diff --git a/hledger-lib/Hledger/Read/JournalReader.hs b/hledger-lib/Hledger/Read/JournalReader.hs
index ec967576e..9ee975d99 100644
--- a/hledger-lib/Hledger/Read/JournalReader.hs
+++ b/hledger-lib/Hledger/Read/JournalReader.hs
@@ -319,7 +319,7 @@ includedirectivep iopts = do
     ) <|> errorNoArg
 
   let (mprefix,glb) = splitReaderPrefix prefixedglob
-  parentf <- sourcePosFilePath pos   -- a little slow, don't do too often
+  parentf <- sourcePosFilePath pos
   when (null $ dbg6 (parentf <> " include: glob pattern") glb) errorNoArg
 
   -- Find the file or glob-matched files (just the ones from this include directive), with some IO error checking.
@@ -379,7 +379,8 @@ includedirectivep iopts = do
       expandedglob <- lift $ expandHomePath globpattern & handleIOError off "failed to expand ~"
 
       -- get the directory of the including file
-      let cwd = takeDirectory parentf
+      -- need to canonicalise a symlink parentf so takeDirectory works correctly [#2503]
+      cwd <- fmap takeDirectory <$> liftIO $ canonicalizePath parentf
 
       -- Don't allow 3 or more stars.
       when ("***" `isInfixOf` expandedglob) $
diff --git a/hledger/test/journal/include/include.test b/hledger/test/journal/include/include.test
index 48e1a930f..20b75dd17 100644
--- a/hledger/test/journal/include/include.test
+++ b/hledger/test/journal/include/include.test
@@ -177,7 +177,6 @@ $  touch /tmp/unreadable.$$ && chmod -r /tmp/unreadable.$$ && hledger -f /tmp/un
 #
 # My ~/.hledger.journal is a symlink to .etc/.hledger.journal
 
-# ** 21. But I did find this possibly related regression in 1.50.4 & 1.51:
-# Failing test:
-# $ hledger -f symlink-to-relative-include.j files
-# > //
+# ** 21. But I did find this possibly related regression in 1.50.4 & 1.51 [#2503].
+$ hledger -f symlink-to-relative-include.j files
+> //