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With the September 15 ITR deadline nearing, taxpayers must accurately report property transactions in ITR-2 or ITR-3 for AY 2025-26 to avoid penalties.
Income Tax Filing 2025
ITR Filing 2025: As the extended deadline of September 15 for the income tax return (ITR) filing is approaching, taxpayers are rushing to complete their tax duties for FY2024-25 (assessment year 2025-26). Once the due date is over, taxpayers have to file their ITR under belated filing, which attracts a penalty and the unavailability of benefits like offsetting losses.
While taxpayers are filing their ITRs, they might file their income inaccurately due to negligence or a lack of information. This scenario is prominent when taxpayers are filing by themselves without help of experts such as CAs.
One such misreporting of income could happen regarding the property transactions. Whether you’ve bought or sold a property, understanding how to declare these in your ITR is crucial to avoid penalties and ensure compliance.
Let’s understand the navigating guide to report a property transaction (if happens) for the Assessment Year (AY) 2025-26.
How To Report Property Purchases
If your total income exceeds Rs. 50 lakh, you must disclose property purchases under Schedule AL (Assets and Liabilities) in ITR-2 or ITR-3.
You have to provide details such as the property’s address, purchase price, and stamp duty value.
If the property was bought with a home loan, taxpayers can claim deductions on interest paid under Section 24(b) in the “Income from House Property” section. For properties costing over Rs. 50 lakh, buyers must deduct 1% TDS under Section 194-IA and file Form 26QB.
How To Report Property Sales In ITR Filing
Income from property sales is reported as capital gains in ITR-2 (for individuals/HUFs without business income) or ITR-3 (if business income exists).
You need to enter details like sale price, purchase price, date of purchase/sale, and brokerage charges in Schedule CG.
Capital gains are classified as short-term (held less than 24 months) or long-term (held over 24 months). Long-term capital gains (LTCG) qualify for indexation benefits if sold before July 23, 2024, reducing taxable gains.
Moreover, exemptions under Section 54 (reinvestment in residential property) can also be claimed.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
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