If you're a salaried individual with capital gains from selling shares or property — or an NRI with income from Indian sources — ITR-2 is likely the form you need to file for FY 2025-26 (AY 2026-27). The Central Board of Direct Taxes (CBDT) has officially notified ITR-2 for this assessment year through the Official Gazette.
ITR-2 is an Income Tax Return form for individuals and HUFs who do not have income from business or profession. In simple terms, if you're not eligible for ITR-1 and don't have business or professional income, ITR-2 is the right form for you.
ITR-2 is applicable to individuals and HUFs receiving income from sources other than 'Profits and Gains from Business or Profession'. The following income types are covered:
The total income from the above sources may exceed ₹50 lakh.
Additionally, if you are a Director of any company, or an individual who has invested in unlisted equity shares of a company, you must file ITR-2.
Any individual or HUF with income from business or profession cannot file ITR-2.
Note: Taxpayers eligible to file ITR-1 can also file ITR-2. However, it's advisable to use ITR-1 as long as you meet the eligibility criteria — it's simpler and faster to complete.
The due date to file ITR-2 for FY 2025-26 (AY 2026-27) is July 31, 2026. Not filing within this date attracts late fees under Section 234F and additional interest on unpaid tax under Section 234A. Capital loss carry-forward benefits are also lost if you file a belated return.
ITR-2 is divided into the following parts and schedules:
Step 1: Visit the Income Tax e-filing portal and log in using your PAN as User ID along with your password.
Step 2: After logging in, go to the e-File menu, select "Income Tax Return" from the drop-down, choose the relevant Assessment Year, and select the online mode of filing.
Step 3: Click "Start New Filing" and select your applicable taxpayer status — Individual, HUF, etc.
Step 4: Select the appropriate ITR form. Choose ITR-2 if it applies to your income profile.
Step 5: Click "Let's Get Started" and select the reason for filing your return.
Step 6: Choose the schedules applicable to your sources of income.
Step 7: Begin with General Information, verify the pre-filled data, and select the tax regime — old or new — applicable to you.
Step 8: Fill in all relevant schedules according to your income details, then click "Proceed to Verification."
Step 9: Review your return for errors, correct them if necessary, pay any self-assessment tax due, and submit your ITR.
The following changes have been introduced in ITR-2 for FY 2025-26 (AY 2026-27):
The ITR-2 filing process looks more detailed this year than in previous years — but most of these additions are pre-filled or auto-populated if your Form 26AS and AIS are up to date. Check both before you start.
The ITR-2 last date for FY 2025-26 (AY 2026-27) is July 31, 2026 for individuals and HUFs not subject to tax audit. Missing this deadline means you can still file a belated return by December 31, 2026 — but you'll pay a late filing fee of up to ₹5,000 under Section 234F and interest on any unpaid tax under Section 234A. You also lose the ability to carry forward most capital losses to future years. Do this now: Set a calendar reminder for mid-July so you're not filing in the last week when the portal slows under heavy traffic.
ITR-2 is the right form in this case. It covers both salary income and capital gains from the sale of shares, mutual funds, or property — which is exactly what makes it different from ITR-1. ITR-1 only works if your income comes from salary, one house property, and interest income. The moment capital gains enter the picture, you move to ITR-2. If you also have business income on top of that, you'd need ITR-3 instead.
This is a change that caught many filers off-guard in AY 2025-26, and it carries forward into AY 2026-27. Schedule CG in ITR-2 requires capital gains to be split based on whether the transfer happened before or after July 23, 2024 — because tax rates changed on that date following the Budget announcement. You'll need your broker's capital gains statement broken down by date. Most major brokers generate this split automatically in their tax P&L reports. Do this now: Download your full-year capital gains statement from your broker before you start filling Schedule CG.
The single deciding factor is whether you have business or professional income. If you don't — meaning your income comes from salary, pension, house property, capital gains, or other sources — ITR-2 is the correct form. The moment freelance income, consulting fees, or any business profit is added, ITR-3 applies. A company director who draws only a salary still files ITR-2. A director who also invoices the company as a consultant needs ITR-3. Honestly, if the classification of your income isn't clear-cut, one session with a CA costs far less than filing the wrong form and getting a notice later.
NRIs and Resident Not Ordinarily Residents (RNORs) are specifically covered under ITR-2 — it's one of the only forms that handles foreign income and foreign assets, which ITR-1 doesn't support at all. The form structure is the same, but NRI filers will need to complete Schedule FSI (foreign source income), Schedule TR (taxes paid outside India), and Schedule FA (foreign assets). From April 1, 2026, NRIs also no longer need a TAN for property purchase TDS — that can now be deposited via a PAN-linked challan, which simplifies one step that previously caused significant confusion.
All information is based on CBDT notifications and provisions of the Income Tax Act 2025 applicable for FY 2025-26 (AY 2026-27). Tax rules may be updated — verify current provisions on the official Income Tax Department e-filing portal or consult a qualified tax professional.
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