ITR-2 Return Filing

Q: What is the tax rate on long-term capital gains on equity shares and mutual funds?

LTCG on listed equity shares and equity mutual funds is taxed at 12.5% under Section 112A (from Budget 2024), with gains up to ₹1.25 lakh exempt. Grandfathering applies for assets held before 1 February 2018.

Q: How are capital gains from property sale reported in ITR-2?

Reported in Schedule CG of ITR-2. Indexed cost is deducted from sale consideration for LTCG. Exemptions under Section 54 or 54EC can reduce liability. TDS under Section 194-IA must be reconciled with Form 26AS.

Q: Can I set off capital losses against other income?

Short-term capital losses can be set off against STCG and LTCG. LTCL can only be set off against LTCG. Capital losses cannot be set off against salary or business income. Remaining losses can be carried forward for 8 assessment years.

Q: Do NRIs need to file ITR-2?

NRIs with Indian taxable income from salary, rental income, capital gains on Indian investments, or NRO account interest must file ITR in India using ITR-2 in most cases. ITR-1 is not available to NRIs.

Q: What is the STCG tax rate on equity shares sold before 12 months?

20% under Section 111A (increased from 15% in Budget 2024) for listed equity shares and equity mutual funds where STT is paid. Other short-term capital assets are taxed at slab rates.

Income Tax Return for Individuals and HUFs with Capital Gains, Multiple House Properties, or Foreign Income

ITR-2 is the income tax return form for individuals and Hindu Undivided Families (HUFs) who have income from sources beyond the scope of ITR-1 — including capital gains from sale of shares, mutual funds, or property; income from more than one house property; foreign income or foreign assets; directorship in a company; or total income exceeding ₹50 lakh. It does not cover business or professional income.

ITR-2 is more complex than ITR-1 due to the capital gains schedule, which requires reporting of each transaction separately with acquisition cost, sale value, indexed cost (where applicable), and applicable tax rates. Our ITR-2 filing service handles all these complexities accurately. For taxpayers with business income, see our ITR-3 filing service. For a complete overview, visit the income tax e-filing overview.

Our ITR-2 Filing Services

Capital Gains Computation

Computing short-term and long-term capital gains from sale of listed shares, equity mutual funds, debt mutual funds, property, and other capital assets — with correct application of indexation and exemptions.

Multiple House Property Reporting

Computing income or loss from two or more house properties, including set-off of house property losses against other income within the prescribed limit.

Foreign Asset & Income Disclosure

Reporting of foreign assets held abroad — bank accounts, investments, immovable property — and foreign income in the Schedule FA and Schedule FSI of ITR-2.

LTCG on Equity (Section 112A)

Accurate reporting of long-term capital gains on listed equity shares and equity mutual funds under Section 112A, including grandfathering provisions for gains up to 31 January 2018.

Loss Carry-Forward & Set-Off

Optimising the set-off of capital losses against capital gains and carry-forward of remaining losses for up to 8 assessment years for future set-off.

E-Filing & Verification

Complete ITR-2 e-filing with all required schedules and e-verification through Aadhaar OTP or digital signature within the 30-day mandatory window.

Who Must File ITR-2?

Individuals and HUFs with capital gains from shares, mutual funds, property, or other capital assets
Individuals with income from more than one house property
Individuals with total income exceeding ₹50 lakh
Individuals who are directors of a company or hold unlisted equity shares
Individuals with foreign income or foreign assets (bank accounts, investments, property abroad)
Non-residents (NRIs) and Resident but Not Ordinarily Resident (RNOR) individuals
Individuals with income from winning lotteries, horse races, or other winnings taxable under Section 115BB

Frequently Asked Questions

What is the tax rate on long-term capital gains on equity shares and mutual funds?

Long-term capital gains (held for more than 12 months) on listed equity shares and equity-oriented mutual funds are taxed at 12.5% under Section 112A (increased from 10% in Budget 2024) without the benefit of indexation. Gains up to ₹1.25 lakh per year are exempt (increased from ₹1 lakh). The grandfathering provision applies for shares/units held before 1 February 2018, where the cost of acquisition is deemed to be the higher of actual cost or fair market value on 31 January 2018.

How are capital gains from property sale reported in ITR-2?

Capital gains from sale of immovable property are reported in Schedule CG of ITR-2. For long-term capital gains (property held for more than 24 months), the indexed cost of acquisition and improvement is deducted from the sale consideration. Exemptions under Section 54 (reinvestment in residential property) or Section 54EC (investment in NHAI/REC bonds) can be claimed to reduce or eliminate the tax liability. TDS deducted by the buyer under Section 194-IA must be reconciled with Form 26AS.

Can I set off capital losses against other income?

Short-term capital losses can be set off against both short-term and long-term capital gains. Long-term capital losses can only be set off against long-term capital gains. Capital losses — whether short-term or long-term — cannot be set off against income from salary, business, or other sources. However, house property losses of up to ₹2 lakh per year can be set off against salary income. Remaining capital losses can be carried forward for up to 8 assessment years.

Do NRIs need to file ITR-2?

NRIs who have taxable income in India — from salary earned in India, rental income from Indian property, capital gains on Indian investments, or interest from NRO accounts — must file an income tax return in India. Most NRI taxpayers use ITR-2 as their income typically includes capital gains from shares or property. NRIs cannot use ITR-1. They must disclose foreign assets and income if they qualify as residents in any part of the relevant financial year.

What is the STCG tax rate on equity shares sold before 12 months?

Short-term capital gains on listed equity shares and equity-oriented mutual funds — where the holding period is less than 12 months and STT has been paid — are taxed at 20% under Section 111A (increased from 15% in Budget 2024). Gains on other capital assets held for less than the applicable long-term holding period are taxed at the applicable slab rate of the individual.

Capital Gains, Foreign Assets, Multiple Properties — Filed Right

Expert ITR-2 preparation with accurate capital gains computation and deduction optimisation.