Last updated: June 2026 | Reviewed by the Tax Compliance Team

ITR-2 is an Income Tax Return form prescribed for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession but earn income from salary, multiple house properties, capital gains, foreign assets, foreign income, or other taxable sources. For Assessment Year (AY) 2026-27, taxpayers must carefully select the correct ITR form. This comprehensive guide explains everything you need to know about ITR-2, including eligibility, required documents, capital gains reporting, foreign asset disclosures, and the complete online filing process.

What is ITR-2?

ITR-2 is a detailed income tax return form designed for taxpayers whose financial affairs are more complex than those eligible for ITR-1. It allows reporting of salary income, pension income, income from multiple house properties, capital gains, foreign assets, foreign income, agricultural income above specified limits, and income from other sources.

Purpose of ITR-2: The primary objective of ITR-2 is to enable accurate reporting of income and disclosures that cannot be accommodated in simpler forms like ITR-1.

Who Should Use ITR-2?

• Salaried individuals with capital gains
• Investors in shares and mutual funds
• Property owners with multiple houses
• Non-Resident Indians (NRIs)
• Individuals holding foreign assets
• HUFs without business income

Key Features of ITR-2

• Detailed capital gains reporting
• Foreign asset disclosure schedules
• Multiple property reporting
• Residential status disclosures
• Carry-forward of losses
• Reporting of exempt income

Who Can File ITR-2?

Understanding ITR-2 eligibility is essential before filing your return. The following taxpayers can generally use ITR-2:

• Resident Individuals: With income sources covered under ITR-2.
• Non-Resident Individuals (NRIs): NRIs who earn taxable income in India can file ITR-2, provided they do not have business or professional income requiring ITR-3.
• Hindu Undivided Families (HUFs): HUFs without business or professional income.
• Taxpayers with Capital Gains: Individuals earning gains from equity shares, mutual funds, bonds, debentures, property sales, gold, and other assets.
• Multiple House Properties: Taxpayers owning more than one house property.
• Foreign Income or Assets: Disclosure of overseas bank accounts, stocks, mutual funds, properties, and other investments.
• Agricultural Income: Taxpayers with agricultural income exceeding ₹5,000.

Who Cannot File ITR-2?

• Individuals with Business Income: Earning from proprietorship businesses, freelancing, consultancy, or professional practice (must generally file ITR-3).
• Taxpayers Eligible for ITR-1: Income up to ₹50 lakh, salary/pension income, one house property, and no capital gains.
• Presumptive Taxation Cases: Covered under Section 44AD, 44ADA, and 44AE (typically use ITR-4).

Income Sources Covered Under ITR-2

The following income categories can be reported under ITR-2:

• Salary and Pension Income: Includes basic salary, bonus, allowances, gratuity, and pension.
• Income from More Than One House Property: Self-occupied, let-out, or deemed let-out properties.
• Capital Gains: Gains from equity shares, mutual funds, bonds, property sales, gold, and securities.
• Income from Other Sources: Savings/FD interest, family pension, dividend income, and interest on tax refunds.
• Foreign Income: Foreign salary, rent, overseas investments, and foreign dividends.
• Agricultural Income: Exceeding prescribed thresholds.

Documents Required for ITR-2 Filing

Before starting the filing process, keep all documents ready. Important Tip: Always reconcile Form 16, Form 26AS, AIS, and TIS before submitting the return.

Step-by-Step Process to File ITR-2 Online

Many taxpayers wonder how to file ITR-2 online. Follow these steps:

1. Step 1: Visit the Portal — Open the official Income Tax e-Filing website.
2. Step 2: Login — Enter your PAN, Password, and OTP (if required).
3. Step 3: Select Assessment Year — Choose AY 2026-27.
4. Step 4: Select Filing Mode — Choose online filing mode.
5. Step 5: Select Form — Choose ITR-2 from the available forms.
6. Step 6: Personal Information — Verify Name, PAN, Aadhaar, Residential status, Address, and Contact details.
7. Step 7: Report Income — Enter Salary income, House property income, Capital gains, Other income, and Foreign income.
8. Step 8: Enter Deductions — Claim eligible deductions under Section 80C, 80CCD, 80D, 80G, 80TTA, and 80TTB.
9. Step 9: Report Capital Gains — Carefully disclose STCG, LTCG, Property gains, and Mutual fund gains.
10. Step 10: Verify Tax Liability — Review Tax payable, Refund amount, and TDS credits.
11. Step 11: Submit Return — Validate and submit.
12. Step 12: E-Verify Return — Verify using Aadhaar OTP, Net Banking, Bank account EVC, or Demat account EVC. The return is treated as filed only after successful verification.

Capital Gains & Foreign Assets Reporting

Capital Gains Reporting

Short-Term Capital Gains (STCG): Generally arises when assets are sold within the prescribed holding period. Examples include shares sold within a short-term holding period and property sold within a specified duration.
Long-Term Capital Gains (LTCG): Arises when assets are held beyond prescribed limits. Examples include long-term equity investments and property held for several years.
Equity Shares and Mutual Funds: Investors must report Purchase value, Sale value, Holding period, and Taxable gain.
Property Sales: Disclose Sale consideration, Cost of acquisition, Indexed cost where applicable, and Exemptions claimed. Incorrect calculations are among the most common reasons for notices.

Foreign Assets and Foreign Income

When Disclosure is Mandatory: Disclosure is required when taxpayers hold Foreign bank accounts, Foreign shares, Foreign mutual funds, Overseas property, and Foreign insurance products.
Foreign Income Reporting: Taxpayers must disclose Foreign salary, Rental income, Dividends, and Interest income.
Common Mistakes: Omitting dormant foreign accounts, reporting incomplete values, ignoring foreign dividends, and missing disclosure schedules. Foreign asset reporting is heavily scrutinized, so accuracy is essential.

Common Mistakes to Avoid While Filing ITR-2

• Incorrect Capital Gains Calculations: Wrong purchase costs or sale values can create tax mismatches.
• Missing Foreign Asset Disclosures: Failure to disclose foreign assets may result in notices and penalties.
• Ignoring AIS and Form 26AS: Always reconcile all reported income.
• Claiming Incorrect Deductions: Maintain supporting documents for every deduction claimed.
• Selecting the Wrong ITR Form: Business income generally requires ITR-3.
• Failure to E-Verify: Unverified returns are considered incomplete.

ITR-2 vs ITR-1 vs ITR-3

Key Difference: ITR-1 is for simple income profiles. ITR-2 is for capital gains, multiple properties, and foreign assets. ITR-3 is for business and professional income.