The Central Board of Direct Taxes (CBDT) has officially notified the Income Tax Return Form-2 (ITR-2) for the financial year 2024-25 via a gazette notification dated May 5, 2025. This form is primarily relevant to salaried individuals, pensioners, and taxpayers with income sources beyond what’s covered under ITR-1.

The latest updates bring several positive changes for taxpayers, especially those earning between ₹50 lakh and ₹1 crore annually. These modifications aim to simplify tax filing and improve reporting clarity.

Who Should File ITR-2?

ITR-2 is designed for individual taxpayers and Hindu Undivided Families (HUFs) who do not have income from business or profession.

It is especially applicable if you:

• Have income from salary or pension

• Own more than one residential property

• Have capital gains or losses from the sale of property, shares, or mutual funds

• Earn income from foreign assets or investments

• Have total income exceeding ₹50 lakh

• Need to report investments and capital gains comprehensively

In essence, if you are not eligible to file ITR-1 (Sahaj), then ITR-2 is likely your default return form.

What Has Changed in the New ITR-2 Form?

According to a social media update by CBDT, five major updates have been made in the ITR-2 form for FY 2024-25:

1. Capital Gains Reporting Revamped

The new form mandates detailed disclosure of capital gains or losses. Taxpayers must now mention whether a property transfer occurred before or after July 23, 2024—a crucial detail that impacts tax liability based on updated tax rules.

2. Asset and Liability Reporting Threshold Raised

Earlier, individuals with total income above ₹50 lakh had to report their assets and liabilities. Now, this threshold has been increased to ₹1 crore, offering relief to middle and upper-middle-income taxpayers.

3. Improved Deductions Disclosure under Sections 80C and 10(13A)

The new form demands more granular information regarding deductions claimed under key sections, including 80C (investments) and 10(13A) (house rent allowance).

4. Mandatory TDS Section Identification

Previously, reporting TDS required only disclosing the deductor's name and amount. Now, taxpayers must also specify under which section the TDS has been deducted—enhancing transparency.

5. Choice in Tax on Capital Gains with or without Indexation

For asset transfers after July 23, 2024, taxpayers will have the option to pay capital gains tax at 20% with indexation or 12.5% without indexation, offering flexibility based on investment type and holding period.

Big Relief for Those Earning Between ₹50 Lakh and ₹1 Crore

A key highlight of the changes is the revision of the asset-liability reporting threshold.

Taxpayers with incomes up to ₹1 crore will no longer need to furnish detailed schedules of their assets and liabilities, reducing compliance burden significantly.

Capital Gains Tax: Timing Now Matters More Than Ever

In the updated form, the capital gains schedule (Part A) now requires disclosure on when the transfer took place—before or after July 23, 2024. This date determines the applicable tax rate, which is particularly relevant for real estate and investment property transactions.

Summary

The notification of ITR-2 for FY 2024-25 brings taxpayer-friendly changes, especially for salaried individuals, investors, and those with diversified income sources. With clearer reporting formats, relaxed compliance thresholds, and better alignment with updated tax laws, the new ITR-2 makes filing returns easier and more transparent.

Taxpayers are encouraged to review the new form carefully and prepare their documents in line with the updated requirements to ensure smooth and timely filing during the assessment year 2025-26.