ITR-2 is the form for salaried people who also have capital gains, more than one property, or foreign income, but no business income. This guide explains who files it and how.
Confirm current-year eligibility and rates on incometax.gov.in before filing.
Who can file ITR-2
ITR-2 is for individuals and HUFs with income from:
- Salary or pension.
- Capital gains from shares, mutual funds or property.
- More than one house property.
- Foreign income or assets.
- Other sources, including higher income than ITR-1 allows.
The key point: ITR-2 covers everything ITR-1 does, plus capital gains and multiple properties, but not business or professional income.
Who cannot file ITR-2
Use a different form if you have:
- Business or professional income. That needs ITR-3.
- Presumptive income under 44AD/44ADA. That is ITR-4.
If your only “extra” income beyond salary is investments and property, ITR-2 is right. If you run a business or freelance with actual accounts, you move to ITR-3.
Handling capital gains
Capital gains are the main reason people file ITR-2, and the trickiest part. You need to:
- Separate short-term and long-term gains.
- Apply the relevant exemptions, such as the LTCG exemption on equity.
- Account for the grandfathering rule on older equity holdings.
Doing this by hand is where filers get stuck. A platform that imports your broker statement classifies gains automatically. See our ClearTax review and, for traders who also do F&O, ClearTax vs Quicko.
Example. Ravi sold shares and mutual funds. On ITR-2 he had to split short-term and long-term gains and apply the LTCG exemption. A filing platform imported his statement and did this for him, turning a confusing task into a few clicks.
What you need
- PAN and Aadhaar (linked)
- Form 16
- Capital gains statement from your broker or registrar
- Form 26AS and AIS
- Details of all house properties
- Proof for deductions
See the full documents required for ITR checklist.
How to file ITR-2
- Reconcile Form 26AS and AIS, including the capital gains data.
- Choose your regime. See old vs new tax regime.
- Enter salary, then capital gains (import the statement on a platform).
- Add property and other income.
- Review, file, and e-verify.
If you are unsure ITR-2 is your form, check which ITR form should I file.
FAQ
Who should file ITR-2?
Individuals with salary plus capital gains, more than one house property, or foreign income, and no business income.
Do I need ITR-2 for capital gains?
Yes, if you have capital gains and no business income. ITR-1 does not allow capital gains.
Can I file ITR-2 if I have business income?
No. Business or professional income requires ITR-3. Presumptive income uses ITR-4.
How do I report capital gains in ITR-2?
Separate short-term and long-term gains and apply exemptions. A platform that imports your broker statement does this automatically.
Is ITR-2 harder than ITR-1?
It has more sections, mainly capital gains, but a platform that reads your statements makes it straightforward.
