ITR-2 vs ITR-3 for FY 2025-26: the new perquisite reporting fields and selection logic

The CBDT notified ITR forms for AY 2026-27 on May 7, 2026 ahead of the July 31, 2026 filing deadline. The headline change is expanded perquisite reporting in Schedule S.

ITR-2 applies to individuals and HUFs with salary, house property, capital gains, foreign assets, and other sources but NOT business income. ITR-3 applies when you have any business income including freelance consulting, F and O trading, intraday equity trading, and partnership remuneration. A salaried employee with 2 lakh of freelance income cannot file ITR-2.

The new perquisite reporting in Schedule S requires per-employer breakdown of monetary perquisites under Section 17(2)(iii), accommodation benefits under the new Rule 3 methodology, motor car and conveyance, ESOP allotment with valuation method dropdown, and reimbursements treated as perquisites.

Schedule FA now requires reporting of foreign cryptocurrency holdings and foreign digital asset wallets. Non-reporting attracts 10 lakh penalty under Black Money Act Section 42 plus prosecution risk.

The new tax regime defaults under Section 115BAC continue to be the principal source of filing errors. Taxpayers wanting the old regime must explicitly tick the option in Part A. Default is the new regime and a return without explicit election locks the taxpayer in.

Capital gains reflect indexation removal for property sales after July 23, 2024 with the new 12.5 percent flat rate alongside legacy 20 percent with indexation at the taxpayer option.

KAMRIT Direct Tax desk handles ITR-2 and ITR-3 preparation including perquisite breakdown, Schedule FA disclosure, and regime modelling.