ITR-2 is meant for individuals and Hindu Undivided Families (HUFs) who have more complex sources of income — such as capital gains, multiple house properties, or foreign income.

It’s not as simple as ITR-1, but filing correctly ensures you stay compliant and avoid scrutiny notices.

Who Should File ITR-2

✅ Individuals or HUFs who have:

• Salary/pension income

• More than one house property

• Capital gains (sale of property, shares, mutual funds)

• Foreign income or assets abroad

• Dividend income or income from partnerships

Who Cannot File ITR-2

❌ Those with business or professional income (use ITR-3 instead).
❌ Taxpayers eligible for ITR-1 or ITR-4 (simpler returns).

Documents Required

• Form 16 (if salaried)

• Form 26AS / AIS

• Capital gain statements from brokers

• Purchase/sale deeds for property

• Dividend & interest income details

• Foreign asset declarations (if applicable)

Step-by-Step ITR-2 Filing

1️⃣ Log in to incometax.gov.in.
2️⃣ Go to File → Income Tax Return → AY 2025–26 → Individual → ITR-2.
3️⃣ Select your filing status (resident, NRI, etc.).
4️⃣ Add income from salary, house property, and capital gains.
5️⃣ Use the Capital Gains Schedule to enter sale/purchase details and apply indexation for LTCG.
6️⃣ Enter foreign income and assets (Schedule FA).
7️⃣ Add deduction details under 80C–80U.
8️⃣ Choose tax regime (old/new).
9️⃣ Review and pay any remaining tax liability.
🔟 Submit and e-verify.

Pro Tips

✅ Report accurate ISIN and purchase/sale data for shares.
✅ Claim Section 54/54F exemptions for property reinvestments.
✅ For foreign income, declare country, asset type, and amount.

Conclusion

ITR-2 helps you declare capital gains and foreign income transparently — avoiding mismatch issues with AIS data. File carefully and retain all supporting documents for future assessments.

Continue reading:
→ Capital Gains Tax in India: STCG vs LTCG Explained
→ Top Deductions Under Section 80C to 80U
→ Complete Guide to Filing Income Tax Returns (ITR)