Income Tax · ITR-2
How To File ITR 2 Online (India, 2026)
ITR-2 is the return for individuals and HUFs who have income beyond a simple salary, such as capital gains, more than one house property, or foreign income, but no income from a business or profession. It has more schedules than ITR-1, and the capital gains section is where most people get stuck. This guide explains who must use ITR-2, how it differs from ITR-1 and ITR-3, and how to file it online step by step on the income tax portal.
- Who uses ITR-2: individuals and HUFs with capital gains, multiple houses or foreign income, but no business income.
- Not ITR-2: if you have business or professional income, use ITR-3; a simple salary return can use ITR-1.
- Keep ready: Form 16, Form 26AS and AIS, capital gains statements, interest certificates, foreign asset details.
- Where it is filed: online on incometax.gov.in, choosing status individual and form ITR-2.
- Capital gains: schedule CG reports short-term and long-term gains separately; rules were revised recently.
- Complete only on e-verify: the return is not treated as filed until you e-verify within the window.
01Who should use ITR-2
ITR-2 is for individuals and Hindu Undivided Families who do not have income from a business or profession. You generally use ITR-2 if you have any of:
- Capital gains, for example from selling shares, mutual funds or property.
- More than one house property.
- Foreign income or foreign assets, or you are a resident holding assets abroad.
- Salary or pension above the ITR-1 limit, or you are a director or hold unlisted shares.
- Agricultural income above the small-amount limit.
If your income is only salary, one house property and interest, and within the limit, ITR-1 is simpler. If you also have business or professional income, you need ITR-3 instead.
02ITR-1 vs ITR-2 vs ITR-3
Choosing the right form matters, because filing the wrong one can make the return defective.
| Form | Use it when | Not for |
|---|---|---|
| ITR-1 (Sahaj) | Salary, one house, interest, within the income limit | Capital gains, foreign assets, business income |
| ITR-2 | Capital gains, multiple houses, foreign income, no business | Business or professional income |
| ITR-3 | Individuals and HUFs with business or professional income | Companies and firms (they have their own forms) |
The line between ITR-2 and ITR-3 is business or professional income. Freelance, consulting or trading-as-a-business income pushes you to ITR-3; occasional capital gains keep you on ITR-2.
03What you need before you start
Gather these before you log in, so you are not hunting for numbers mid-return:
- Form 16 from your employer for salary details.
- Form 26AS and the Annual Information Statement (AIS) for TDS and reported transactions.
- Capital gains statements from your broker or mutual fund for shares and units, and sale and purchase documents for property.
- Interest certificates from banks and the home loan statement if relevant.
- Details of foreign income or assets if applicable.
Cross-check your income against the AIS, because mismatches are a common reason for later notices.
04How to file ITR-2 online, step by step
- Log in to incometax.gov.in with your PAN and password.
- Go to e-File, Income Tax Returns, File Income Tax Return, and select the assessment year.
- Choose individual as the status and ITR-2 as the form.
- Review the pre-filled data: personal details, salary, interest and TDS are pulled in; correct anything that is wrong.
- Fill the income schedules: salary, house property, capital gains (schedule CG), other sources, and foreign assets if any.
- Choose the tax regime, old or new, and let the portal compute the tax.
- Pay any balance tax and enter the challan details, then preview the return.
- Submit and e-verify within the allowed window, using Aadhaar OTP, net banking or a digital signature.
The filing is only complete once you e-verify. If you do not verify in time, the return is treated as not filed. The same process applies if you need to account for the cost of improvement in a capital gain.
05The capital gains schedule
Schedule CG is where ITR-2 gets detailed. You report each category separately:
- Short-term and long-term gains are reported separately, because they are taxed differently.
- Listed shares and equity mutual funds have their own rows, with the grandfathering value where relevant.
- Property gains need the sale value, indexed or non-indexed cost as applicable, and any exemption claimed.
- Exemptions, such as reinvestment reliefs, are entered against the relevant section.
Because the rates and indexation rules for capital gains were changed recently, confirm the current treatment for the year before you compute. For one common relief on property, see the capital gain exemption under section 54.
06How Claw Tax helps
Claw Tax and Accounts is an online tax, GST and accounting service for India that connects you with a verified chartered accountant at a fixed, published price, with a Claw reviewer checking every filing before it is submitted.
Filing ITR-2 yourself on incometax.gov.in is free, and for a straightforward salary-plus-interest return it is manageable. The capital gains schedule is where it gets hard: matching broker statements, applying the right indexation and grandfathering, claiming reinvestment exemptions, and picking the regime that leaves you better off. With Claw Tax and Accounts, a verified chartered accountant files your ITR-2 with capital gains at a fixed, published price, a Claw reviewer checks the return before submission, and reminders go out before the due date.
This is an online service, and it is not tax advice; a verified CA handles your specifics.
07Frequently asked questions
Who should file ITR-2?
ITR-2 is for individuals and Hindu Undivided Families who do not have income from a business or profession but do have capital gains, more than one house property, foreign income or assets, salary above the ITR-1 limit, or who are directors or hold unlisted shares. If your income is only salary, one house and interest within the limit, ITR-1 is simpler. If you have business income, use ITR-3.
What is the difference between ITR-2 and ITR-3?
The dividing line is business or professional income. ITR-2 is for individuals and HUFs with capital gains, multiple houses or foreign income but no business, while ITR-3 is for those who also have income from a business or profession, such as freelancing or trading as a business. Filing ITR-2 when you have business income, or the reverse, can make the return defective, so choose carefully.
How do I file ITR-2 online?
Log in to incometax.gov.in, go to e-File then Income Tax Returns, select the assessment year, choose individual status and ITR-2, and review the pre-filled data. Fill the income schedules including capital gains, choose the tax regime, let the portal compute the tax, pay any balance, preview, submit, and e-verify within the allowed window. The return is only complete once you e-verify.
Can I file ITR-2 without a CA?
Yes. ITR-2 can be filed by yourself on the income tax portal at no cost, and for a straightforward return it is manageable. The part that trips people up is the capital gains schedule, where you match broker statements, apply indexation and grandfathering, and claim reinvestment exemptions. If you have significant or complex capital gains, having a CA prepare and review the return reduces the risk of a notice.
What documents do I need to file ITR-2?
Keep Form 16 for salary, Form 26AS and the Annual Information Statement for TDS and reported transactions, capital gains statements from your broker or mutual fund, sale and purchase documents for property, interest certificates from banks, the home loan statement if relevant, and details of any foreign income or assets. Cross-check your income against the AIS before filing to avoid mismatches that trigger notices.
Do I report capital gains in ITR-2 or ITR-3?
Capital gains are reported in ITR-2 as long as you do not have business or professional income. They go in schedule CG, with short-term and long-term gains shown separately and listed shares, equity funds and property each handled according to the current rules. If you also run a business or profession, you report everything, including capital gains, in ITR-3 instead.