ITR-2 Return Filing For Individuals & HUFs
with Capital Gains, Foreign Income & More

ITR-2 is an income tax return form meant for individuals and Hindu Undivided Families (HUFs) who have income from capital gains, foreign assets, or more than one house property. Filing ITR-2 ensures accurate reporting of high-value transactions and tax compliance. Whether you're earning abroad or selling property, timely ITR-2 filing helps you avoid penalties and claim eligible deductions with ease.

Income Tax Return-2

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Application For Income Tax Return

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ITR-2 Amendment Registration

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 Process of ITR-2 Amendment Registration 2025

STEP 1

  • Fill out the online form with your details.
  • Make the required payment to proceed.
  • Get Call for Further Information, Documents & Advice

STEP 2

  • Submit documents and information if requested.
  • Team will review and validate documents and information.

STEP 3

  • Creation of login credential.
  • Respond to any follow-up from the team.

STEP 4

  • Filing of an Application using the Credentials
  • Government Processing Time

STEP 5

  • Resolution of Queries if any, Raised via Authorities
  • Issuance of ITR-2 Registration on email.

Introduction to ITR-2 (Income Tax Return Form 2)

ITR-2 is one of the seven forms notified by the Income Tax Department for annual return filing. It is specifically designed for individuals and Hindu Undivided Families (HUFs) who do not earn income from business or profession but have income from other sources like capital gains, foreign income, more than one residential property, or agricultural income exceeding ₹5,000. This form ensures detailed disclosure of your earnings and tax liability, providing a structured way to declare investments, foreign assets, and carry-forward losses. Understanding its scope and applicability is crucial for accurate and timely return filing.

What is ITR-2

What is ITR-2?

ITR-2 is an Income Tax Return form applicable to individuals and HUFs who earn income from capital gains, own foreign assets, or have multiple residential properties. It does not apply to those who have income from business or professional activities. This form captures comprehensive details under various heads of income and deductions, including salary, pension, house property, capital gains, and other sources.

What is ITR-2?

ITR-2 is an Income Tax Return form applicable to individuals and HUFs who earn income from capital gains, own foreign assets, or have multiple residential properties. It does not apply to those who have income from business or professional activities. This form captures comprehensive details under various heads of income and deductions, including salary, pension, house property, capital gains, and other sources.

Who Should File ITR-2?

  • Have income from capital gains (e.g., sale of property or shares),
  • Earn income from foreign sources or own foreign assets,
  • Have agricultural income exceeding ₹5,000,
  • Own more than one house property,
  • Are a Director in a company not having business income,
  • Have income as a partner in a firm (excluding business share).

It is the right form if your sources of income are diverse but not from a business or profession.

Who Should File ITR-2

Who Should File ITR-2?

  • Have income from capital gains (e.g., sale of property or shares),
  • Earn income from foreign sources or own foreign assets,
  • Have agricultural income exceeding ₹5,000,
  • Own more than one house property,
  • Are a Director in a company not having business income,
  • Have income as a partner in a firm (excluding business share).

It is the right form if your sources of income are diverse but not from a business or profession.

When is ITR-2 Not Applicable

When is ITR-2 Not Applicable?

  • You earn income from business or profession (use ITR-3 instead),
  • You are eligible for ITR-1 (i.e., only salary, one house property, and other sources under ₹50L),
  • You are a company, LLP, or trust, as they have separate forms,
  • You want to file returns under the presumptive taxation scheme (ITR-4 is applicable).

Filing the wrong ITR form may lead to rejection or legal consequences, so choose wisely based on your income sources.

Who Should File ITR-2?

  • Have income from capital gains (e.g., sale of property or shares),
  • Earn income from foreign sources or own foreign assets,
  • Have agricultural income exceeding ₹5,000,
  • Own more than one house property,
  • Are a Director in a company not having business income,
  • Have income as a partner in a firm (excluding business share).

It is the right form if your sources of income are diverse but not from a business or profession.

Eligibility Criteria for Filing ITR-2

ITR-2 is applicable to a specific category of taxpayers who have complex income sources beyond salary and interest. Unlike ITR-1, this form is suitable for individuals and HUFs with income from capital gains, foreign assets, multiple house properties, and more. Filing the correct form ensures compliance and helps avoid scrutiny from the Income Tax Department.

Below are the eligibility conditions for filing ITR-2:

  • You are an Individual or Hindu Undivided Family (HUF): Only individuals and HUFs can use this form; companies and firms cannot.
  • Have Income from Capital Gains: If you have earned short-term or long-term capital gains from the sale of property, shares, mutual funds, or other investments during the financial year.
  • Have Foreign Income or Assets: If you own any foreign bank account, financial interest, property, or have earned foreign income.
  • Have More Than One House Property: Those owning two or more residential properties must file ITR-2, even if the second property is vacant or self-occupied.
  • Have Agricultural Income Exceeding ₹5,000: If your agricultural income exceeds this limit, you are ineligible for ITR-1 and must use ITR-2.
  • Are a Director in a Company: If you hold a directorship in any company, even without business income, ITR-2 is applicable.
  • Earned Income as a Partner in a Firm (Excluding Business Income): You can file ITR-2 if your income is from a partnership firm, but not from business or profession.
ITR-2 Eligibility

Understanding these eligibility conditions is vital to selecting the correct form. If you fall into any of the above categories, ITR-2 is the right form for you to file your income tax return accurately and in compliance with Indian tax laws.

Ineligible Cases for ITR-2

While ITR-2 is designed for individuals and HUFs with a broad range of income sources, it does not apply to all taxpayers. Selecting the wrong form may result in rejection of your return or unnecessary legal complications. Below are the situations where ITR-2 is not applicable:

Individuals with Business or Professional Income

If you earn from a proprietorship or profession (doctor, freelancer, consultant), use ITR-3 instead.

Foreign Companies or Non-Resident Corporates

ITR-2 is not for corporate foreign taxpayers. Non-resident individuals may use it, but not corporate bodies.

Agricultural Income as Primary Source

If your entire income is from agriculture (beyond ₹5,000) without any other taxable source, a different form may apply.

Partnership Firm Income with Business Share

If you’re a partner in a firm earning business income, ITR-3 applies, not ITR-2.

Entities Other Than Individuals or HUFs

Companies, LLPs, trusts, or associations cannot file ITR-2.

Presumptive Taxation (Sec 44AD, 44ADA, 44AE)

Taxpayers under presumptive schemes must use ITR-4 instead.

Using the right ITR form ensures smooth refunds, prevents notices, and maintains compliance. Always review your income sources before choosing a return form.

Documents Required for ITR-2 Filing

Accurate and timely filing of ITR-2 requires gathering the right documents that reflect your income, deductions, and investments. Since ITR-2 caters to individuals and HUFs with income from multiple sources such as capital gains, foreign assets, or multiple house properties, documentation plays a crucial role in error-free reporting and smooth refund processing. Below is a list of essential documents required for ITR-2 filing:

1. PAN and Aadhaar Card

Mandatory for identity verification, e-verification, and linking of your tax profile with the Income Tax portal.

2. Form 16

Issued by your employer, it contains details of salary income, deductions, and TDS deducted during the financial year.

3. Form 16A / Form 26AS

Used to report TDS on income from sources other than salary and for cross-checking total TDS deposited against your PAN.

4. Annual Information Statement (AIS) & Taxpayer Information Summary (TIS)

For validating reported income, capital gains, dividends, and interest—especially useful for high-value transactions.

5. Bank Statements and Passbooks

To disclose interest earned on savings accounts, FDs, or RDs, and match cash flow for the financial year.

6. Capital Gains Statement (Equity/Mutual Funds/Property)

Required if you’ve sold shares, mutual funds, or immovable property. Obtain this from your broker or registrar.

7. Property Documents

For those with income from house property, including rental agreements, municipal tax receipts, and loan interest certificates.

8. Foreign Asset Details

If you own assets abroad or have earned foreign income, disclosures under Schedule FA must be supported with proof.

9. Investment Proofs for Tax Deductions

Evidence of deductions claimed under sections like 80C (LIC, PPF), 80D (health insurance), 80G (donations), etc.

10. Home Loan Statement

From your bank/lender showing principal and interest amounts paid for claiming deductions.

11. Rent Receipts or HRA Exemption Proofs

If claiming HRA, collect monthly rent receipts and landlord’s PAN if required.

12. Challans for Advance Tax / Self-Assessment Tax Paid

Proof of any advance tax or self-assessment tax payment made using Challan 280.

Step-by-Step Process to File ITR-2

Filing ITR-2 can seem complex due to multiple income heads like capital gains, rental income, and foreign assets, but with a systematic approach, the process becomes manageable. Here's a detailed guide to help you file ITR-2 accurately on the Income Tax India e-Filing Portal:

1

Step 1 – Collect and Organize Relevant Documents

Begin by gathering all necessary documents, including Form 16, capital gains statements, AIS/TIS reports, interest certificates, and investment proofs. These are crucial for accurate income disclosure and claiming eligible deductions.

2

Step 2 – Log in to Income Tax Portal

Visit www.incometax.gov.in and log in using your PAN, password, and OTP (if 2FA is enabled). Make sure your profile and contact details are updated before proceeding.

3

Step 3 – Select and Fill ITR-2 Form

From the dashboard, navigate to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’. Choose the appropriate Assessment Year, online/offline mode, and select ITR-2 as your return type based on your income eligibility.

4

Step 4 – Report Income, Deductions, and Capital Gains

● Declare income from salary/pension, house property, capital gains, other sources, and foreign income, if applicable.
● Ensure capital gain computation is accurate, especially for equity, mutual funds, or property.
● Enter deductions under relevant sections like 80C, 80D, 80G, and 24(b).

5

Step 5 – Validate and Submit

After filling all schedules, validate your return using the built-in validation tool. Resolve any red flags or missing fields. Once all details are reviewed, click ‘Preview & Submit’ to complete the filing process.

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Step 6 – E-Verify the Return

Post submission, e-verify your ITR using options like Aadhaar OTP, net banking, bank account EVC, or digital signature. This is essential for processing your return and receiving refunds, if any.

Capital Gains Reporting in ITR-2

ITR-2 is specifically designed for taxpayers with capital gains income, including from the sale of shares, mutual funds, property, or any capital assets. Accurate reporting of such gains ensures lawful compliance and optimizes your tax liability. Below are key aspects to understand while declaring capital gains in ITR-2:

Short-Term vs. Long-Term Capital Gains

Capital gains are classified based on the holding period of the asset:
● Short-Term Capital Gains (STCG): Gains from assets held for less than 36 months (or 12 months for listed securities and equity mutual funds). Taxed at 15% if under Section 111A.
● Long-Term Capital Gains (LTCG): Gains from assets held for more than the threshold period. LTCG on listed equity above ₹1 lakh is taxed at 10%, while property LTCG is taxed at 20% with indexation.

Proper classification ensures accurate tax computation and eligibility exemptions.

Sale of Property, Shares, or Mutual Funds

If you have sold immovable property, listed shares, or mutual fund units, the profits or losses must be reported under Schedule CG in ITR-2. You’ll need:
● Purchase and sale value
● Date of acquisition and sale
● Brokerage and transfer costs
● Indexed cost (for LTCG on property)

The Income Tax Department cross-verifies this with your AIS/TIS and Form 26AS, so accurate reporting is crucial.

Exemptions under Section 54, 54F, etc.

If you have reinvested your capital gains in another residential property or specified assets, you may be eligible for capital gains exemptions:
● Section 54: Exemption on sale of residential house if reinvested in another residential house.
● Section 54F: Applies to capital gains from non-residential assets if reinvested in a residential house.
● Section 54EC: Investment in specified bonds (NHAI/REC) within 6 months.

Declare these correctly in the “Schedule CG” and mention exemption claims under “Schedule EI” or “Schedule 80GGA” where applicable.

Foreign Income and Asset Declaration

If you're an Indian resident with foreign income or overseas assets, ITR-2 is the correct form for disclosure. Accurate reporting of global income ensures compliance with Indian tax laws and international transparency regulations like FATCA. Failing to declare such income or assets may lead to severe penalties under the Black Money Act, 2015.

FATCA Compliance and Reporting

India is a signatory to the FATCA (Foreign Account Tax Compliance Act) and Common Reporting Standard (CRS) agreements. This requires Indian residents to disclose all foreign assets and income to maintain transparency with global tax authorities. Non-disclosure can lead to notices, penalties, and potential prosecution under the Black Money Act.

income illustration

Income Earned Abroad

If you’ve worked or invested abroad and earned income, you must report it in ITR-2 under Schedule FSI. This includes:

  • Salary or freelance income from foreign sources
  • Rental income from overseas properties
  • Dividends, interest, or capital gains from foreign investments

Double Taxation Relief under Section 90/91 can be claimed if the income is taxed both in India and abroad.

Foreign Bank Accounts or Investments

You must declare any foreign bank accounts, stocks, mutual funds, insurance policies, or retirement accounts held outside India. Report these under Schedule FA (Foreign Assets). Include:

  • Country, account type, and peak balance
  • Details of ownership/control
  • Investment income earned, if any

Even if these accounts are dormant or inactive, declaration is mandatory for residents.

Due Dates and Late Filing Penalties

Understanding the due dates and associated penalties for ITR-2 filing is essential for every taxpayer with capital gains, foreign income, or multiple income sources. Timely filing helps avoid financial burdens, interest payments, and notices from the Income Tax Department.

Standard Date

Standard Due Date – July 31

For individuals and Hindu Undivided Families (HUFs) who are not required to undergo tax audits, the due date to file ITR-2 is July 31st of the assessment year. Filing before this deadline ensures timely processing, reduces the risk of late fees, and improves refund timelines.

Late fees under Section 234F

Late Filing Fees Under Section 234F

If the return is filed after the due date:

  • A penalty of ₹5,000 is imposed if income exceeds ₹5 lakhs.exceeds ₹5 lakhs.
  • For income up to ₹5 lakhs, the maximum penalty is limited to ₹1,000. These fees are non-negotiable and must be paidalong with your return.
Interest payable

Interest on Tax Payable – Section 234A, 234B, 234C

If there’s unpaid tax while filing late, the following interest provisions apply:

  • Section 234A:1% interest per month for delay in return filing.
  • Section 234B:1% interest if 90% of advance tax is not paid.
  • Section 234C:Interest for deferring or skipping advance tax installments.These interest charges add up and can significantly increase tax liability.

Common Mistakes to Avoid

Filing ITR-2 requires precision, especially when dealing with capital gains, multiple properties, or foreign assets. Avoiding these common mistakes ensures accuracy, avoids penalties, and prevents scrutiny by the Income Tax Department.

Incorrect Capital Gain Calculations
  • Many filers make errors while calculating capital gains. Common issues include missing indexation, incorrect acquisition cost, or ignoring brokerage and transfer charges. Always use Schedule CG properly and refer to capital gain statements from brokers.
Missing Foreign Income Declaration
  • If you have foreign bank accounts, property, or income and you’re a resident, failing to declare these in Schedule FA can attract penalties under the Black Money Act. Full disclosure is mandatory even if income is tax-exempt.
Not Claiming Eligible Deductions
  • Forgetting deductions under Section 80C, 80D, or 80G can lead to overpayment of taxes. Carefully review eligible deductions and keep documentation to claim benefits accurately during filing.
Using the Wrong Form
  • Using ITR-1 or ITR-3 when ITR-2 is applicable can lead to rejection or processing issues. ITR-2 is meant for individuals with capital gains, multiple properties, foreign income, or income above ₹50 lakh (without business income).
Failing to E-Verify
  • Submitting the return is not enough. If you don’t e-verify your ITR within 30 days, it is treated as invalid. E-verification can be done using Aadhaar OTP, Net Banking, or Digital Signature.

How Udyog Suvidha Kendra Helps with ITR-2 Registration

Udyog Suvidha Kendra offers expert assistance for ITR-2 filing, especially for individuals and HUFs with capital gains, multiple properties, and foreign income. Our personalized approach ensures accuracy, compliance, and timely submission, helping taxpayers avoid penalties and legal hassles.

1

Accurate Income & Asset Declaration

We ensure all income sources, foreign assets, and exempt incomes are correctly disclosed in the relevant schedules of ITR-2, reducing the risk of scrutiny or mismatch with Form 26AS and AIS data.

2

Capital Gains Computation & Reporting

Our experts assist in calculating short-term and long-term capital gains from property, mutual funds, or shares. We apply indexation, exemptions under Sections 54, 54F, etc., and help prepare Schedule CG accurately.

3

End-to-End Filing with Compliance Checks

From document collection and form selection to final submission and e-verification, we provide end-to-end support. Our compliance checks ensure deduction claims, asset reporting, and return validation are fully aligned with Income Tax Department guidelines.

ITR-2 Registration FAQs

Who should file ITR-2?
Individuals and Hindu Undivided Families (HUFs) with income from capital gains, more than one house property, foreign income/assets, or income exceeding ₹50 lakh should file ITR-2. It is suitable for those not having income from business or profession.
Yes, salaried individuals can file ITR-2 if they have capital gains, multiple properties, or foreign income/assets. If their income is only from salary, one property, and interest, ITR-1 may be more appropriate.
Yes, ITR-2 is mandatory if you own foreign bank accounts, stocks, or real estate, or if you are a resident and have foreign income. Accurate disclosure is crucial to comply with FEMA and FATCA reporting norms
ITR-2 covers both short-term and long-term capital gains from the sale of shares, mutual funds, bonds, land, buildings, and other capital assets. It includes provisions for exemptions under Sections 54, 54EC, and 54F.
You’ll need Form 16, Form 26AS, AIS report, sale-purchase documents of capital assets, bank statements, foreign asset details, and proofs of deductions like investments, insurance, and donations for accurate ITR-2 filing.
Yes, if you have foreign assets/income, multiple properties, or your income exceeds ₹50 lakh, you may still be required to file ITR-2 even without capital gains.ITR-1 and ITR-4 would not be applicable in such cases.
The standard due date for filing ITR-2 is July 31st of the assessment year for individuals not liable for audit. Filing after this date can attract penalties under Section 234F and interest under Sections 234A, 234B, and 234C.
Yes, a private limited company can legally change its business objectives by amending the Objects Clause of the MOA, after shareholder and ROC approval.If you miss the due date, you can still file a belated return with a late fee of up to ₹5,000. However, you may lose benefits like carry-forward of losses and may incur interest on unpaid taxes.
Exempt income such as dividends, agricultural income, or long-term capital gains within the threshold must be reported under “Exempt Income” schedule in ITR-2 to ensure accurate record and avoid future tax notices.
Foreign assets must be disclosed under the Schedule FA in ITR-2. Include all relevant details like country, nature of asset, income earned, and peak balance. This is mandatory for residents with global income/assets.
Yes, the Income Tax Department provides both online and offline utilities (Excel/Java) for ITR-2 filing. However, due to its complexity, many taxpayers prefer using a tax expert or filing platform for accurate and timely submission.
Filing the wrong ITR form may lead to defective return notices (Section 139(9)). Your return may be rejected, and you’ll have to refile correctly. It can also cause delays in processing refunds and mismatch issues.
Yes, all common deductions under Section 80C, 80D, 80G, 80TTA, etc. can be claimed in ITR-2. Ensure you have valid proof like LIC receipts, health premium, and donation certificates to claim deductions correctly.
Yes, your ITR-2 must be e-verified within 30 days of filing. You can verify using Aadhaar OTP, net banking, or DSC. If not verified, the return is considered invalid and not processed by the Income Tax Department.
Udyog Suvidha Kendra offers end-to-end support, from reviewing documents and computing capital gains to accurate ITR form selection and filing. Our team ensures you meet compliance, claim all deductions, and avoid errors and penalties.