Who Should File ITR-2?
For AY 2026-27, ITR-2 is applicable to individuals and HUFs who do not have income chargeable under business or profession. It can cover salary/pension, house property, capital gains and other sources, including certain higher-complexity cases.
Common ITR-2 Situations
- Capital gains from shares, mutual funds or other investments.
- More than two house properties.
- Total income above ₹50 lakh.
- Being a company director.
- Holding unlisted equity shares.
- Foreign assets, foreign income or foreign financial interests.
- Agricultural income above ₹5,000, subject to the form rules.
How to File ITR-2
- Sign in to the e-Filing portal.
- Select ITR-2 and AY 2026-27 when filing FY 2025-26 income.
- Review pre-filled personal and income information.
- Enter capital gains and other schedules carefully.
- Validate, submit and e-verify.
Who Can File ITR-2?
ITR-2 is intended for eligible individuals and HUFs who have income that cannot be reported through the simpler returns but who do not have the type of business or professional income that requires ITR-3. The Income Tax Department states that ITR-2 can be filed irrespective of total income, including cases where total income exceeds ₹50 lakh.
Important ITR-2 Situations
ITR-2 can apply to taxpayers with specified capital gains, more than one house property, foreign assets or income, certain director or unlisted-share situations and other circumstances covered by the form. The exact eligibility should be checked for the assessment year.
Who Should Not Use ITR-2?
The Income Tax Department states that ITR-2 cannot be used where total income includes profit and gains from business or profession, including specified salary, bonus, commission or remuneration from a firm that is taxable under that head. Such taxpayers may need ITR-3 or another applicable return.
Capital Gains in ITR-2
Capital-gain reporting can require information such as the type of asset, purchase and sale dates, cost, sale consideration and resulting gain or loss. Shares and mutual funds may require statements from brokers or fund platforms. Property transactions can require sale and purchase documentation and other supporting records.
Foreign Assets and Foreign Income
Foreign bank accounts, investments, income and other reportable assets can trigger additional disclosure requirements. Do not omit foreign information simply because no tax was deducted in India. Cross-border reporting has its own rules and should be reviewed carefully.
Director and Unlisted Share Conditions
The Income Tax Department’s current ITR-2 guidance identifies company directors and holders of unlisted equity shares as situations that can require ITR-2, subject to the other eligibility conditions. This is one reason form selection should be based on the taxpayer’s complete profile.
Documents to Prepare for ITR-2
- Form 16 and salary records, if salaried
- Broker and mutual-fund capital-gain statements
- Property purchase and sale documents where relevant
- Foreign income and asset statements, if applicable
- Bank interest and dividend records
- AIS, TIS and Form 26AS
- Records supporting eligible deductions and tax payments
ITR-2 Filing Workflow
- Confirm ITR-2 eligibility for the assessment year.
- Collect income, tax-credit and asset information.
- Review pre-filled data and reconcile it with your records.
- Complete the relevant schedules, including capital gains or foreign information where applicable.
- Review the tax calculation and claims.
- Submit the return and complete e-verification.
FAQs
ITR-2 and Capital Gains
ITR-2 contains schedules for reporting capital gains and other information that is not covered by the simpler ITR-1. If you sold shares, mutual funds, property or other capital assets, use your broker, AMC or transaction statement rather than guessing the figures.
Foreign Income and Assets
Foreign accounts, investments and income can create additional reporting obligations. Do not omit them simply because the amount is small. Review the applicable schedule and disclosure rules carefully.
ITR-2 Does Not Mean Business Income
If you have taxable business or professional income, ITR-2 is not the right form. The correct return depends on the nature of that income and the applicable presumptive-tax provisions.