In this guide
ITR-2 is for individuals and Hindu Undivided Families (HUFs) who have income that is not chargeable under “Profits and Gains of Business or Profession” and who cannot use ITR-1. It may include salary or pension, house property, capital gains, other sources and certain foreign income or assets.
For AY 2026-27, ITR-2 reports income earned from 1 April 2025 to 31 March 2026, which is FY 2025-26. This return continues to be governed by the Income-tax Act, 1961. Do not confuse AY 2026-27 with Tax Year 2026-27, which relates to income earned from 1 April 2026 onwards under the Income-tax Act, 2025.
ITR-2 is not restricted to resident individuals. It can also be used by non-resident individuals and HUFs, provided they meet the form’s conditions. Residential status affects which income and foreign-asset information must be reported. Check your status for FY 2025-26 before preparing the return.
Who can file ITR-2 for AY 2026-27?
If you are an individual or HUF with income from one or more of the following sources, and you do not have income chargeable under “Profits and Gains of Business or Profession,” ITR-2 may apply:
- Salary or pension.
- Income from one or more house properties, including more than two.
- Short-term or long-term capital gains.
- Other income, including interest, dividends, family pension, lottery winnings, racehorse income, betting or gambling winnings.
- Agricultural income above ₹5,000.
- Foreign income or assets, where the relevant reporting rules apply.
There is no ₹50 lakh total-income limit for ITR-2. It may also be required for an individual who was a company director or held unlisted equity shares during the previous year, even if their other income is straightforward.
ITR-1, ITR-2 or ITR-3?
The right form depends on your income sources and eligibility, not just your total income.
| Form | Typical use |
|---|---|
| ITR-1 | Eligible resident individuals with relatively simple income, subject to the form’s limits and exclusions |
| ITR-2 | Individuals and HUFs without business or professional income who cannot use ITR-1 |
| ITR-3 | Individuals and HUFs with business or professional income, including presumptive income where ITR-4 is not applicable |
For example, a resident individual with salary and eligible section 112A gains up to ₹1.25 lakh may qualify for ITR-1 if all other conditions are met. ITR-2 may be required if the individual has short-term capital gains, is a company director, holds unlisted shares, has income above the ITR-1 limit or meets another ITR-1 exclusion.
The TaxClear guide to filing ITR online for AY 2026-27 explains how to select from the common forms.
Who cannot file ITR-2?
ITR-2 is not applicable if you have income chargeable under “Profits and Gains of Business or Profession.” This includes income from a proprietorship, freelance or professional work, or presumptive business income. ITR-3 is generally the relevant form for individuals and HUFs with such income.
A partner’s share of profit from a firm is generally not taxable in the partner’s hands. However, interest, salary, bonus, commission or remuneration from the firm may be taxable as business income. If you received such amounts, check whether ITR-3 is required.
Do not choose ITR-2 just because most of your income is salary or capital gains. One item of business income can change which form applies.
Schedules in ITR-2: what you may need to complete
The AY 2026-27 ITR-2 has schedules for different income sources, deductions, losses, assets and taxes paid. Complete only the schedules that apply to your circumstances. Check prefilled information against your records.
| Schedule or section | What it covers |
|---|---|
| Part A – General | Personal information, filing status, residential status and bank details |
| Schedule Salary | Salary, pension, allowances and related deductions |
| Schedule HP | Income or loss from house property |
| Schedule CG | Short-term and long-term capital gains or losses |
| Schedule 112A | Eligible gains from equity shares, equity-oriented funds and business trust units |
| Schedule VDA | Income from transfers of virtual digital assets, including crypto assets |
| Schedule OS | Other income, such as interest, dividends and family pension |
| Schedules CYLA, BFLA and CFL | Current-year loss adjustments, brought-forward losses and losses to carry forward |
| Schedules VI-A, 80G and 80GGA | Eligible deductions and donations, subject to the tax regime and claim conditions |
| Schedules FSI and TR | Foreign-source income and relief for tax paid outside India, where applicable |
| Schedule FA | Specified foreign assets and accounts that must be disclosed |
| Schedule AL | Specified assets and liabilities when the applicable total-income threshold is crossed |
| Part B – TI, Tax Paid and Part B – TTI | Total income, taxes already paid and final tax calculation |
Salary and house-property income
Use Schedule Salary for salary or pension details. Compare the figures with Form 16, AIS and Form 26AS. Report taxable allowances or perquisites that are missing or incorrectly shown in the prefilled return.
Schedule HP covers self-occupied, let-out or deemed let-out property. Keep rental details, municipal taxes paid, co-owner information and home-loan interest certificates. If you have multiple properties, report each in the relevant schedule and check how the selected tax regime treats related deductions or losses.
Capital gains and virtual digital assets
Schedule CG covers gains or losses from assets such as shares, mutual funds, land, buildings, gold and other capital assets. Use Schedule 112A for eligible listed equity shares, equity-oriented funds or business trust units.
The AY 2026-27 form no longer requires the earlier split of certain capital gains into transfers before and after 23 July 2024. Calculate each gain under the rules that apply to the asset and transaction. Keep contract notes, broker statements, purchase dates, sale proceeds and cost details.
Schedule VDA asks for information on virtual digital asset transfers. Collect transaction-level details from exchanges or wallets, including dates, values and tax deducted at source. An asset that was held but not transferred is different from income arising from a transfer, but good records help with reporting and tax-credit reconciliation. See TaxClear’s crypto tax and ITR reporting guide for AY 2026-27 for more on VDA reporting.
Losses, foreign income and assets
Schedules CYLA, BFLA and CFL cover current-year loss adjustments, losses from previous years and losses to carry forward. Before claiming a brought-forward loss, review earlier returns and acknowledgements. The type of loss, the year it arose and your filing history can affect whether it can be set off or carried forward.
Specified foreign income and assets may need to be reported in Schedules FSI, TR and FA if you are resident and ordinarily resident in India. A non-resident or resident but not ordinarily resident generally does not need to complete Schedule FA, but foreign income may still need to be reported under the applicable rules. Determine your residential status before deciding which foreign schedules apply.
If your total income exceeds ₹1 crore, Schedule AL must be completed under the AY 2026-27 form instructions. It requests details of specified movable and immovable assets and related liabilities. Non-residents and resident but not ordinarily resident taxpayers generally report only assets located in India in this schedule. TaxClear’s Schedule AL guide explains the threshold and disclosures.
Tax regime option for ITR-2
The new tax regime is the default for AY 2026-27. If you want to use the old regime, choose the applicable option in the return by the section 139(1) due date. Taxpayers without business or professional income can generally choose a regime each year, subject to the rules for that year.
Compare the regimes using your income and eligible deductions. The new regime restricts some deductions available under the old regime. Your employer’s withholding selection and the final calculation in your return are different, so do not assume that the regime selected for withholding is necessarily the best choice for your return.
For most ITR-2 filers, the due date was 31 July 2026. If you are filing after that date, do not assume you can newly opt out of the default regime through a belated return.
ITR-2 deadline and late returns
The due date for most individuals and HUFs filing ITR-2 for AY 2026-27 was 31 July 2026. The later 31 August deadline applied to specified non-audit business or professional cases and trusts, not ordinary ITR-2 filers. The extension in CBDT Circular No. 07/2026 applies to a specified category of taxpayers; it did not extend the usual ITR-2 deadline.
A belated return can generally be filed by 31 December 2026 or before assessment is completed, whichever is earlier. A late filing fee under section 234F may apply: ₹1,000 if total income does not exceed ₹5 lakh and ₹5,000 in other cases. Interest may also apply if tax was due.
For AY 2026-27, a revised return can generally be filed up to 31 March 2027 or before assessment is completed, whichever is earlier. If you file a revised return after 31 December 2026, an additional fee under section 234-I may apply: ₹1,000 if total income does not exceed ₹5 lakh and ₹5,000 in other cases.
Filing late can affect whether some losses may be carried forward. If you are filing late and have capital or other losses, review the applicable rules before submitting.
Documents to collect before filing
Gather and reconcile the information relevant to your income:
- PAN, Aadhaar, contact information and bank-account details.
- Salary or pension records and Form 16.
- TDS certificates, including Form 16A, Form 26AS, AIS and TIS.
- Bank and deposit statements for interest income.
- Rent, municipal-tax and home-loan records for house-property income.
- Broker statements, contract notes and purchase or sale records for capital gains.
- Exchange or wallet transaction records and TDS information.
- Earlier ITR acknowledgements and loss schedules, if claiming brought-forward losses.
- Foreign income, tax-payment and asset information, if applicable.
- Receipts and supporting information for deductions or donations claimed.
Prefilled data may be missing or misclassified. Check it against your own records and correct discrepancies before filing. Supporting documents are not normally attached to the return, but keep them in case the department requests them.
How to file ITR-2 online
The portal offers online filing and may also provide an offline utility. The online process generally follows these steps:
- Log in to the Income Tax e-Filing portal.
- Select e-File → Income Tax Returns → File Income Tax Return.
- Choose Assessment Year 2026-27. This return is for FY 2025-26.
- Select your taxpayer status and choose ITR-2.
- Verify your personal information, residential status, filing section and bank accounts.
- Review prefilled salary, interest, tax-payment and TDS information. Add missing income and correct inaccurate details.
- Complete the schedules that apply: salary, house property, capital gains, VDA, other sources, deductions, losses or foreign income and assets.
- Choose the tax regime and check any eligibility or deduction restrictions.
- Review the total-income computation, tax calculation, TDS credits, advance tax and self-assessment tax. Pay any balance due and enter the challan details.
- Validate and submit the return, then e-verify it within 30 days. If you do not verify within the prescribed period, the return may be treated as invalid unless the prescribed process is followed.
Portal screens may change. Follow the instructions shown for AY 2026-27 during filing.
Common ITR-2 mistakes
- Choosing ITR-2 despite having business, professional or presumptive income.
- Filing ITR-2 just because salary is the primary income and overlooking capital gains or other form requirements.
- Failing to reconcile Form 16, AIS and Form 26AS.
- Omitting a house property, dividend, interest or other taxable income.
- Using an incorrect purchase cost, sale proceeds or dates for capital-gains calculations.
- Omitting VDA transfers or related TDS.
- Claiming an earlier-year loss without checking eligibility and carry-forward rules.
- Skipping foreign schedules without checking residential status and disclosure requirements.
- Missing Schedule AL when the income threshold is crossed.
- Submitting the return but failing to e-verify it.
Examples
Salary and share sales: A resident employee has salary and short-term gains from listed shares, with no business income. ITR-1 may not be available because of the capital gains, so ITR-2 may be suitable if the other conditions are met.
Rental income and several properties: An individual has salary and rental income from three properties. The income can be reported in ITR-2 if there is no income under the business or profession head.
Consulting fees: A salaried person also earns fees for consulting work. If the consulting income is taxable as business or professional income, ITR-2 is generally not the appropriate form and ITR-3 may be required.
Foreign shares: A resident and ordinarily resident taxpayer owns foreign shares and earns dividends. The taxpayer should check Schedule FA, foreign-income reporting and any available foreign-tax relief, in addition to reporting the dividend income.
FAQs
Can I file ITR-2 if my total income is more than ₹50 lakh?
Yes. ITR-2 has no ₹50 lakh total-income ceiling, but its other eligibility conditions still apply.
Can a non-resident file ITR-2?
Yes. Individuals, including non-residents, and HUFs may file ITR-2 if they do not have income chargeable under the business or profession head. Residential status affects reporting.
Can I file ITR-2 if I have capital gains?
Yes. ITR-2 covers short-term and long-term capital gains, including applicable VDA reporting, but not business or professional income that requires another form.
Do I need ITR-2 if I hold shares in a Demat account?
Not just because you hold listed shares. Capital gains, a director position, unlisted shares or another ITR-1 exclusion may make ITR-2 applicable.
Can I file ITR-2 after 31 July 2026?
A belated return can generally be filed by 31 December 2026 or before assessment is completed, whichever is earlier. Late fees and interest may apply.
