ITR 2 is the return for an individual or HUF who has no business or professional income but cannot use ITR-1, usually because of capital gains, foreign assets, income above ₹50 lakh, more than two house properties or a non-resident status. A salaried person who sold mutual fund units or shares at a gain beyond the small ITR-1 limit is the most common filer.
For FY 2025-26 (AY 2026-27), the ITR-2 due date was 31 July when no audit applies. If you also run a business or trade in F&O, move up to ITR-3. The form chooser compares all seven forms.
Quick facts
Who files
Individuals and HUFs without business or professional incomeMain triggers
Capital gains, foreign assets, income above ₹50 lakh, NRI statusHouse property
Any number of housesDue date
31 July for AY 2026-27Belated return
31 December for AY 2026-27Foreign assets
Schedule FA, for residents onlyNot for
Business or profession income, including F&O
ITR 2 for whom and for which income
| Income or situation | Allowed in ITR-2 |
|---|---|
| Salary or pension | Yes |
| Rent from any number of house properties | Yes |
| Short term and long term capital gains, any amount | Yes |
| Dividend, interest, lottery and other sources | Yes |
| Foreign income or assets held by a resident | Yes, with Schedule FA and FSI |
| Director in a company or holder of unlisted shares | Yes |
| Agricultural income above ₹5,000 | Yes |
| Income from business or profession | No, use ITR-3 or ITR-4 |
So ITR 2 means the middle form: wider than Sahaj, without the business schedules. The ITR 2 form also suits non-residents and residents who are not ordinarily resident; they must use it even for plain salary, because ITR-1 is only for ordinary residents. Startup employees who deferred tax on ESOP perquisites also report the deferred amount in this form.
What is FPI in income tax returns
Part A of ITR-2 asks whether you are an FII or FPI. FPI means Foreign Portfolio Investor: an entity or person registered with SEBI to invest in Indian securities from outside India, which is taxed under special rules. If you answer yes, the form asks for the SEBI registration number.
For almost every individual, including NRIs who invest through ordinary NRE or NRO accounts, the correct answer is No. Ticking Yes by mistake changes which capital gains schedules the form uses and can lead to a defective return.
Schedule FA in ITR: foreign assets disclosure
A resident who holds any foreign asset, or has signing authority in a foreign account, must fill Schedule FA even if the asset earned nothing. This covers foreign bank accounts, shares and ESOPs of an overseas employer, foreign mutual funds, insurance policies and property. For AY 2026-27 the schedule covers assets held at any time in the calendar year ending 31 December within FY 2025-26.
Foreign assets disclosure in ITR is strict. Schedule FA non-disclosure in the ITR can attract a ₹10 lakh penalty under the Black Money Act. From 1 October 2024, that penalty does not apply when the total value of foreign assets other than immovable property is ₹20 lakh or less. Foreign property has no such relief, and the duty to report stays in every case.
Worked example: salary with equity gains
Anjali, salaried, sold shares and equity funds in FY 2025-26. New regime, resident.
- Salary ₹18,00,000 less standard deduction ₹75,000 = ₹17,25,000.
- Slab tax on ₹17,25,000: ₹20,000 + ₹40,000 + ₹60,000 + ₹25,000 (₹1,25,000 at 20%) = ₹1,45,000.
- LTCG on listed equity under 112A: ₹3,00,000. First ₹1,25,000 is exempt, so ₹1,75,000 at 12.5% = ₹21,875.
- STCG on listed equity under 111A: ₹50,000 at 20% = ₹10,000.
- Total before cess: ₹1,76,875. Cess at 4%: ₹7,075. Tax payable ₹1,83,950, less TDS.
Her LTCG is above ₹1.25 lakh and she has STCG, so ITR-1 is ruled out and she files ITR-2.
ITR 2 vs ITR 3 and ITR 1
| Feature | ITR-1 | ITR-2 | ITR-3 |
|---|---|---|---|
| Business or profession | No | No | Yes |
| Capital gains | Only 112A up to ₹1.25 lakh | Any | Any |
| Total income cap | ₹50 lakh | None | None |
| Residential status | Resident only | Any | Any |
| Foreign assets | No | Yes | Yes |
The simple rule: add business income and ITR-2 becomes ITR-3. Remove capital gains and foreign items and you may fit ITR-1.
How to file ITR 2 online
- Enter the e-filing portal with your credentials.
- Under the e-File heading, Income Tax Returns leads to File Income Tax Return.
- Pick AY 2026-27, choose the online mode, set the status to Individual, and select ITR-2.
- Confirm prefilled salary and interest, then open Schedule CG and enter each sale with its date and cost.
- Fill Schedule 112A scrip by scrip, using the capital gains statement from your broker or fund registrar.
- Complete Schedule FA if you are a resident with foreign assets.
- Clear any tax still due, then submit and verify the return within 30 days.
Common ITR-2 errors
| Mistake | Fix |
|---|---|
| Leaving out small foreign holdings such as overseas employer shares | Report them in Schedule FA; the penalty relief does not waive reporting |
| Answering Yes to the FPI question | Answer No unless you hold SEBI FPI registration |
| Claiming the ₹1.25 lakh exemption on non-equity gains | It applies only to 112A gains on listed equity and equity funds |
| Missing sales that appear in AIS | Check AIS and report every sale |
| Filing ITR-2 with freelance income | Use ITR-3 or ITR-4 |
Written as general information for readers across India. The forms are revised every season; your own facts may need a chartered accountant's view, and the official portal has the final word.
Dates and the new Act
For AY 2026-27 the ITR-2 last date was 31 July. Even after that, you may file a belated return up to 31 December for AY 2026-27, paying the 234F fee of ₹5,000, or ₹1,000 if income is up to ₹5 lakh. Earnings from 1 April 2026 sit in tax year 2026-27, governed by the 2025 Act, and the successor to ITR-2 is still to be issued under the Rules, 2026. Full dates sit on the ITR due date page.
Sources we checked
- Income-tax Act, 1961, sections 111A and 112A
- Income-tax Act, 1961, section 139(1)
- Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, section 43
- CBDT notification of ITR-2 for AY 2026-27
Frequently asked questions
What is ITR 2 and who should file it?
ITR-2 suits individuals and HUFs without any business income who have capital gains, foreign assets or income, more than two houses, a directorship, unlisted shares or total income above ₹50 lakh. NRIs with any of these incomes also use it.
What is the last date to file ITR 2 for AY 2026-27?
The due date was 31 July for AY 2026-27. After that, a belated return can be filed until 31 December with a late fee.
Is Schedule FA in ITR 2 compulsory for small foreign holdings?
Yes, a resident must report every foreign asset regardless of value. The ₹10 lakh penalty is waived when movable foreign assets total ₹20 lakh or less, but the reporting duty remains.
Can I file ITR 2 if I have freelance income?
No. Freelance or professional income needs ITR-3, or ITR-4 if you use the 44ADA presumptive scheme and meet its conditions.
What does FPI mean in the ITR form?
It means Foreign Portfolio Investor registered with SEBI. Ordinary resident and NRI individuals should answer No.