments and compliance requirements is necessary to avoid errors.
Strict Timelines: Missing deadlines can lead to penalties and interest.

Being aware of these challenges and preparing accordingly is essential for smooth filing of ITR 6.

Pro Tips to File ITR 6 Smoothly

To avoid issues and ensure smooth submission of ITR 6, consider these tips:

Prepare All Documents in Advance: Have your audited financial statements, tax receipts, and all relevant documents ready.
Seek Professional Assistance: A tax consultant can help navigate complex schedules and legal requirements.
File Early: Avoid last-minute filing to reduce errors and penalties.
Keep Track of Updates: Follow any notifications or changes from the Income Tax Department about ITR 6 filing.

These strategies can make the filing process faster and more accurate, reflecting a clear understanding of what is ITR 6.

ITR 6 Filing Due Dates for AY 2025–26

Companies must be mindful of the following due dates for ITR 6 filing for the assessment year 2025–26:

Standard deadline for all companies: 31st October 2025
For companies requiring audit: 30th November 2025

Filing on time is crucial to avoid interest and penalties and to maintain good compliance status.

Conclusion

Knowing what is ITR 6 and how to file it correctly is essential for companies to meet their legal tax obligations in India. Accurate and timely filing of the companies tax return form ITR 6 ensures compliance, avoids penalties, and helps maintain good standing with tax authorities. By preparing all documents, understanding the form’s structure, and following a systematic filing process, companies can handle ITR 6 filing efficiently and confidently.

File with Finodha

Need expert assistance with your company’s ITR 6 filing? Finodha offers professional, affordable, and quick filing services. Get all your GST, ITR, and MCA compliance done seamlessly in one place. Contact Finodha today to simplify your corporate tax filing process.

Frequently Asked Questions (FAQs)

Q1. What is ITR 6 used for?

ITR 6 is used by companies to file their income tax returns with the Income Tax Department. It is primarily for reporting taxable income, tax computation, and financial disclosures, excluding companies claiming Section 11 exemptions.

Q2. Who can file ITR 6?

Domestic companies, foreign companies with Indian income, and LLPs or partnerships not claiming exemptions under Section 11 can file ITR 6.

Q3. Can LLPs use ITR 6?

Yes, LLPs that do not claim charitable exemptions must file their income tax returns using ITR 6.

Q4. Can a company file ITR 6 if it has zero income?

Yes, even if the company has zero income, filing ITR 6 is mandatory.

Q5. What happens if I file ITR 6 late?

Late filing can lead to penalties ranging from ₹5,000 to ₹10,000 depending on the delay duration.

Q6. Is it possible to revise ITR 6 after submission?

Yes, a company can revise its ITR 6 within the specified time frame in the assessment year.

Q7. What documents are needed for ITR 6 filing?

Financial statements, tax payment proofs, bank statements, audited reports, and relevant compliance documents.

Q8. How do I e-verify my ITR 6 return?

E-verification can be completed through Aadhaar OTP, net banking, or by sending a signed physical ITR-V to the Centralized Processing Centre (CPC).

More Information: https://taxinformation.cbic.gov.in/

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How to Fill ITR 2 Capital Gains in FY 2024-25 [Complete Step-by-Step Guide]

by Grocliq | Jun 5, 2025 | MCA, MCA Knowledge

If you’ve sold property, stocks, or mutual funds this financial year, you’re likely required to report capital gains. This means you need to learn exactly how to fill ITR 2 capital gains correctly. Failing to report your capital gains accurately in your tax return may lead to penalties or scrutiny by the Income Tax Department.

This comprehensive guide explains how to fill ITR 2 capital gains in simple terms, helping you navigate the ITR-2 form, especially the crucial Schedule CG section. Whether it’s short-term gains from stock trading or long-term profits from mutual funds or real estate, we’ll guide you through every detail of your capital gains tax return filing—along with expert advice on managing asset sale ITR cases.

Who Should File ITR-2?

The ITR-2 form is designed specifically for individuals and Hindu Undivided Families (HUFs) who have sources of income that do not fall under business or profession but do include capital gains. Here’s who needs to understand how to fill ITR 2 capital gains:

Individuals and HUFs with capital gains from the sale of stocks, mutual funds, or real estate.
Those owning more than one house property.
Individuals with foreign assets or income.
Investors involved in cryptocurrency, international equity, or foreign mutual funds.
Salaried professionals who’ve also sold capital assets during the financial year.

If any of these apply to you, you must file your capital gains tax return using the ITR-2 form. Most importantly, if your return involves any kind of asset sale ITR, such as immovable property or unlisted shares, ITR-2 is the appropriate form.

Documents Required Before You Begin

Before diving into how to fill ITR 2 capital gains, make sure you’ve collected all the documents necessary for smooth reporting:

PAN and Aadhaar Card
Form 16 (if you’re a salaried employee)
Form 26AS (for TDS and TCS details)– learn more about What is TDS
AIS and TIS statements from the Income Tax portal
Capital gains statements from your broker or registrar (like CAMS or KFintech)
Purchase and sale deeds in case of real estate
ISIN and scrip-wise reports for listed shares and mutual funds
Proof of expenses incurred during acquisition/improvement
Bank statements reflecting sale proceeds or capital inflow

These documents are essential not only for accurate filing of your capital gains but also to avoid mismatch issues in income tax return filing online.

Step-by-Step Guide: How to Fill ITR 2 Capital Gains

Learning how to fill ITR 2 capital gains properly ensures your return is accurate, compliant, and complete. Follow these steps carefully:

Step 1: Log in to the Income Tax e-Filing Portal

Visit www.incometax.gov.in
Log in using your PAN, password, and OTP
Go to “e-File” > “File Income Tax Return”
Select Assessment Year 2025–26
Choose the Online mode and ITR-2 form

Step 2: Choose Your Filing Details

Select your filing status: Individual or HUF
Choose “Taxable income is more than basic exemption limit” as your reason for filing

Step 3: Navigate to the Income Schedule

In the return form, scroll to the “Income Schedule” section
Click on “Schedule Capital Gains” (ITR 2 Schedule CG)

Step 4: Fill in ITR 2 Schedule CG Accurately

This is the core of how to fill ITR 2 capital gains. Here, you must:

Declare Short-Term Capital Gains (STCG) under Section 111A for listed shares held < 12 months
Declare Long-Term Capital Gains (LTCG) under Section 112A for listed shares/mutual funds held > 1 year
Include sale of immovable property, foreign securities, unlisted shares, and even cryptocurrencies
Choose between scrip-wise or consolidated entries for equity transactions

Step 5: Report Capital Gains from Different Assets

When it comes to reporting gains from asset sale ITR, make sure to:

Mention Date of Acquisition and Date of Sale
State Cost of Acquisition (COA)
Provide Fair Market Value as on Jan 31, 2018 (for grandfathering LTCG)
Mention Full Sale Consideration
Calculate Indexed Cost of Acquisition (for property and other eligible assets)
Mention Expenses on Sale (brokerage, stamp duty, legal fees)

Step 6: Review and Validate the Return

Carefully check values in Part B – Total Taxable Income (TTI)
Cross-verify exemptions and deductions under Sections 54, 54EC, or 54F
Click “Preview Return” and validate all inputs

Step 7: E-Verify Your Return

You can e-verify using:
- Aadhaar OTP
- Net banking
- Digital Signature Certificate (DSC)
Or, send a signed physical copy of ITR-V to CPC Bengaluru

This process finalizes your capital gains tax return. Remember, filing without verification is considered incomplete.

Common Mistakes to Avoid in ITR 2 Capital Gains Filing

Filing how to fill ITR 2 capital gains improperly can lead to scrutiny or notice. Watch out for:

Selecting ITR-1 or ITR-3 instead of ITR-2 when capital gains are involved
Ignoring the LTCG exemption limit of ₹1 lakh
Missing ISIN or FMV data while reporting equity LTCG
Not including sale proceeds of foreign shares or crypto assets
Entering incorrect dates or cost details in asset sale ITR schedules
Not claiming applicable exemptions under Sections 54, 54EC, or 54F

Tips to Maximize Your Capital Gains Tax Benefits

If you want to lower your tax outgo while correctly understanding how to fill ITR 2 capital gains, keep these smart tax-saving tips in mind:

Claim exemption under Section 54 if you reinvest LTCG from property into another property
Invest in 54EC bonds to save tax on real estate capital gains
Carry forward losses from previous years to offset current capital gains
Consider tax loss harvesting before the financial year ends
File on time to avoid interest and penalty
Learn the GST registration process to ensure your business compliance

Expert help is highly recommended for complex asset sale ITR filings.

How Finodha Can Help You File ITR 2 Capital Gains Easily

Still unsure about how to fill ITR 2 capital gains properly? Let Finodha’s experts do it for you.

Why Finodha?

Affordable ITR plans
Personalized support for STCG, LTCG, and all capital assets
Expert calculation of capital gains tax return
Instant DSC (Digital Signature Certificate) issuance
Tax assistance for salaried, investors, and NRIs

Services We Offer:

ITR-2 filing for all types of capital gains
Customized filing support for shares, mutual funds, and property
Expert handling of asset sale ITR complexities
Advisory for exemptions and deductions
Support for foreign income and digital assets

Ready to file your capital gains return stress-free?

Conclusion

Filing your income tax return with capital gains doesn’t have to be overwhelming. With this detailed guide on how to fill ITR 2 capital gains, you can now report all capital asset transactions confidently and correctly. Whether your income stems from equity trading, mutual funds, or property sales, using the correct form and schedule ensures smooth processing and minimal tax risk.

Still unsure or have complex asset sale ITR entries? Let Finodha’s experts handle it all—from documentation to filing—so you can stay stress-free.

Frequently Asked Questions (FAQs)

Q1. How to report capital gains in ITR 2?

You need to go to “Schedule Capital Gains” and enter details for short-term and long-term capital gains, including ISIN, COA, FMV, and sale consideration. This is the key step in understanding how to fill ITR 2 capital gains.

Q2. Which section in ITR 2 is for mutual fund gains?

Mutual fund capital gains are reported under Schedule Capital Gains. Short-term gains go under Section 111A, and long-term gains under Section 112A.

Q3. How to add real estate capital gains in ITR 2?

Add it under the “Schedule Capital Gains – Sale of Immovable Property” section. Mention purchase/sale dates, sale value, and indexed COA.

Q4. Can I file ITR 2 without a broker statement?

Yes, but it’s advisable to include broker data to avoid mismatch in AIS or 26AS data.

Q5. What if I forgot to report LTCG from shares?

You can revise your return before the deadline. Late filing may attract penalty and interest.

Q6. Do I need to report exempt LTCG under ₹1 lakh?

Yes, even though it’s exempt under Section 112A, it must be reported to claim exemption.

Q7. Is ITR 2 applicable if I sold inherited property?

Yes. You must report the sale and calculate gains based on the cost to the previous owner.

Q8. How can Finodha help with capital gains filing?

Finodha provides end-to-end services, including calculating accurate gains, applying exemptions, and filing ITR-2 with expert review.

More Information: https://taxinformation.cbic.gov.in/

Read more interesting articles:

How to Report Short Term Capital Gain in ITR 2: Complete Guide to STCG Filing in India

by Grocliq | Jun 5, 2025 | MCA, MCA Knowledge

If you have earned profits from selling equity shares or securities within one year, reporting your short term capital gain in ITR 2 correctly is essential for tax compliance. This guide will help you understand the process of STCG filing in detail, ensuring you report your gains properly under the capital gains section of the Income Tax Act. Filing your equity tax return accurately not only avoids penalties but also helps you optimize your tax liabilities.

If you are starting a business or expanding your investment portfolio, consider exploring Private Limited Company registration for better structuring and tax planning.

Many taxpayers are unsure about how and where to report short term capital gain in ITR 2, which can lead to errors or missed filings. This article will clarify the key concepts, forms, tax rates, and best practices related to STCG so you can file confidently and on time.

Understanding ITR 2 Form

The ITR 2 form is the prescribed income tax return form for individuals and Hindu Undivided Families (HUFs) who earn income from sources other than business or profession. Importantly, if you have short term capital gain in ITR 2, you are required to file your returns using this form.

If your filing includes digital procedures, don’t forget to obtain your Digital Signature Certificate (DSC) to authenticate your tax returns online with ease.

Who Should Use ITR 2 for STCG Filing?

Individuals or HUFs with short term capital gain in ITR 2 but no income from business or profession.
Taxpayers earning income from multiple house properties.
Investors involved in capital market transactions who earn short term and long term capital gains.
Those with income from foreign assets or undisclosed income needing detailed reporting.

If you operate under an One Person Company (OPC), you may also need ITR 2 for reporting capital gains and other income streams outside of business operations.

The capital gains section within ITR 2 caters specifically to declaring all capital gains, including STCG and LTCG. This is why investors filing their equity tax return must pay attention to ITR 2, as the form is structured to capture detailed transaction data for compliance.

Where and How to Report Short Term Capital Gain in ITR 2

Proper reporting of your short term capital gain in ITR 2 is crucial to avoid discrepancies with the tax department. In the ITR 2 form, the Schedule CG is dedicated to reporting all capital gains.

Steps to Report Short Term Capital Gain in ITR 2:

Open Schedule CG in the ITR 2 form.
Under the capital gains section, report your short term capital gains from equity shares, typically under Section 111A.
For gains from other assets like mutual funds or debt instruments, select the relevant section within Schedule CG.
Enter all required details accurately, including:
- ISIN (International Securities Identification Number) of the security.
- Date of acquisition and sale of the asset.
- Fair market value (if applicable).
- Brokerage or transaction costs related to the sale.

Also, if you’ve sold any MSME-registered entity assets, ensure you’ve filed using your valid Udyam/Udyog Aadhaar MSME Registration before reporting those transactions.

Make sure to cross-check the STCG amounts with your Form 26AS, broker contract notes, and Annual Information Statement (AIS). This will help reconcile your reported figures and prevent mismatches during processing.

STCG Tax Rates Applicable in FY 2024-25

Understanding the tax rates applicable to your short term capital gain in ITR 2 will help you calculate your tax liability accurately.

The tax rates applicable are:

15% flat tax rate on STCG from listed equity shares and equity-oriented mutual funds, as per Section 111A.
For STCG arising from the sale of non-listed securities or other assets, the gains are taxed according to your applicable income tax slab rate.
Additional surcharge and health & education cess apply based on total income.
It is important to note that advance tax payment is mandatory if your total tax liability exceeds ₹10,000.

Remember, the 15% flat rate under Section 111A applies only to gains arising from transactions subject to Securities Transaction Tax (STT). Gains from other sources or assets will be taxed at your slab rate.

Deductions and Exemptions: What You Can and Cannot Claim

When filing short term capital gain in ITR 2, you should be aware of allowable deductions and exemptions under the Income Tax Act:

Allowed:

You can set off short term capital losses against your short term capital gains, reducing taxable income.
You may also set off short term losses against long term capital gains if any, under certain conditions.

Not Allowed:

No deductions under Chapter VI-A (like Sections 80C, 80D) are allowed against STCG under Section 111A.
Exemptions applicable for long term capital gains, such as those under Section 54, do not apply to short term capital gains.
You cannot carry forward short term capital losses unless they are properly reported in your return.

Hence, your STCG filing must be precise and reflect the accurate gains and losses to optimize your tax outcome.

Common Mistakes to Avoid in Short Term Capital Gain in ITR 2 Filing

Incorrect reporting of your short term capital gain in ITR 2 is a common source of tax notices and penalties. Avoid these mistakes:

Incorrect or missing ISIN codes leading to mismatch with income tax records.
Mixing up short term capital gain in ITR 2 with long-term capital gains, causing wrong tax calculations.
Forgetting to report gains from all your demat accounts and multiple brokerages.
Overlooking the obligation to pay advance tax on STCG leading to interest penalties.
Failing to reconcile your returns with Form 26AS and the Annual Information Statement (AIS) issued by the tax department.
Not retaining supporting documents such as contract notes and statements for verification.

By paying close attention to these common errors, your STCG filing will be smoother and compliant.

Best Practices for Equity Tax Return Filing

To ensure hassle-free filing of your short term capital gain in ITR 2, follow these best practices:

Maintain organized and digitized records of all purchase and sale transactions, including contract notes and brokerage details.
Regularly cross-verify your broker’s TDS deductions with your Form 26AS and AIS.
Use technology-enabled platforms or trusted fintech tools specifically designed for capital gains reporting.
Keep abreast of the latest tax rules related to capital gains and advance tax payments.
Seek professional help if your transactions involve complexities like IPOs, ESOPs, or multiple demat accounts.

Consistently applying these tips will simplify your equity tax return and ensure your STCG filing is accurate and timely.

When to Seek Help with Your ITR Filing for STCG

Certain scenarios require expert assistance in filing your short term capital gain in ITR 2:

Complex equity transactions such as IPO allotments, Employee Stock Option Plans (ESOPs), or mutual fund switches.
Handling income from multiple demat accounts and brokerage firms that complicate reconciliation.
Your total income exceeds the audit threshold, necessitating tax audit and certification.
Claiming special exemptions or reliefs that require deeper tax knowledge.
You receive notices or queries from the Income Tax Department about your capital gains.

In such cases, relying on experienced tax professionals or reliable platforms ensures error-free STCG filing and peace of mind.

Conclusion

Filing your short term capital gain in ITR 2 accurately is vital to remain compliant with tax laws and avoid penalties. By understanding the correct form, schedule, and applicable tax rates, you can confidently manage your STCG filing. Avoid common mistakes by reconciling your data and using professional services if needed. Remember to file your equity tax return before the due date, July 31, 2025, to enjoy a hassle-free tax season.

Frequently Asked Questions (FAQs)

Q1. How to report short-term capital gain in ITR 2?

You report short-term capital gain in ITR 2 under Schedule CG, specifically under Section 111A for equity shares. You must provide details such as ISIN, acquisition and sale dates, and gain amount. Make sure to reconcile with Form 26AS and broker notes.

Q2. Which schedule to fill for capital gains in ITR?

Capital gains, including short-term and long-term, must be reported in Schedule CG of the ITR forms such as ITR 2, which is used by investors without business income.

Q3. What is the tax rate on STCG in ITR 2?

The tax rate on STCG from listed equity shares under Section 111A is a flat 15%. For other assets, STCG is taxed as per your income tax slab.

Q4. Can I set off short term capital losses against other income?

Short term capital losses can only be set off against short term or long term capital gains but not against other heads of income like salary or business.