1. Who Must File ITR-2? (Eligibility)
You should use ITR-2 if your income profile includes any of the following:
High Income: Total income exceeds ₹50 lakh.
Capital Gains: Any profit or loss from the sale of shares, mutual funds, real estate, gold, or other assets.
Multiple Properties: You own and earn income (or claim interest) from more than one house property.
Foreign Income/Assets: You have assets outside India or earned money from a foreign country.
Residential Status: You are a Non-Resident (NRI) or Resident Not Ordinarily Resident (RNOR).
Other Specifics:
You are a Director in any company.
You held unlisted equity shares at any time during the year.
Your agricultural income exceeds ₹5,000.
You have winnings from lotteries, horse races, or online gaming.
2. Who Cannot File ITR-2?
3. Key Differences: ITR-1 vs. ITR-2
| Feature | ITR-1 (Sahaj) | ITR-2 |
| Total Income | Up to ₹50 Lakh | No Limit |
| Capital Gains | Not Allowed* | Allowed (All types) |
| House Property | Only One | More than One |
| NRI Filing | No | Yes |
| Foreign Assets | No | Yes |
*Note: A small exception exists for LTCG under Section 112A up to ₹1.25 lakh, but for most investors, ITR-2 is the standard.
4. Key Documents for ITR-2
Since this form is detailed, you will need more than just a Form 16:
Capital Gains Statement: From your broker (like Zerodha, Groww, etc.) for stock and mutual fund trades.
Property Documents: Sale/purchase deeds if you sold real estate.
Foreign Income Proof: Details of taxes paid abroad if claiming credit (Form 67).
AIS/TIS & Form 26AS: To cross-verify TDS and high-value transactions.
Unlisted Shares Details: If you held shares in a private company or startup.
STRUCTURE OF THE FORM
Because ITR-2 handles complex scenarios like stock market trading, multiple properties, and NRI status, its structure is much more modular than the simple ITR-1.
It consists of Part A (General Info), followed by a series of Schedules, and ends with Part B (Total Income & Tax). Here is the logical flow:
1. Part A: General Information
Identical to ITR-1 but includes extra fields for:
Residential Status: (Resident / NRI / RNOR).
Director Details: If you hold a directorship in any company.
Unlisted Equity: Details of any private company shares you hold.
2. The Income Schedules (The "Meat" of the Form)
You only fill the schedules that apply to you.
Schedule S: Salary details (including allowances and perquisites).
Schedule HP: Details of income/loss from one or more house properties.
Schedule CG (Capital Gains): The most complex part. It breaks down:
Short-Term (STCG): Assets held for less than 12/24/36 months.
Long-Term (LTCG): Assets held longer.
Note: Includes a special table for the ₹1.25 lakh exemption on shares.
Schedule OS: Income from Other Sources (Dividends, Lottery, Interest).
3. Adjustment Schedules
These schedules handle "math" that spans across different years or categories:
Schedule CYLA: Current Year Loss Adjustment (setting off a loss in one category against gain in another).
Schedule BFLA: Brought Forward Loss Adjustment (using losses from previous years to reduce this year's tax).
Schedule CFL: Carry Forward of Loss (tracking losses to be used in future years).
4. Deductions & Foreign Assets
Schedule VIA: Deductions under Section 80C, 80D, 80G, etc.
Schedule FA (Foreign Assets): Mandatory for Residents who own foreign bank accounts, properties, or stocks (like RSUs or ESOPs from US tech companies).
Schedule FSI & TR: For reporting income earned outside India and claiming Double Taxation Relief (DTAA).
5. Part B: Computation of Total Income & Tax
This acts as a "Grand Summary" sheet:
Part B-TI: Summarizes total income from all schedules.
Part B-TTI: Calculates the final tax liability, including Surcharge (if income > ₹50L) and Cess.
6. Tax Payments & Verification
Schedule IT, TDS, TCS: Details of tax already paid.
Verification: Declaring the return is correct and choosing a method (Aadhaar OTP is fastest).
