ITR-2 glitch could derail filings: CA flags error in capital gains loss adjustment
According to experts, the error could result in incorrect carry forward of losses, affecting future set-offs.
- Aug 2, 2025,
- Updated Aug 2, 2025 9:23 AM IST
Chartered Accountant Aditi Bhardwaj has flagged a critical glitch in the ITR-2 online utility—an error that could cause tax returns to be flagged, adjusted, or rejected under Section 143(1).
In a post on X, Bhardwaj pointed out an inconsistency in how the utility handles capital gains and loss adjustments in the Brought Forward Loss Adjustment (BFLA) and Carry Forward Loss (CFL) schedules.
Here’s what she found:
A taxpayer reported ₹1,44,108 in Long-Term Capital Gains (LTCG), partially offset by ₹6,585 in short-term capital loss (STCL).
This brought the net LTCG to ₹1,37,523, which was further offset by ₹48,233 in brought forward capital losses from Assessment Year 2023–24.
After adjustments, ₹89,290 remained, falling under the tax exemption limit of Section 112A.
While the BFLA schedule correctly shows the ₹48,233 loss as fully adjusted, the CFL schedule continues to show the same ₹48,233 as a carried forward loss, instead of zero. This inconsistency triggers a validation error when attempting to file the return.
Bhardwaj also noted that, unlike previous years, the current utility does not include a “Set Off” button, which previously allowed taxpayers to manually align loss adjustments across schedules.
In addition, she flagged a preview error: although the utility’s working screen correctly displays the LTCG taxable at 12.5%, this row is missing from the preview and final PDF version of the return—raising concerns about potential data mismatch during submission.
This is not the first time Bhardwaj has highlighted technical issues with the e-filing system. She previously pointed out errors in Section 234C interest calculations in the same utility.
According to experts, the error could result in incorrect carry forward of losses, affecting future set-offs. More urgently, it might trigger automated adjustments under Section 143(1), leading to return rejections, demands for clarifications, or rectification notices.
They add that such glitches, if uncorrected, increase compliance burdens and risk exposure for taxpayers, particularly those dealing with capital gains and loss set-offs.
The Income Tax Department has acknowledged Bhardwaj’s post and responded on X, saying their team is “looking into this.”
Chartered Accountant Aditi Bhardwaj has flagged a critical glitch in the ITR-2 online utility—an error that could cause tax returns to be flagged, adjusted, or rejected under Section 143(1).
In a post on X, Bhardwaj pointed out an inconsistency in how the utility handles capital gains and loss adjustments in the Brought Forward Loss Adjustment (BFLA) and Carry Forward Loss (CFL) schedules.
Here’s what she found:
A taxpayer reported ₹1,44,108 in Long-Term Capital Gains (LTCG), partially offset by ₹6,585 in short-term capital loss (STCL).
This brought the net LTCG to ₹1,37,523, which was further offset by ₹48,233 in brought forward capital losses from Assessment Year 2023–24.
After adjustments, ₹89,290 remained, falling under the tax exemption limit of Section 112A.
While the BFLA schedule correctly shows the ₹48,233 loss as fully adjusted, the CFL schedule continues to show the same ₹48,233 as a carried forward loss, instead of zero. This inconsistency triggers a validation error when attempting to file the return.
Bhardwaj also noted that, unlike previous years, the current utility does not include a “Set Off” button, which previously allowed taxpayers to manually align loss adjustments across schedules.
In addition, she flagged a preview error: although the utility’s working screen correctly displays the LTCG taxable at 12.5%, this row is missing from the preview and final PDF version of the return—raising concerns about potential data mismatch during submission.
This is not the first time Bhardwaj has highlighted technical issues with the e-filing system. She previously pointed out errors in Section 234C interest calculations in the same utility.
According to experts, the error could result in incorrect carry forward of losses, affecting future set-offs. More urgently, it might trigger automated adjustments under Section 143(1), leading to return rejections, demands for clarifications, or rectification notices.
They add that such glitches, if uncorrected, increase compliance burdens and risk exposure for taxpayers, particularly those dealing with capital gains and loss set-offs.
The Income Tax Department has acknowledged Bhardwaj’s post and responded on X, saying their team is “looking into this.”