- Overview
- Who Can File ITR-2?
- Who Cannot File ITR-2?
- ITR-1 v. ITR-2 – Quick Contrast
- Structure of ITR-2
- How to File ITR-2?
- Key Points
- Final Thoughts
Overview
As we move forward in the ITR filing season, it becomes essential to understand which form applies to more complex income structures. If you’re someone with capital gains, foreign income, more than one property or a director in a company, ITR-2 may be the right fit.
Let’s break down the essentials.
Who Can File ITR-2?
ITR-2 is applicable to individuals and Hindu Undivided Families (HUFs) who do NOT have income from business or profession but have any of the following:
- Capital Gains (Short-term or Long-term)
- Income from more than one house property
- Foreign income or foreign assets
- Income as a partner in a firm (without business income)
- Dividend income
- Agricultural income above INR 5,000
- Being a director in a company
- Holding unlisted equity shares
Who Cannot File ITR-2?
You cannot use ITR-2 if you have:
- Business or professional income (even if presumptive under Section 44AD/ADA/AE)
In such cases, ITR-3 applies.
ITR-1 vs. ITR-2 – Quick Contrast
Feature | ITR-1 | ITR-2 |
Max Income Limit | INR 50 lakh | No limit |
Capital Gains | Not allowed (except limited LTCG ≤ INR 1.25L from AY 2025–26) | Fully allowed |
House Property | Only one | Multiple |
Foreign Assets/Income | Not allowed | Allowed |
Business/Professional Income | Not allowed | Not allowed |
Director in Company | Not allowed | Allowed |
Unlisted Shares | Not allowed | Allowed |
Structure of ITR-2
ITR-2 is more detailed than ITR-1 and includes:
- Personal & Filing Status
- Income Schedules (Salary, House Property, Capital Gains, Other Sources)
- Schedule FA – Foreign Assets
- Schedule AL – Assets & Liabilities (if income > ₹50 lakh)
- Schedule CG – Detailed capital gains reporting
- Tax Paid (TDS, Advance Tax)
- Verification & Bank Details
How to File ITR-2?
You can file ITR-2:
- Online via the e-Filing Portal: Best for salaried individuals with capital gains (auto-filled AIS/TIS helps).
- Offline using JSON Utility: Suitable for detailed offline working and uploading the return.
E-verification is mandatory after submission.
Key Points
- Capital Gains Reporting: Even if you sold shares or mutual funds with minimal gains, those details must be reported accurately.
- AIS/TIS Matching: Cross-check capital gains, dividends, interest, and property sales.
- Foreign Assets: Mandatory disclosure if you held any foreign assets or bank accounts in the FY.
- Schedule AL: If your total income exceeds INR 50 lakh, disclosure of movable/immovable assets and liabilities is compulsory.
Final Thoughts
ITR-2 is ideal for individuals with non-business income but layered financial lives. Whether it’s capital gains, overseas interests, or property income, this form ensures comprehensive disclosure.
Getting the form right is half the battle—choose correctly, report completely, and verify promptly.
