ITR-2 Return Filing — Capital Gains, NRI, and High-Income Individuals in Pune
Expert ITR-2 filing for capital gains, NRIs, foreign assets, and high-income individuals — Schedule FA, FTC claims, DTAA advisory, and deduction optimisation
What Is ITR-2 and Who Is It For?
ITR-2 is the income tax return form for individuals and Hindu Undivided Families (HUFs) who are not eligible to file the simpler ITR-1 because they have capital gains, foreign income, income above ₹50 lakh, more than one house property, NRI income from India, or other income categories that require the more detailed disclosures of ITR-2. It is also the mandatory form for directors of companies, holders of unlisted equity shares, and individuals with foreign assets regardless of their income level.
At N D Savla & Associates, we provide expert ITR-2 return filing services for individuals and HUFs across all ITR-2 applicable categories — capital gains from equity and mutual funds, real estate capital gains, NRI income from Indian sources, high-income individuals, and those with foreign assets and DTAA claims. Our CA team handles the complex computations involved in ITR-2 — particularly capital gains classification, indexation, set-off of losses, Schedule FA foreign asset disclosures, and foreign tax credit claims.
Who Must File ITR-2?
ITR-2 is mandatory for individuals and HUFs in the following categories:
Capital Gains
Any capital gains from equity shares, mutual funds, real estate, bonds, unlisted shares, or any other capital asset — regardless of the amount. Even a ₹1 capital gain disqualifies ITR-1.
High Income (Above ₹50 Lakh)
Individuals with total income exceeding ₹50 lakh in the financial year from any source — including salary, interest, rent, and other income combined.
NRIs & RNORs
Non-Resident Indians with Indian income — NRO interest, rent, capital gains on Indian assets, Indian salary. Also RNOR individuals with foreign income not taxable in India.
Multiple House Properties
Individuals with more than one house property — whether self-occupied, let-out, or deemed let-out. ITR-1 accommodates only one house property.
Foreign Assets
Individuals with foreign assets — bank accounts, equity, property, or any other asset outside India — even if there is no foreign income and even if the asset was acquired from taxed income.
Directors & Unlisted Shareholders
Individuals who are directors of any company — even honorary directorships. Also individuals holding unlisted equity shares at any point during the financial year.
Capital Gains Provisions in ITR-2
Capital gains is one of the most complex areas of ITR-2 and a primary reason why taxpayers need professional assistance. Capital gains must be computed and reported separately for each asset category.
Short-Term vs Long-Term Capital Gains
| Asset Type | Long-Term Holding Period | LTCG Tax Rate | STCG Tax Rate |
|---|---|---|---|
| Listed equity shares & equity mutual funds | More than 12 months | 12.5% on gains above ₹1.25 lakh (AY 2025-26) | 20% |
| Real estate (land & building) | More than 24 months | 12.5% without indexation (or 20% with indexation for assets acquired before 23 July 2024) | Slab rates |
| Debt mutual funds (post-April 2023) | Always short-term | N/A | Slab rates |
| Unlisted shares | More than 24 months | 12.5% | Slab rates |
| Bonds & debentures | More than 36 months | Slab rates | Slab rates |
Set-Off of Capital Losses
Capital losses can be set off against capital gains — but with specific restrictions: 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. Unabsorbed capital losses can be carried forward for up to eight assessment years.
Schedule FA — Foreign Asset Disclosure
Schedule FA (Foreign Assets) must be filled by every Resident and Ordinarily Resident (ROR) individual who holds any foreign asset at any time during the financial year. Foreign assets include: bank accounts outside India; equity, debt, or other financial interest in any entity outside India; immovable property outside India; trusts created outside India; and any other asset held outside India.
The disclosure must be made even if the foreign asset generates no income in India and even if the asset was acquired from legitimate, already-taxed income. The omission to disclose foreign assets in Schedule FA is a serious compliance violation under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 — penalties of up to 300% of the tax on the undisclosed asset and criminal prosecution are possible.
Schedule FSI and Foreign Tax Credit (FTC)
Schedule FSI (Foreign Source Income) and Schedule TR (Tax Relief) are used by Resident and Ordinarily Resident individuals who have foreign income on which taxes have been paid in the foreign country. Under Section 90/91 and the applicable DTAA, India provides relief from double taxation by allowing the foreign tax paid to be credited against the Indian tax liability on the same income. Our team handles FTC claims as part of ITR-2 filing for taxpayers with foreign income.
ITR-2 Filing for NRIs — Key Issues
NRIs with Indian income frequently need to file ITR-2. The key income types that NRIs report in ITR-2 include:
- Interest on NRO accounts (TDS is deducted at 30% — a refund may be available if the effective rate under DTAA is lower)
- Rental income from Indian property
- Capital gains on sale of Indian shares, mutual funds, or property
- Salary earned in India
NRIs can claim DTAA benefits in India — including reduced TDS rates on interest and other income — by providing a valid Tax Residency Certificate from their country of residence. See our Tax Residency Certificate (TRC) services and DTAA advisory for the complete cross-border picture.
Frequently Asked Questions About ITR-2 Return Filing
Who must file ITR-2?
Individuals and HUFs with capital gains, income above ₹50 lakh, NRI income from India, more than one house property, foreign assets, directorship in companies, or unlisted share holdings. ITR-1 cannot be used by any of these categories.
What is the tax rate on LTCG from equity shares in India?
From AY 2025-26 (FY 2024-25), LTCG on listed equity shares and equity-oriented mutual funds above ₹1.25 lakh is taxed at 12.5% without indexation. STCG on listed equity is taxed at 20%.
What is Schedule FA in ITR-2?
Schedule FA is the foreign assets disclosure schedule mandatory for all Resident and Ordinarily Resident individuals who hold any foreign asset at any time during the year — bank accounts, equity, property, or any other asset outside India. Failure to disclose foreign assets carries severe penalties under the Black Money Act, including penalties up to 300% of tax and criminal prosecution.
Can NRIs file ITR-2 in India?
Yes — NRIs with Indian income (NRO interest, rent, capital gains, Indian salary) must file ITR-2. NRIs are not eligible for ITR-1. They can claim DTAA benefits with a valid Tax Residency Certificate from their country of residence, potentially reducing TDS rates on interest and other income.
What is the last date for ITR-2 filing?
31 July for individuals without audit requirements. If the ITR is not filed by 31 July, capital losses for the year cannot be carried forward even if a belated return is filed before 31 December. This makes timely filing critical for investors with capital losses.
Expert ITR-2 Filing — Capital Gains, NRI & Foreign Asset Specialists
Professional ITR-2 filing for capital gains, NRIs, high-income individuals, and those with foreign assets — Schedule FA, DTAA claims, and FTC handled across Pune and India.
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