ITR-2 Explained: Who Must File It, Schedules for Capital Gains, Foreign Assets and NRIs (AY 2026-27)
ITR-2 is the return for individuals and HUFs who have no income from business or profession but do not fit ITR-1: capital gains from shares, mutual funds, property or crypto, more than one house property, income above ₹50 lakh, foreign assets or foreign income, NRI or RNOR status, a directorship, unlisted shares, or losses to carry forward. It is due on 31 July 2026 for AY 2026-27 and has no profit and loss account.
Key facts, FY 2025-26
- Who
- Individuals and HUFs without income from business or profession
- Triggers
- Capital gains, more than one house, income above ₹50 lakh, foreign assets or income, NRI or RNOR, director, unlisted shares, crypto, lottery winnings, losses to carry forward
- Key schedules
- S, HP, CG, 112A, OS, VDA, CFL, FA, FSI, TR, AL
- Due date
- 31 July 2026; belated or revised until 31 December 2026
- Loss carry forward
- Only if the original return is filed by 31 July 2026
- Not for
- Anyone with business or professional income including F&O or intraday, or partners of firms: file ITR-3
What it is
ITR-2 covers every kind of income an individual can have except business and profession. Where ITR-1 has a single line for salary and a single house, ITR-2 carries full schedules: multiple employers in Schedule S, several properties in Schedule HP, and the complete capital gains machinery in Schedule CG with separate blocks for listed equity (112A), other long-term assets, short-term assets and property.
It is also the form for anyone with a foreign connection. Non-residents report their Indian income here. Residents with foreign bank accounts, foreign stocks, ESOPs of a foreign parent or overseas property must fill Schedule FA, and those with foreign income and tax paid abroad claim DTAA relief through Schedules FSI and TR.
For FY 2025-26 all gains are taxed at the post-23 July 2024 rates: 20% on short-term equity gains under 111A, 12.5% on long-term equity gains above ₹1.25 lakh under 112A, 12.5% on long-term property gains without indexation (or 20% with indexation for property bought before 23 July 2024, if lower), and slab rate on short-term property and debt fund gains.
When ITR-2 is the right form
| Situation | ITR-2 schedule | Instead of |
|---|---|---|
| Sold shares, mutual funds or property during FY 2025-26 | Schedule CG, Schedule 112A | ITR-1 (only tiny 112A gains allowed there) |
| Two or more house properties | Schedule HP | ITR-1 |
| Total income above ₹50 lakh | Whole form; Schedule AL if above ₹1 crore | ITR-1 |
| NRI or RNOR | Residential status block, Schedule OS and CG | ITR-1 |
| Foreign bank account, foreign stocks, RSUs of a foreign parent | Schedule FA, Schedule FSI, Schedule TR | ITR-1 |
| Director of a company or unlisted shares held | Part A general information | ITR-1 |
| Crypto or NFT gains | Schedule VDA, taxed at 30% | ITR-1 |
| Losses to carry forward or set off | Schedule CFL, Schedule BFLA | ITR-1 |
| Lottery, game show or online gaming winnings | Schedule OS, taxed at 30% | ITR-1 |
| Any business or professional income, F&O, intraday, partner remuneration | Not available | Use ITR-3 |
How to file ITR-2
- Download the capital gains statement from each broker and mutual fund RTA (CAMS and KFintech), the property sale deed with the purchase deed and improvement bills, Form 16, Form 26AS and AIS.
- On the e-filing portal, start a new return for AY 2026-27, choose Individual, then ITR-2. Online mode works for most; the offline utility helps if you have hundreds of trades to import.
- Fill Schedule S from Form 16, Schedule HP for each property with the tenant's PAN if rent exceeds ₹1 lakh a year, and Schedule OS for interest and dividend.
- Fill Schedule 112A trade-wise or upload the broker CSV; fill the rest of Schedule CG with dates, cost and sale value. Enter section 54 or 54F exemption claims and Capital Gains Account Scheme deposits where applicable.
- Fill Schedule FA for foreign assets held at any time during the calendar year 2025, Schedule VDA for crypto, and Schedule CFL to carry forward losses.
- Check Schedule TDS against Form 26AS, pay any self-assessment tax, preview, submit and e-verify within 30 days.
Worked example: Salaried investor with equity gains in FY 2025-26
- Salary
- ₹14,00,000
- Short-term gains on listed shares (held under 12 months)
- ₹1,20,000
- Long-term gains on equity mutual funds (held over 12 months)
- ₹3,00,000
- Tax on STCG at 20% under 111A
- ₹24,000
- Tax on LTCG: (₹3,00,000 minus ₹1,25,000 exemption) at 12.5%
- ₹21,875
- Capital gains tax before cess, on top of slab tax on salary
- ₹45,875
Common mistake: leaving Schedule FA blank because the foreign asset is small
Schedule FA has no minimum threshold. A dormant foreign bank account with a few dollars, vested RSUs of a US parent sitting in a foreign brokerage, or a foreign pension account all need to be reported for the calendar year 2025. Non-disclosure attracts a penalty of ₹10 lakh under the Black Money Act (except for accounts with an aggregate balance under ₹20 lakh), and the department now receives this data automatically under CRS and FATCA.
What to do next
Reconcile the broker statements with the securities entries in AIS; the AIS shows sale value, not gains, so differences are expected but every sale should be accounted for. File by 31 July 2026 to preserve loss carry forward. If you have foreign assets or DTAA claims, consider having the return reviewed by a qualified professional (CMA/CA): Schedule FA and Schedule TR are where most ITR-2 notices come from.
ITR-2: questions
Who should file ITR-2?
Individuals and HUFs who have no business or professional income but have capital gains, more than one house property, income above ₹50 lakh, foreign assets or income, NRI or RNOR status, a directorship, unlisted shares, crypto gains, lottery winnings or losses to carry forward. If you have business income on top of any of these, file ITR-3.
What is the difference between ITR-2 and ITR-3?
ITR-3 has everything ITR-2 has plus the business and profession schedules: profit and loss account, balance sheet, presumptive income, audit details and partner remuneration. F&O and intraday trading count as business, so traders use ITR-3.
Can I file ITR-2 if I only have salary income?
Yes. ITR-2 is a superset of ITR-1, so a salaried person with no other income may use it, and must use it if income exceeds ₹50 lakh, they are a director, hold unlisted shares or are not ordinarily resident.
Which ITR form should an NRI file?
ITR-2 if the Indian income is from salary, house property, capital gains or other sources such as NRO interest. ITR-3 if there is business or professional income in India. NRIs cannot use ITR-1 or ITR-4.
Do I need to report foreign assets in ITR-2?
Yes, in Schedule FA, if you are a resident and ordinarily resident and held any foreign asset at any time during the calendar year 2025: bank accounts, shares, RSUs, ESOPs, property, insurance or pension accounts. Non-residents and RNORs do not fill Schedule FA.
What is the due date for ITR-2 for AY 2026-27?
31 July 2026 for individuals not subject to audit. A belated return can be filed until 31 December 2026 with a 234F fee, but capital losses cannot be carried forward from a belated return.
Is Schedule AL mandatory in ITR-2?
Schedule AL (assets and liabilities) is required when total income exceeds ₹1 crore, a threshold raised from ₹50 lakh in the forms notified for AY 2025-26. It asks for the cost of immovable property, jewellery, vehicles, bank balances, shares and loans as on 31 March 2026.
Related forms and sections
- ITR-1 (Sahaj)ITR-1, called Sahaj, is the one-page return for ordinarily resident individuals with total income up to ₹50 lakh from salary or pension, one house property, other sources such as interest, agricultural income up to ₹5,000, and long-term capital gains under section 112A of up to ₹1.25 lakh. It cannot be used by NRIs, company directors, holders of unlisted shares, anyone with business income, foreign assets, more than one house or capital gains beyond that allowance. The due date for AY 2026-27 is 31 July 2026.
- ITR-3ITR-3 is the return for individuals and HUFs who have income from a business or profession, including F&O and intraday trading, freelancing with books of account, proprietorships and partners receiving remuneration or interest from a firm. It contains every schedule in ITR-2 plus a profit and loss account, balance sheet and the tax audit fields. For AY 2026-27 it is due on 31 July 2026, or 31 October 2026 where a section 44AB audit applies.
- Section 54Section 54 exempts long-term capital gains from the sale of a residential house if you buy another residential house in India within 1 year before or 2 years after the sale, or construct one within 3 years. The exemption is the lower of the gain and the cost of the new house, capped at ₹10 crore. Unused gain must be parked in a Capital Gains Account Scheme deposit before the return due date. Section 54F does the same for other assets but requires the full net sale consideration to be reinvested, and section 54EC allows up to ₹50 lakh in specified bonds within 6 months.
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General information for FY 2025-26, not professional advice. Limits and dates change with each Budget; the updated date above is when this page was last checked. Disclaimer