The Income Tax Department has enabled online filing of ITR-2 for Assessment Year (AY) 2026–27 on the e-filing portal. Every year, thousands of taxpayers struggle with choosing the correct return form and understanding the various schedules included in ITR-2. Although the form contains several sections, most taxpayers are only required to complete the schedules relevant to their income and financial transactions.

If you earn income from salary, own multiple house properties, have capital gains from investments, receive foreign income, or hold foreign assets but do not have income from business or profession, ITR-2 is generally the applicable return form.

Understanding each section before filing can help you avoid mistakes, prevent processing delays, reduce the chances of receiving tax notices, and ensure your return is processed smoothly.

This guide explains the most important sections of ITR-2 for AY 2026–27 and what information taxpayers should carefully review before submitting their return.

Who Should File ITR-2?

ITR-2 is applicable to Individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession but have one or more of the following:

1. Income from salary or pension
2. Income from more than one house property
3. Capital gains from shares, mutual funds, property, bonds, or other capital assets
4. Foreign assets or foreign income
5. Agricultural income exceeding the prescribed limit
6. Income taxable at special rates
7. Income from other sources such as dividends and interest

Taxpayers engaged in business, professional practice, intraday trading, or Futures & Options (F&O) generally need to file ITR-3 instead.

What's New in ITR-2 for AY 2026–27?

For AY 2026–27, the online utility has incorporated updated validation checks and continues to support the default new tax regime under Section 115BAC, while allowing eligible taxpayers to opt for the old tax regime where applicable. The form also includes dedicated reporting requirements for Virtual Digital Assets (VDAs) and improved schedules for capital gains reporting.

Taxpayers should verify all pre-filled information before submitting the return, as incorrect or outdated information may delay processing or refunds.

1. Part A – General Information

This section captures your basic profile details and forms the foundation of your return.

You should carefully review:

1. Name and PAN
2. Aadhaar details
3. Mobile number and email address
4. Residential status
5. Filing status
6. Nature of return
7. Tax regime selection
8. Bank account details

Many fields are pre-filled from your Income Tax profile, but taxpayers remain responsible for ensuring the information is accurate.

Choosing the correct residential status is particularly important because it determines how your global income will be taxed.

2. Bank Account Details

One of the most overlooked sections is bank account reporting.

Every taxpayer should report all active bank accounts held during the financial year.

At least one account should be pre-validated for receiving tax refunds.

Incorrect IFSC codes, closed accounts, or incomplete details may delay refunds even after the return has been processed.

Before filing, verify:

1. Account number
2. IFSC code
3. Bank name
4. Refund account selection

3. Schedule House Property

This schedule is applicable to taxpayers earning income from house property.

Whether the property is:

1. Self-occupied
2. Let out
3. Deemed let out
4. Co-owned

the relevant details must be reported accurately.

Information generally includes:

1. Annual rent received
2. Municipal taxes paid
3. Interest on housing loan
4. Co-owner's share
5. Tenant details (where applicable)
6. Pass-through income, if any

Proper disclosure helps determine taxable income from house property and ensures eligible deductions are correctly claimed.

4. Schedule Capital Gains

This is one of the most detailed sections in ITR-2.

Taxpayers must disclose gains or losses arising from the transfer of capital assets such as:

1. Listed shares
2. Mutual funds
3. Bonds
4. Debentures
5. Immovable property
6. Gold
7. Other capital assets

Capital gains should be classified into:

1. Short-Term Capital Gains (STCG)
2. Long-Term Capital Gains (LTCG)

For multiple transactions involving the same asset category, taxpayers should compute consolidated gains wherever permitted. However, transactions involving land or buildings generally require separate reporting for each property.

Supporting documents such as broker statements, capital gain reports, purchase records, and sale deeds should be reconciled before filing.

5. Schedule VDA – Virtual Digital Assets

Taxpayers who have transferred Virtual Digital Assets (VDAs), including cryptocurrencies and certain digital tokens, are required to report such income separately in this schedule.

Income from these transactions is taxed under special provisions and is automatically linked with the Capital Gains schedule wherever applicable.

Proper reporting is essential because VDA transactions are subject to specific tax rules, including restrictions on loss set-off and deductions.

6. Schedule CYLA – Current Year Loss Adjustment

Not every investment generates profits every year.

If you incur eligible losses during the current financial year, Schedule CYLA records how those losses are adjusted against eligible income earned in the same year.

Examples include:

1. Capital losses
2. House property losses

The adjusted income is then carried forward for further computation.

7. Schedule BFLA – Brought Forward Loss Adjustment

If you had eligible losses from previous assessment years that were carried forward, they are adjusted in this schedule.

Examples include:

1. Previous year's capital loss
2. House property loss

This ensures taxpayers receive the benefit of eligible losses before arriving at the final taxable income.

8. Schedule CFL – Carry Forward of Losses

Any eligible losses that remain unadjusted after current-year and brought-forward adjustments are reported in Schedule CFL.

These losses can generally be carried forward to future assessment years, subject to the conditions prescribed under the Income-tax Act.

Timely filing of the return is often essential to preserve the right to carry forward certain losses.

9. Schedule VI-A – Deductions

This schedule covers deductions available under Chapter VI-A of the Income-tax Act.

Depending on the tax regime selected, taxpayers may be eligible to claim deductions such as:

1. Section 80C – Investments in PPF, ELSS, Life Insurance, EPF, etc.
2. Section 80D – Health insurance premium
3. Section 80CCD – National Pension System (NPS)
4. Section 80G – Donations
5. Section 80E – Education loan interest
6. Section 80TTA/80TTB – Savings account interest

Taxpayers opting for the old tax regime should carefully review all eligible deductions before filing.

10. Schedule SPI – Clubbing of Income

Certain incomes are legally required to be included in the taxpayer's income instead of another person's income.

Examples include income earned by:

1. Minor children
2. Spouse under specified circumstances

This schedule ensures compliance with the clubbing provisions under the Income-tax Act.

11. Schedule FSI – Foreign Source Income

Resident taxpayers earning income from outside India must report details in this schedule.

This may include:

1. Salary earned abroad
2. Foreign interest income
3. Dividend income
4. Rental income from overseas property
5. Foreign investments

Proper disclosure helps determine tax liability and facilitates relief under Double Taxation Avoidance Agreements (DTAAs), where applicable.

12. Schedule TR – Tax Relief

If tax has already been paid in another country on income that is also taxable in India, taxpayers may claim relief under the applicable tax treaty or provisions of the Income-tax Act.

Schedule TR summarizes the relief being claimed and should correspond with the information reported under foreign income schedules.

13. Schedule FA – Foreign Assets

Resident taxpayers holding foreign assets must disclose them in this schedule.

Examples include:

1. Foreign bank accounts
2. Overseas property
3. Foreign shares
4. Foreign mutual funds
5. Foreign trusts
6. Financial interests outside India

Accurate reporting is essential, as non-disclosure may attract significant penalties under Indian tax laws.

14. Schedule 5A

This schedule is applicable only in specific situations governed by the Portuguese Civil Code, where income is apportioned between spouses.

For most taxpayers in India, this schedule is not applicable.

15. Schedule AL – Assets and Liabilities

Taxpayers whose total income exceeds the prescribed threshold are required to disclose details of their assets and liabilities.

These may include:

1. Residential property
2. Commercial property
3. Jewellery
4. Motor vehicles
5. Bank balances
6. Investments
7. Loans
8. Other financial assets

The objective is to improve transparency regarding a taxpayer's financial position.

Common Mistakes to Avoid While Filing ITR-2

1. Not verifying pre-filled information.
2. Choosing the wrong tax regime.
3. Forgetting to report capital gains.
4. Omitting foreign income or assets.
5. Entering incorrect bank account details.
6. Failing to claim eligible deductions.
7. Ignoring carried-forward losses.
8. Not reconciling AIS, Form 26AS, and broker statements before filing.

Final Thoughts

Filing ITR-2 does not have to be overwhelming. Although the form contains multiple schedules, most taxpayers only need to complete the sections relevant to their financial profile. Reviewing each applicable schedule carefully, reconciling your information with official records, and maintaining proper documentation can help ensure accurate filing and faster processing.

Whether your income includes salary, rental income, capital gains, foreign assets, or investments, taking the time to understand the key sections of ITR-2 can save you from future notices, delays, and compliance issues. If your tax affairs involve multiple income sources or complex transactions, seeking professional guidance can help ensure that your return is complete, accurate, and fully compliant with the Income-tax Act.