How to File ITR 2 for Share Market Income AY 2025-26?

Filing Income Tax Return (ITR) for share market income can feel tricky-especially with the new capital gains tax rules introduced in FY 2024-25. If you have earned from equity shares, mutual funds, or other listed securities, ITR-2 is the right form for AY 2025-26. The reporting for FY 2024-25 comes with a few extra steps, like separately reporting gains before and after July 23, 2024, and manually claiming certain rebates.

Who Must File ITR-2?

ITR 2 shall be filed by an assessee who is an individual or an HUF if income is earned from capital gains (like share market income), in addition to sources like salary, house property, or foreign income. This form is also mandatory if the assesse:

• Hold unlisted equity shares,
• Serve as a company director,
• Have assets or income outside India,
• Or exceed ₹50 lakh in total income.

Capital Gains Tax Rules: Know the Timeline

The tax rules changed mid-financial year:

• Before July 23, 2024: LTCG exemption was ₹1 lakh and taxed at 10%; STCG at 15%.
• On/After July 23, 2024: LTCG exemption increased to ₹1.25 lakh (12.5% tax), STCG jumped to 20%.

Because of this, your ITR-2 form requires you to separately report gains before and after July 23, 2024.

Latest ITR-2 Utility (Excel & Offline Available)

For AY 2025-26, the Income Tax Department has released an updated Excel utility (and JSON schema) to file ITR-2, which you can download from the e-Filing portal. Key updates include:

• Separate capital gains entries (pre/post July 23, 2024),
• Reporting capital losses from share buybacks (if declared under "Other Sources"),
• Higher asset/liability threshold now at ₹1 crore (₹10 million) before needing disclosure.

Steps

1. Download the Excel utility (via "Downloads" → ITR Forms → ITR-2).
2. Fill Part A (personal details, tax regime choice, etc.).
3. Populate capital gains schedules-ensuring correct pre/post July 23 reporting.
4. Declare any share buyback loss under "Other Sources".
5. Validate, generate the file (XML/JSON), then upload to the e-Filing portal.
6. Verify electronically within 30 days.

Section 87A Rebate

If the total income (including share market gains) is below ₹7 lakh under the new regime, the ITR utility might not auto-apply the Section 87A rebate. However, the assessee is eligible for the rebate and must claim it manually to reduce your tax liability.

Filing Timeline & Due Date

Filing Checklist

FAQs

Who should file ITR-2 for AY 2025-26?

Anyone with income from capital gains (shares, mutual funds, bonds), foreign assets, more than one house property, or as a company director should file ITR-2. It is not for business/professional income.

Can I use ITR-1 if I only have share market income?

No. ITR-1 is for salaried taxpayers without capital gains. Share market income (short-term or long-term) requires ITR-2 or ITR-3, depending on the nature of transactions.

What's new in ITR-2 for AY 2025-26?

The form now asks you to report capital gains separately for transactions before and after July 23, 2024, due to revised tax rates. It also has fields for declaring losses from share buybacks.

How are capital gains on shares taxed this year?

Before July 23, 2024: LTCG exemption up to ₹1 lakh, taxed at 10% thereafter; STCG taxed at 15%.

On/After July 23, 2024: LTCG exemption up to ₹1.25 lakh, taxed at 12.5%; STCG taxed at 20%.

Can I file ITR-2 online?

Yes, but as of now, the Excel utility method is recommended for accuracy, especially when reporting pre- and post-July 23 gains.

What is the last date to file ITR-2 for AY 2025-26?

The extended due date is September 15, 2025. Filing after this will attract a late fee and interest.