u/sageapps

Filing season last year, I did everything I was supposed to. Downloaded Form 26AS, matched TDS with Form 16, entered capital gains from my broker's tax P&L. Filed before July 31, got my acknowledgement, thought I was done.

August. Defect notice from IT department.

Turned out my AIS had an SFT-018 entry for a mutual fund redemption from a folio I'd forgotten about — an old ELSS fund I'd started in 2018, finally hit the 3-year lock-in, and later redeemed. The redemption value was about ₹85,000. I'd completely forgotten this folio existed. It wasn't in the capital gains statement my broker sent me because it was with a different AMC.

The AIS had the entry. My ITR didn't declare it. System flagged it as underreported income.

To fix it I had to file a revised return, which meant going back through the whole process, recalculating gains (purchase NAV vs redemption NAV, LTCG above ₹1L at that time), paying the shortfall tax plus interest under 234A and 234B.

What I should have done: downloaded my AIS before filing and read every SFT entry, not just the TDS entries. Form 26AS didn't have this. AIS did.

**How to get your AIS:** [incometax.gov.in](http://incometax.gov.in) → login → AIS/TIS tab → download PDF. Password: your PAN in lowercase + date of birth in DDMMYYYY format. So if PAN is ABCDE1234F and DOB is 5 March 1985, password is abcde1234f05031985.

What to specifically look for in the SFT section:

Cross every SFT entry against your own records. If you have investments scattered across platforms, this is where the gaps show up.

July 31 is less than 4 weeks away. If you haven't looked at your AIS yet — do it before you file, not after.

Happy to answer questions if anyone has specific AIS entries they're confused about.

First time filing ITR-2 after years of ITR-1 (had to switch once I started investing in equity). Made a bunch of avoidable mistakes. Sharing the ones that aren't obvious from the form itself.

1. The pre-fill is incomplete for capital gains

The ITR portal pre-fills a lot of data from AIS and your broker integrations. For salary, TDS, and basic interest income, the pre-fill is usually reasonable. For capital gains — trust nothing. The pre-fill misses transactions regularly, especially if you invest across multiple platforms (Zerodha + Kuvera + direct AMC for example). Always import your broker's tax P&L separately and reconcile line by line.

2. The "grandfathering" provision for pre-2018 equity holdings

If you bought equity shares or equity MFs before January 31, 2018, the purchase cost for LTCG calculation is the higher of your actual cost or the fair market value (FMV) on January 31, 2018. This is the "grandfathering" provision. If your broker's tax P&L is showing cost of acquisition for old holdings, double check whether it's using FMV or actual purchase price. Most brokers handle this correctly but it's worth verifying for positions held since before 2018.

3. The 80CCD(1B) situation in new regime

If you switched to new regime for FY25-26 but were investing in personal NPS for 80CCD(1B) benefits — you cannot claim this deduction in new regime. People sometimes declare NPS contributions and then also choose new regime, which is contradictory. If you're in new regime, employer NPS contribution still reduces your taxable salary (it's not a deduction, it just reduces gross) but personal NPS 80CCD(1B) ₹50k benefit is gone.

4. Schedule AL if you crossed 1 crore gross income

Assets and Liabilities disclosure is mandatory if your gross total income exceeds ₹1 crore. This includes all assets — immovable property, vehicles, bank balances, investments, jewellery, loans outstanding. Many people in this income range file ITR-2 without realising Schedule AL is mandatory. Non-disclosure leads to defect notice.

5. Foreign assets

If you have any foreign assets — shares bought through international platforms, money in NRE accounts (for returning NRIs), or startup equity in foreign companies — Schedule FA is mandatory. Failing to disclose foreign assets when you have them is a Black Money Act violation, not just an ITR defect. The penalties are severe. If you have ESOP from a foreign-listed employer, RSU vesting, or anything similar, talk to a CA who handles Schedule FA before filing.

6. Revised return window

If you file and realise you made a mistake, you can file a revised return. The deadline for revised return for AY 2026-27 is December 31, 2026. You can revise as many times as needed before that date. Filing a revised return is much better than sitting on a known error.

Posting this because I see a lot of questions about ITR-2 specifics and the form itself doesn't explain any of this. Hope it helps someone.

There's a lot of confusion in this sub (and elsewhere) about what actually changed with capital gains for FY 2025-26. I've seen wrong numbers being quoted in comments quite a bit. Laying this out properly because it affects how you calculate your tax liability before filing.

What changed vs what people think changed:

Equity STCG (held less than 12 months):
Old rate: 15%
New rate from July 23, 2024 onwards: 20%

If you sold within 12 months, any sale after July 23, 2024 is taxed at 20%, not 15%. If you have transactions straddling this date in FY24-25, there's a split calculation. For FY25-26, all equity STCG is at 20%.

Equity LTCG (held more than 12 months):
Old: 10% above ₹1L exemption
New: 12.5% above ₹1.25L exemption

The exemption limit increased from ₹1L to ₹1.25L. The rate increased from 10% to 12.5%. These two changes partially offset each other — whether you're better or worse off depends on the quantum of your gains.

There's a lot of confusion in this sub (and elsewhere) about what actually changed with capital gains for FY 2025-26. I've seen wrong numbers being quoted in comments quite a bit. Laying this out properly because it affects how you calculate your tax liability before filing.

What changed vs what people think changed:

Equity STCG (held less than 12 months):
Old rate: 15%
New rate from July 23, 2024 onwards: 20%

If you sold within 12 months, any sale after July 23, 2024 is taxed at 20%, not 15%. If you have transactions straddling this date in FY24-25, there's a split calculation. For FY25-26, all equity STCG is at 20%.

Equity LTCG (held more than 12 months):
Old: 10% above ₹1L exemption
New: 12.5% above ₹1.25L exemption

The exemption limit increased from ₹1L to ₹1.25L. The rate increased from 10% to 12.5%. These two changes partially offset each other — whether you're better or worse off depends on the quantum of your gains.

For ITR filing:
Capital gains go in Schedule CG. You need to enter each transaction or use the import from broker feature (which is often incomplete — always cross-check manually). Equity STCG and LTCG are in separate rows. Debt MF is separate. Don't lump everything together.

If your total capital gains are significant, worth double-checking whether your CA or the tool you're using has applied the correct rates. A lot of generic calculators haven't been updated for Finance Act 2024.

Questions welcome.

Filing season last year, I did everything I was supposed to. Downloaded Form 26AS, matched TDS with Form 16, entered capital gains from my broker's tax P&L. Filed before July 31, got my acknowledgement, thought I was done.

August. Defect notice from IT department.

Turned out my AIS had an SFT-018 entry for a mutual fund redemption from a folio I'd forgotten about — an old ELSS fund I'd started in 2018, finally hit the 3-year lock-in, and later redeemed. The redemption value was about ₹85,000. I'd completely forgotten this folio existed. It wasn't in the capital gains statement my broker sent me because it was with a different AMC.

The AIS had the entry. My ITR didn't declare it. System flagged it as underreported income.

To fix it I had to file a revised return, which meant going back through the whole process, recalculating gains (purchase NAV vs redemption NAV, LTCG above ₹1L at that time), paying the shortfall tax plus interest under 234A and 234B.

What I should have done: downloaded my AIS before filing and read every SFT entry, not just the TDS entries. Form 26AS didn't have this. AIS did.

How to get your AIS: incometax.gov.in → login → AIS/TIS tab → download PDF. Password: your PAN in lowercase + date of birth in DDMMYYYY format. So if PAN is ABCDE1234F and DOB is 5 March 1985, password is abcde1234f05031985.

What to specifically look for in the SFT section:

Cross every SFT entry against your own records. If you have investments scattered across platforms, this is where the gaps show up.

July 31 is less than 4 weeks away. If you haven't looked at your AIS yet — do it before you file, not after.

Happy to answer questions if anyone has specific AIS entries they're confused about.

Most people I know download their AIS, glance at it, see some numbers, and assume it's fine. I did the same thing last year. This year I actually read it section by section, and found something that would have caused a defect notice.

My bank had filed a TDS entry for locker rent charges under Section 194C — which is the code for contractor and sub-contractor payments. Locker rent is not a contractor payment. It should have been under a different section entirely. The amount was small, but if I had filed my ITR without catching it, the IT system would have flagged a mismatch between what I declared and what was in AIS, and I'd have gotten a notice asking me to explain it.

The frustrating part is this isn't rare. Banks mis-code TDS entries all the time. Your AIS is only as accurate as what the deductor filed.

Here's what's actually in your AIS and what to check:

Salary (TDS-192): Should match your Form 16 Part A exactly. If you switched jobs mid-year, both employers show up. Common issue — one employer filed under the wrong PAN or used an old address. The amounts need to match what you're declaring.

Dividend income (TDS-194 / SFT-015): Every company that paid you a dividend files an SFT entry. If you hold mutual funds that declared dividends, those show up too. These are fully taxable now (post-2020 DDT removal). Most people forget to add small dividend entries from stocks they barely track.

Business receipts (TDS-194C): This is the contractor code. If you're salaried and you see entries here that you don't recognise — that's a red flag. Could be a bank mis-filing (like my locker rent case) or a vendor who filed your PAN incorrectly.

MF redemptions (SFT-018) and Equity sales (SFT-017): Brokers and RTAs file these. If you redeemed any mutual funds or sold stocks in FY25-26, these entries should be there. Cross-check the total redemption value against your broker's tax P&L. If there's a gap, figure out why before filing.

Savings/FD interest (SFT-016): Banks file interest credited above ₹10,000. If you have FDs across multiple banks, each one files separately. Easy to miss one when you're manually adding up interest income.

Property purchases (SFT-012 / TDS-194IA): If you bought property above ₹50L, TDS was deducted at source. Check that this matches your records.

Foreign remittances (TCS-206CQ): If you sent money abroad — LRS, education, travel card top-ups above thresholds — TCS was collected. This shows up and you need to claim credit for it.

What to actually do:

1. check incometax → AIS/TIS section → download your AIS PDF (password is your PAN in lowercase + DOB in DDMMYYYY format)
2. Go through it section by section, not just the total
3. For each entry that looks wrong — note the deductor name, section code, and amount
4. If it's a bank misfiling, raise a feedback on the AIS portal itself (there's a feedback option against each entry). This doesn't guarantee correction but creates a record.
5. When you file, if there's a genuine mismatch you can't resolve, declare your actual income correctly and add a note — don't match the wrong AIS entry

The IT department has made AIS the primary cross-check tool. Form 26AS is being phased out as the primary document. If you haven't looked at your AIS yet this year, do it before you file.

sageapps reads the AIS PDF and flags entries section by section in plain English — it catches the obvious issues (wrong section codes, inactive entries, missing entries you'd expect) in about 30 seconds.

July 31 is 4 weeks away. If you catch something in AIS now, you still have time to resolve it before filing.

Was reconciling my capital gains across brokers and noticed Kuvera's capital gains PDF reports one combined "Long Term Capital Gains" total at the top that adds equity and debt fund gains together. If you're applying the ₹1.25L equity exemption against that combined number, you're overstating your exemption-eligible gains — debt funds don't get that treatment.

Had to go into the Equity Sub Total / Debt Sub Total breakdown further down the statement to separate them correctly.

Ended up building a small free tool that does this correctly across Zerodha + Kuvera + CAMS statements if anyone wants to check their own numbers — equity only, computes the actual exemption and tax owed. Drop a comment if interested, will share the details

Was reconciling my capital gains across brokers and noticed Kuvera's capital gains PDF reports one combined "Long Term Capital Gains" total at the top that adds equity and debt fund gains together. If you're applying the ₹1.25L equity exemption against that combined number, you're overstating your exemption-eligible gains — debt funds don't get that treatment.

Had to go into the Equity Sub Total / Debt Sub Total breakdown further down the statement to separate them correctly.

Ended up building a small free tool that does this correctly across Zerodha + Kuvera + CAMS statements if anyone wants to check their own numbers — equity only, computes the actual exemption and tax owed.

Every year around this time I'd open three different statements — Zerodha's tax P&L, my Kuvera capital gains PDF, and a CAMS consolidated statement for older mutual fund folios — and manually add up STCG and LTCG across all three to figure out what I owed.

Caught two mistakes doing this by hand last year. One statement reports a combined equity+debt LTCG number in its headline total — if you don't dig into the sub-totals, you end up paying tax on debt fund gains as if they were equity (different rates, no ₹1.25L exemption on debt). The other time I almost taxed a short-term loss as if it were a gain because I misread a negative sign in a spreadsheet.

Built a small tool that takes all three statement types, sums everything correctly (equity only, properly separating gains from losses), and gives you total LTCG/STCG plus what you owe after the ₹1.25L exemption. Also added a quick checker for which ITR form you actually need — turns out a lot of people don't realize any capital gains above ₹1.25L bumps you from ITR-1 to ITR-2 even if you're purely salaried.

Not selling anything, it's free. Happy to share if useful — ask in comments and I'll drop the details

Two things that catch investors off guard every year:

**1. AIS shows sale proceeds, not gains**

SFT-017 (equity shares) and SFT-018 (mutual funds) in your AIS

show the total sale consideration — not your capital gains.

The IT system knows you sold ₹X worth of shares. It expects

Schedule CG in your ITR to account for that ₹X. If Schedule CG

is blank or the numbers don't match, you get a mismatch notice.

Your capital gains statement from Zerodha (Tax P&L), Kuvera,

or CAMS is the source of truth for gains. AIS is just the

cross-check the IT dept uses.

**2. LTCG exemption is ₹1.25L now, not ₹1L**

Changed from July 2024 budget. Long term equity gains above

₹1.25L taxed at 12.5% (no indexation). Short term at 20%.

If you have both STCG and LTCG this year — which most active

investors do — you need Schedule CG filled correctly. ITR-2,

not ITR-1.

**Quick checklist before filing:**

- Download AIS → note SFT-017 and SFT-018 amounts

- Download broker capital gains statement

- Cross-check totals — they should be in the same ballpark

- If you have F&O trades even one lot: ITR-3, not ITR-2

- Foreign stocks (US ETFs via LRS): Schedule FA mandatory

July 31 deadline. Capital gains section is where most

investor ITRs get notices. Worth the extra hour.

Most people open AIS, see a wall of numbers, and either ignore it

or just assume their CA will handle it. I went through mine section

by section this year. Here's what I found:

1. A 194C entry from my bank (contractor receipts section) —I'm fully salaried. Turned out my bank locker rent was filedunder the wrong TDS section. Had I filed normally, the ITsystem would have seen contractor income declared by my bankwith no corresponding business income in my ITR. Classicmismatch trigger.
2. Savings interest from two banks totally ₹14,000+ — I hadcompletely forgotten about this. It's sitting in SFT-016in Part B2. Both old and new regime require you to declarethis in Schedule OS. Only ₹10,000 is exempt under 80TTAand only in old regime.
3. Two dividend entries marked "Inactive" — this means eitherI or the company raised a dispute. The IT dept may not countthese. If you blindly include inactive entries in your ITRyou may end up declaring income that the IT system doesn'texpect you to declare.

Things worth checking in your own AIS before July 31:

- Part B1: Any 194C entries? If you're salaried with no

freelance/consulting, flag it immediately.

- Part B2 SFT-015: Total all dividend entries including

tiny ones (₹50, ₹100 from PSUs). All of it goes in

Schedule OS.

- Part B2 SFT-016: Savings + FD interest. Check both

(SB) and (TD) entries.

- Part B2 SFT-017/018: If you sold shares or redeemed

MFs this year, cross-check AIS sale proceeds against

your broker capital gains statement. Mismatches here

are the #1 notice trigger for investors.

- Status column: filter for "Inactive" entries in any

section. Verify before including.

AIS is available on incometax.gov.in → Login → AIS tab.

Takes 20 minutes to go through properly. Worth it before

you file.

Most people open AIS, see a wall of numbers, and either ignore it

or just assume their CA will handle it. I went through mine section

by section this year. Here's what I found:

1. A 194C entry from my bank (contractor receipts section) —

   I'm fully salaried. Turned out my bank locker rent was filed

   under the wrong TDS section. Had I filed normally, the IT

   system would have seen contractor income declared by my bank

   with no corresponding business income in my ITR. Classic

   mismatch trigger.

2. Savings interest from two banks totally ₹14,000+ — I had

   completely forgotten about this. It's sitting in SFT-016

   in Part B2. Both old and new regime require you to declare

   this in Schedule OS. Only ₹10,000 is exempt under 80TTA

   and only in old regime.

3. Two dividend entries marked "Inactive" — this means either

   I or the company raised a dispute. The IT dept may not count

   these. If you blindly include inactive entries in your ITR

   you may end up declaring income that the IT system doesn't

   expect you to declare.

Things worth checking in your own AIS before July 31:

- Part B1: Any 194C entries? If you're salaried with no

freelance/consulting, flag it immediately.

- Part B2 SFT-015: Total all dividend entries including

tiny ones (₹50, ₹100 from PSUs). All of it goes in

Schedule OS.

- Part B2 SFT-016: Savings + FD interest. Check both

(SB) and (TD) entries.

- Part B2 SFT-017/018: If you sold shares or redeemed

MFs this year, cross-check AIS sale proceeds against

your broker capital gains statement. Mismatches here

are the #1 notice trigger for investors.

- Status column: filter for "Inactive" entries in any

section. Verify before including.

AIS is available on incometax.gov.in → Login → AIS tab.

Takes 20 minutes to go through properly. Worth it before

you file.