ITR-2 Filing Explained: Eligibility & Required Documents

What is ITR 2? (Income Tax Return Form 2)

Imagine you have sold some shares, own a second home, or received income from abroad and have income more than 50 lakhs in such cases, the ITR-2 form you'll need while filing your income tax return. It’s made for individuals and Hindu Undivided Families (HUFs) who don’t earn from a business or profession but have a more complex financial profile.

Who Should File ITR-2?

You’ll likely need to file ITR-2 if:

• You earned profit from selling shares, mutual funds, or real estate

• You own two or more properties

• You earn money from outside India or hold foreign assets

• Your dividends crossed ?10 lakh in a year

• You earned more than ?5,000 through farming

• You’re an NRI and your income doesn’t include business or freelancing

What Documents Do You Need?

Don’t wait till the last minute. Here’s what you’ll need:

• PAN & Aadhaar cards

• Bank statements

• Form 16 or salary slips

• Form 26AS (for tax deducted info)

• AIS and TIS from the tax portal

• Property documents (rent receipts, loan certificates)

• Broker statement for capital gains

• Proof of foreign accounts or assets

• Investment proofs for deductions (80C, 80D, etc.)

• Copy of last year’s return (optional but helpful)

Reporting Capital Gains in ITR-2

If you sold shares or mutual funds, you probably got a capital gain report from your broker. Use that to:

• Declare both short and long-term gains

• Apply indexation (for LTCG)

• Match everything ISIN-wise if you sold shares

How to Show Foreign Assets & Income

If you're a resident of India and have:

• Foreign bank accounts

• Overseas investments

• Property abroad

Then you must declare them. Forgetting or skipping this can bring major penalties under India’s black money laws.

Declaring Rental Income

Own a flat that’s on rent or sitting vacant? In ITR-2, you’ll report:

• Rent received

• Property tax and housing loan interest

• 30% standard deduction

• Even “deemed rent” if a second home isn’t rented

Claiming Tax Deductions (Chapter VI-A)

Use these to save on taxes:

• 80C: PPF, LIC, ELSS, tuition fees

• 80D: Health insurance

• 80E: Student loan interest

• 80TTA: Bank savings interest

• 80G: Donations to charity Keep bills, receipts, or soft copies as proof.

How to File ITR-2 Online (Simple Steps)

1. Collect your documents

2. Visit incometax.gov.in

3. Log in and choose ITR-2 for the right year

4. Fill out your details (salary, rent, investments)

5. Declare foreign assets and gains

6. Add deductions

7. Verify tax calculation

8. Submit and e-verify (via Aadhaar or Net Banking)

Common Mistakes You Should Avoid

• Filing ITR-1 instead of ITR-2

• Skipping capital gain entries

• Not disclosing overseas accounts or income

• Forgetting to e-verify your return

• Missing dividend income that’s over ?10 lakh

Filing Late? Here's What Happens

• ?5,000 penalty under Section 234F

• Interest on tax due (234A, B, C)

• Slower refunds

• Higher chance of a tax notice

Can NRIs Use ITR-2?

Yes, if:

• You have rent or capital gains in India

• You don’t have business income Just keep ready:

• NRO/NRE bank statements

• Details of your investments

• Travel or visa history (sometimes asked)

Filing Without Form 16

No Form 16? No problem. Just use:

• Salary slips

• AIS and Form 26AS

• Your own calculation for deductions This is handy if you switched jobs or are freelancing.

Why File Through TaxCaller?

With TaxCaller, you get:

• Real experts (not bots)

• Capital gains and foreign asset handled properly

• Zero error filing

• E-verification included

• Post-filing support if anything goes wrong

Final Checklist Before You Submit

• Download Form 26AS, AIS & TIS

• Check your capital gains & dividends

• Foreign income/asset details added

• Deduction proofs attached

• Correct form chosen

• Return e-verified successfully

19. Summary

If you’ve income more than a simple salary — like rental income, shares, or overseas assets — ITR-2 is your go-to form. But don’t let tax rules stress you out. At TaxCaller, we simplify it all for you.

???? Just say “Hi” on WhatsApp and get started.

? Human Help | ? CA Reviewed | ? Stress-Free Filing

 Most Asked Questions (FAQs)

Q: Can I file without capital gains?
Yes, if other rules apply (like having two houses).

Q: Is this form just for investors?
No, it's also for salaried folks with complex income.

Q: Can NRIs use ITR-2?
Yes, unless they run a business in India.

Q: Wrong ITR form selected — what now?
The return can be marked "defective" by the tax department.

Q: Can ITR-2 be filed without Form 16?
Yes, you can use your slips and statements.

Q: Is e-verification a must?
Yes, else your filing is considered incomplete.

Q: What is AIS?
It’s a full summary of your financial activity. Always cross-check.

Q: Do I need to declare dividends?
Yes, if they’re taxable (above ?10L or from certain sources).

Q: Can I file without logging in?
No, you must log in at incometax.gov.in

Q: How do I get my refund?
Ensure TDS details are correct. Refund comes post-verification.

Q: Can I file by myself?
Yes, but if it's complex, better to take expert help.

Q: Any benefits to early filing?
Faster refunds and lesser stress.

Q: Can I file ITR offline?
Only in rare cases. Online is better.

Q: How to report exempt income?
Under "Exempt Income" in your ITR form.

Q: How long does e-verification take?
If using Aadhaar OTP, just a few seconds.