ITR-2 Filing Online for investors, NRIs & high earners.

What is ITR-2?

ITR-2 is the return form for individuals and Hindu Undivided Families (HUFs) who do not earn any income from business or profession, but whose income cannot fit into ITR-1. In practice, it is the form for investors who sold shares, mutual funds, gold or property, for non-residents with Indian income, and for salaried people earning above ₹50 lakh. For FY 2025-26 (AY 2026-27), it is filed under the Income-tax Act, 1961.

Who must use ITR-2

• Anyone with short-term capital gains, or long-term gains above ₹1.25 lakh under section 112A
• Anyone who sold property, gold, debt funds or unlisted shares
• Individuals with total income above ₹50 lakh and no business income
• Non-residents and “not ordinarily resident” individuals
• Residents holding foreign assets, foreign bank accounts or foreign ESOPs
• Company directors and holders of unlisted equity shares
• Anyone with capital losses to carry forward

If you have business income, including F&O trading, you need ITR-3 instead. If you only have salary and a small equity gain within ₹1.25 lakh, ITR-1 may still be enough, so we check this first. Choosing the wrong form can lead to a defective return notice under section 139(9).

Key capital gains rules

• For transfers on or after 23 July 2024, long-term gains on listed equity shares and equity funds (section 112A) are taxed at 12.5% on the amount above ₹1.25 lakh a year.
• Short-term gains on listed equity (section 111A) are taxed at 20%.
• Listed securities become long-term after 12 months; most other assets after 24 months.
• Debt mutual fund units bought on or after 1 April 2023 are taxed at slab rates, whatever the holding period.
• For land or a building bought before 23 July 2024, a resident individual can pay the lower of 12.5% without indexation or 20% with indexation.
• The 87A rebate does not reduce tax on special-rate gains under sections 111A and 112A.

Common mistakes we see

• Missing the grandfathering benefit for equity bought before 1 February 2018
• Reporting mutual fund switches as if no sale happened
• Not reporting Schedule FA for foreign shares or ESOPs
• Filing late and losing the right to carry forward capital losses
• NRIs claiming the 87A rebate, which is only for residents

How our expert handles your ITR-2

• Step 1: We confirm your residential status and the right form.
• Step 2: We collect broker, CAMS/KFintech and property documents.
• Step 3: We compute each sale with its holding period, cost and rate.
• Step 4: We set off losses and fill Schedule CFL for carry forward.
• Step 5: We match everything with AIS, share a summary and file after your approval.

A short example

Suppose in FY 2025-26 you sold equity mutual fund units held for three years with a gain of ₹2,25,000, and shares held for eight months with a gain of ₹50,000. The long-term gain above the ₹1.25 lakh exemption is ₹1,00,000, taxed at 12.5%, giving ₹12,500. The short-term gain of ₹50,000 at 20% gives ₹10,000. Total tax on gains is ₹22,500, and with 4% cess of ₹900, it comes to ₹23,400. This is payable in addition to tax on your salary or other income.