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
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.
Academy
Empower your mind, elevate your skills
What is the error with ITR-2 online utility?
Section 70 and 74 of the Income Tax Act,1961 provides that, Short term capital loss (STCL) can be set off against both STCG and LTCG whereas Long-Term Capital Loss (LTCL) can be set off only against LTCG, and unabsorbed losses may be carried forward for up to 8 years, subject to certain conditions.
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). The taxpayer has a brought forward a capital loss of Rs 48,233 from AY 2023–24, which has been correctly adjusted against the remaining LTCG in Schedule BFLA. Post adjustment of the current year, STCL the entire brought forward loss also stands fully utilized. Accordingly, the Schedule CFL should reflect zero balance.
Despite the correct adjustment shown in Schedule BFLA, the utility continues to display the previous year losses under Schedule CFL as a carried forward amount. It is pertinent to note that this technical issue only appears in the online filing interface, and not in the Excel Utility of ITR -2 issued by the Income Tax Department.
Suresh Surana
Suresh Surana
What can happen if the income tax department does not fix this?
Risk of Scrutiny or Notices: Despite this error, if the taxpayers file their returns it may lead to incorrect carry-forward of losses, leading to adjustments during the assessment u/s Section 143(1) including rejection or modification of the return. Due to this, taxpayers may need to provide additional clarifications or file rectifications, increasing compliance burden and risk exposure.
Despite this error, if the taxpayers file their returns it may lead to incorrect carry-forward of losses, leading to adjustments during the assessment u/s Section 143(1) including rejection or modification of the return. Due to this, taxpayers may need to provide additional clarifications or file rectifications, increasing compliance burden and risk exposure. Issue in set-off of losses in future AY's - Incorrect carry forward of losses may cause issues in subsequent AY, especially when the taxpayer attempts to set off losses which had been already utilized in the prior years.
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).Bhardwaj said on X (formerly Twitter): 'Error in Utility ITR 2: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: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).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.'Surana explains:Soni has a contrarian view. He says: 'It is possible that the issue is specific to that particular return, the utility might be corrupted, or there may have been a data entry oversight. We recommend revalidating the JSON or rechecking the entries in a fresh instance of the utility.'Source: CA (Dr.) Suresh SuranaSource: CA (Dr.) Suresh SuranaAlso read: Step-by-step guide on how to file ITR-1 using excel utility with non-taxable LTCG income, salary, others Surana explains that if the tax department does not fix this error with ITR-2 online utility, the following may happen:
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
an hour ago
- India.com
New vs Old Tax Regime: Key Rules And Deductions You Must Know Before Filing ITR 2025
New Delhi: Good news for taxpayers! The ITR filing deadline has been extended to September 15, giving you more time to make smart tax decisions. One key choice is picking between the old and new tax regime. If you're a salaried employee or a pensioner with no business income, you can easily switch between the two each year while filing your return, just by selecting the right option in your ITR form. If you earn income from a business or profession, switching tax regimes comes with stricter rules. You're allowed to go back to the old tax regime only once in your lifetime after that, your choice is locked. To make this switch, you'll need to file Form 10-IEA before the ITR deadline. If you miss it, the new tax regime will automatically apply by default. If you are confused about choosing which regime, you should be aware that House Rent Allowance (HRA), Leave Travel Allowance (LTA), deductions under Sections 80C to 80U, and home loan interest under Section 24(b) are only available under the old tax regime. The new regime has fewer deductions, but individuals with taxable income up to Rs 12 lakh get a full tax rebate under the new regime. Your entire income will be taxed slab-wise if your taxable income exceeds Rs 12 lakh. Not sure which tax regime to choose? Here's what you need to know. If you want to claim benefits like House Rent Allowance (HRA), Leave Travel Allowance (LTA), deductions under Sections 80C to 80U, or home loan interest under Section 24(b), you'll need to stick with the old tax regime. The new regime offers fewer deductions, but if your taxable income is up to Rs 12 lakh, you could get a full tax rebate. However, if your income goes above Rs 12 lakh, the entire amount will be taxed according to the slab rates. The slabs are zero tax for the initial Rs 4 lakh, 5 per cent tax on Rs 4 lakh to Rs 8 lakh, 10 per cent on Rs 8 lakh to Rs 12 lakh, 15 per cent on Rs 12 lakh to Rs 16 lakh, and so forth. Importantly, the new regime allows only limited benefits under Sections 80CCD(2) and 80CCH(2), excluding the broader 80C basket popular among salaried taxpayers. Before choosing a regime, consider your income, pay structure, and tax-saving investments. Salaried individuals with minimal deductions may benefit from the new regime. If you can claim substantial deductions under Sections 80C, 80D, HRA, or house loan interest, the old regime may be more beneficial. Also, note that you have losses from house property, capital gains, or business income; they cannot be carried forward under the new regime. This may affect future tax liabilities, so consider it before deciding. As a general rule of thumb, tax experts say that the old tax regime will only be advantageous to taxpayers who are eligible to claim Rs 2 lakh deduction for home loan interest under Section 24(b) or a large house rent allowance (HRA). Most other deductions are unlikely to justify remaining with the old regime. (With IANS Inputs)
India Today
4 hours ago
- India Today
Why Indian students need real-world financial education from an early age
How many of us have watched our parents scramble to find a CA during tax season or seen them struggle with basic financial decisions like choosing the right insurance policy or understanding mutual funds? Perhaps we've even found ourselves in the same boat, calling up relatives for advice on filing the ITR or feeling overwhelmed by the maze of investment options available scenario plays out in millions of Indian households every year. Despite India's rapidly transforming and digitally integrated economy, most of us, including our parents, navigate financial decisions with limited knowledge and a lot of irony is stark. While we are witnessing unprecedented economic growth and digital financial innovation, most Indian students complete their education without any meaningful exposure to practical finance. They graduate knowing complex mathematical theorems but struggle to understand concepts like EMIs, credit scores, or even basic tax planning. This gap between academic achievement and financial literacy not only weakens the foundation of India's future workforce but also perpetuates a cycle where financial decisions remain a source of stress rather than empowerment. This gap needs to be filled, and it starts with school Barot, CEO & Co-Founder of Zell Education, highlights why Indian students must learn real-world finance early. In India, many young adults step into life with academic knowledge but little financial awareness, leaving them unprepared for crucial THE FINANCIAL AWARENESS DEFICITFinancial literacy remains low in India despite economic advancements over the years. According to a Reserve Bank of India survey, financial literacy in India stood at 62.6% based on knowledge, behaviour and attitude. This gap in knowledge has many real-life consequences, such as a high credit score or zero know-how on how to set a long-term financial needs to be street-smart to handle real-world situations and that is only possible if they are exposed to financial education from an early age. Incorporating topics such as how to make informed decisions around savings, spending, borrowing, the risks and rewards of various investment instruments, the impact of inflation, taxes and insurance are something that one must OF EXPERIENTIAL LEARNINGCreating awareness about financial education should go beyond textbooks as it is most effective when it feels real, when students see how decisions affect outcomes, even in controlled environments. Various simulations like mock stock markets, budgeting exercises, or student-run enterprises are great ways to enhance retention and several private institutions in India are already taking this initiative seriously, mainstream adoption across all socio-economic backgrounds is the way forward to build a financially confident nation. EMPOWERING TEACHERS BY TRAINING THEMOne of the biggest barriers to financial education is the lack of trained educators in the country. Without proper training, even a well-designed curriculum can fall flat. In such a case, it becomes crucial to invest in a structured teacher training program that covers both content and pedagogy. A simple step of equipping educators with the right tools to simplify complex ideas and relate them to students' lives can turn classrooms into incubators of financial LITERACY TO FINANCIAL RESPONSIBILITYAchieving financial literacy at an early age can shape their mindset and not just teach them how to handle money. Students who are financially aware tend to show greater self-discipline, long-term planning, and critical thinking. These traits extend beyond money matters, influencing academic choices, career planning, and even personal whether it's resisting one's impulse purchases, avoiding student loan traps, or understanding the long-term benefits of compounding, financially literate students are smarter and make practical life decisions. It also helps them navigate life's uncertainties and seize opportunities that align with their OF A STRONGER ECONOMYTo become a global economic leader, India needs to rely on its youth. It's important to empower them with financial knowledge, as it is not just a personal benefit, it's a strategic imperative. If every student leaves school with a working knowledge of personal finance, India's next generation of professionals, entrepreneurs, and policymakers will be better equipped to fuel inclusive and sustainable literacy is about building a life of choices, resilience and opportunity. It's imperative for students to get exposed to real-world financial concepts. Awareness about finances will help them handle the demands of adulthood and schools must take the lead to make this possible. A nation that has integrated practical finance into everyday learning will create a generation that's not just academically bright, but also financially empowered.- Ends
Economic Times
4 hours ago
- Economic Times
"ChatGPT is not a diary, therapist, lawyer, or friend": LinkedIn user warns against oversharing everything with AI
ChatGPT users are being warned to think twice before typing anything personal into the chatbot. OpenAI CEO Sam Altman recently confirmed that interactions with ChatGPT aren't protected by confidentiality laws. Conversations you assume are private may be stored, reviewed, and even presented in court — no matter how sensitive, emotional or casual they seem.'If you go talk to ChatGPT about your most sensitive stuff and then there's like a lawsuit or whatever, we could be required to produce that, and I think that's very screwed up,' Altman said in an interview on the This Past Weekend podcast. He added, 'We should have, like, the same concept of privacy for your conversations with AI that we do with a therapist or whatever.'But as of now, that legal framework doesn't explained, 'Right now, if you talk to a therapist or a lawyer or a doctor about those problems, there's legal privilege for it. There's confidentiality. We haven't figured that out yet for ChatGPT.'This sharp warning is echoed by Shreya Jaiswal, a Chartered Accountant and founder of Fawkes Solutions, who posted her concerns on LinkedIn. Her message was blunt and alarming. 'ChatGPT can land you in jail. No, seriously. Not even joking,' she to Jaiswal, Altman's own words spell out the legal dangers. 'Sam Altman – the CEO of OpenAI, literally said that anything you type into ChatGPT can be used as evidence in court. Not just now, even months or years later, if needed. There's no privacy, no protection, nothing, unlike talking to a real lawyer or therapist who is sworn to client confidentiality.'She laid out a few scenarios that, while hypothetical, are disturbingly someone types: 'I cheated on my partner and I feel guilty, is it me or the stars that are misaligned?' Jaiswal pointed out how this could resurface in a family court battle. 'Boom. You're in court 2 years later fighting an alimony or custody battle. That chat shows up. And your 'private guilt trip' just became public proof.' Even seemingly harmless curiosity can be risky. 'How do I save taxes using all the loopholes in the Income Tax Act?' or 'How can I use bank loans to become rich like Vijay Mallya?' could be interpreted as intent during a future audit or legal probe. 'During a tax audit or loan default, this could easily be used as evidence of intent even if you never actually did anything wrong,' she warned. In another example, she highlighted workplace risk. 'I'm thinking of quitting and starting my own company. How can I use my current company to learn for my startup?' This, she argued, could be used against you in a lawsuit for breach of contract or intellectual property theft. 'You don't even need to have done anything. The fact that you thought about it is enough.'Jaiswal expressed concern that people have become too casual, even intimate, with AI tools. 'We've all gotten way too comfortable with AI. People are treating ChatGPT like a diary. Like a best friend. Like a therapist. Like a co-founder.''But it's none of those. It's not on your side, it's not protecting you. And legally, it doesn't owe you anything.'She closed her post with a simple piece of advice: 'Let me make this simple – if you wouldn't say it in front of a judge, don't type it into ChatGPT.'And her final thought was one that many might relate to: 'I'm honestly scared. Not because I have used ChatGPT for something I shouldn't have. But because we've moved too fast, and asked too few questions, and continue to do so in the world of AI.'These concerns aren't just theory. In a 2024 bankruptcy case in the United States, a lawyer submitted a legal brief that cited fake court cases generated by ChatGPT. The judge imposed a fine of $5,500 and ordered the lawyer to attend an AI ethics session. — slow_developer (@slow_developer) Similar disciplinary actions were taken against lawyers in Utah and Alabama who relied on fabricated AI-generated incidents have underscored a critical truth: AI cannot replace verified legal research or professional advice. It can mislead, misrepresent, or completely fabricate information — what researchers call "AI hallucinations".Altman also flagged a worrying trend among younger users. Speaking at a Federal Reserve conference, he said, 'There are young people who say, 'I can't make any decision in my life without telling ChatGPT everything that's going on. It knows me. I'm going to do whatever it says.' That feels really bad to me.'He's concerned that blind faith in AI could be eroding people's ability to think critically. While ChatGPT is programmed to provide helpful answers, Altman stressed it lacks context, responsibility, and real emotional advice is straightforward, and it applies to everyone: Don't use ChatGPT to confess anything sensitive, illegal or personal Never treat it as a lawyer, therapist, or financial advisor Verify any factual claims independently Use AI to brainstorm, not to confess And most importantly, don't say anything to a chatbot that you wouldn't be comfortable seeing in court While OpenAI claims that user chats are reviewed for safety and model training, Altman admitted that conversations may be retained if required by law. Even if you delete a conversation, legal demands can override those actions. With ongoing lawsuits, including one from The New York Times, OpenAI may soon have to store conversations indefinitely. For those looking for more privacy, Altman suggested considering open-source models that can run offline, like GPT4All by Nomic AI or Ollama. But he stressed that what's needed most is a clear legal framework.'I think we will certainly need a legal or a policy framework for AI,' he then, treat your chats with caution. Because what you type could follow you — even years later.
