Error in itr 2 online utility ca highlights technical bug which may lead to taxpayers with capital gains income carry forward loss getting scrutiny notices later

Error in itr 2 online utility ca highlights technical bug which may lead to taxpayers with capital gains income carry forward loss getting scrutiny notices later

Chartered Accountant Aditi Bhardwaj has highlighted an error in the ITR-2 online filing utility on the e-filing portal. More specifically, there is an inconsistency in values in the Schedule Brought Forward Loss Adjustment (BFLA) and Schedule Carry Forward Loss (CFL) of the ITR-2 form. If this error is not fixed at once, then taxpayers filing ITR-2 online might encounter problems with their ITR getting rejected or adjusted under Section 143(1).

The assessee has reported Long-Term Capital Gains (LTCG) of Rs 1,44,108 during the year, which is set off against a short-term capital loss of Rs 6,585, resulting in net LTCG of Rs 1,37,523. This is further set off against a brought forward loss of Rs 48,233 from AY 2023–24, leaving a balance of Rs 89,290, which is exempt under section 112A.

The BFLA schedule reflects this set-off of Rs 48,233 correctly. However, the CFL schedule continues to show Rs 48,233 as a carried forward loss, instead of reducing it to zero. This leads to a validation error during filing.

Unlike previous assessment years, the utility currently does not provide a “Set Off” button, which would enable manual activation of the adjustment.

Additionally, while the BFLA - Utility form view correctly displays the row for LTCG taxable @ 12.5%, this row is completely missing in the preview or final PDF version of the return. The set-off details reflected in the utility are not carried forward into the preview, which appears to be a system error or rendering issue.

You may remember Aditi Bhardwaj had earlier pointed out an error in calculating Section 234C interest in the Income Tax Return Utility on X (formerly Twitter).

ET Wealth Online has reached out to many Chartered Accountants to find out if Bhardwaj is correct. They said:

Chartered Accountant (Dr.) Suresh Surana says: Bhardwaj is right. In the given case, there is an inconsistency in the online filing utility, specifically in the integration between Schedule Brought Forward Loss Adjustment (BFLA) and Schedule Carry Forward Loss (CFL).

Chartered Accountant Abhishek Soni, co-founder, Tax2Win, says: We have reviewed a similar case in the ITR-2 utility with the same conditions, including LTCG, STCL set-off, and brought forward losses. However, we did not encounter the error mentioned in the CFL schedule or the discrepancy in the preview/PDF format.

The Income Tax Department said to Bhardwaj: “Dear @CAAditiBhardwaj, We believe our team has been in touch with you regarding the issue. They are looking into this.”

Also read: ITR filing 2025: Who can file ITR-2, who cannot file it for FY 2024-25 (AY 2025-26)?