Capital Gains Reporting in ITR for AY 2025–26: Date of Transfer Now Mandatory

 The Income Tax Return (ITR) forms notified for Assessment Year (AY) 2025–26 have introduced a critical new compliance requirement: mandatory disclosure of the exact date of transfer for each capital asset. This applies across asset classes and is now embedded into the capital gains schedules of ITR-2, ITR-3, and ITR-5.

New Requirement: Segregation Based on Date of Transfer

The revised ITR forms require taxpayers to segregate capital gains transactions based on whether the transfer took place before or on/after July 23, 2024. This date-based segregation is aimed at implementing changes arising from tax amendments notified mid-year and ensuring accurate application of revised capital gains tax rules, if any.

What Taxpayers Must Do: Step-by-Step Preparedness

To ensure accurate reporting and avoid mismatches, a taxpayer must:

1. Collect Complete Transaction Statements
   Gather all sale and redemption statements from stock brokers, mutual fund platforms, bond/debt issuers, and property sale agreements.

2. Classify Assets by Type and Transfer Date
   Consolidate transactions by:

   • Equity shares

   • Debt mutual funds or bonds

   • Real estate (land/building)

   • Gold and jewellery

   • Other capital assets
     Then bifurcate each set of transactions based on the actual date of transfer—before or after July 23, 2024.

3. Compute Capital Gains with Correct Tax Rate
   Apply the applicable short-term or long-term capital gains tax rates based on asset type and holding period. For mutual funds, recent amendments may alter the tax treatment depending on whether it qualifies as equity-oriented.

4. Maintain Evidentiary Records
   Ensure all broker contract notes, mutual fund capital gains statements, and property sale deeds are preserved and match the entries in the ITR schedules.

5. Cross-Verify with AIS/TIS/Form 26AS
   Before finalizing your return, reconcile reported capital gains data with:

   • Annual Information Statement (AIS)

   • Tax Information Statement (TIS)

   • Form 26AS
     Any mismatch may result in system-generated discrepancies or notices under Section 143(1).

Consequences of Inaccurate Reporting

Incorrect reporting of date of transfer or misclassification of gains (e.g., showing a long-term gain as short-term or vice versa) may lead to:

• Auto-adjustments under Section 143(1) during processing,

• Demand notices or refund rejections,

• Increased risk of scrutiny if material mismatches are found.

Key Takeaway

The capital gains section of the ITR is no longer just a summary — it is now a transaction-level reporting module, aligned with real-time data from brokers, depositories, and the income tax department’s information repositories. Careless or approximate reporting is no longer an option.