How to File ITR-2 for Capital Gains Income AY 2026-27

ITR-2 is for individuals and HUFs who do NOT have income from business or profession but have any of: salary income + capital gains, income from multiple house properties, foreign income or assets, agricultural income above ₹5,000, capital gains from stocks/MF/property.

ITR-1 (Sahaj) cannot be used if you have capital gains from equity, debt mutual funds, or property. If you sold any stocks or mutual funds during FY 2025-26, you must file ITR-2, not ITR-1.

For those with F&O (futures and options) trading or intraday trading profits, ITR-3 is required as these are treated as business income, not capital gains.

For stocks: Download 'Capital Gains Statement' from your broker (Zerodha, Groww, ICICI Direct) for FY 2025-26 (April 1, 2025 – March 31, 2026). Most brokers provide this automatically in April. It shows STCG (held < 1 year), LTCG (held > 1 year), and exempted LTCG up to ₹1.25 lakh.

For mutual funds: Download 'Capital Gains Statement' from CAMS (camsonline.com) or Karvy/KFintech for all your MF investments. Select all folios and April–March period. For NRIs, the statement is available on the respective AMC websites.

For property: Calculate sale consideration minus indexed cost of acquisition. Index the cost using Cost Inflation Index (CII) published by CBDT. Include registration and stamp duty costs in the acquisition cost.

Schedule CG has multiple sections: A1 (listed equity LTCG above ₹1.25L, taxed at 12.5%), A2 (listed equity STCG, taxed at 20%), A3 (other capital assets STCG), A4 (other LTCG).

For equity and equity mutual funds: Enter date-wise transactions or the summary figures from your broker's capital gains statement. LTCG up to ₹1.25 lakh is exempt — only the amount above ₹1.25L is taxable at 12.5% (changed from ₹1L and 10% in Budget 2024).

For debt mutual funds (purchased after April 1, 2023): All gains are STCG and taxed at slab rate regardless of holding period — the benefit of indexation and LTCG was removed. Enter full gain as STCG in Schedule CG.

Don't ignore bonus shares: Bonus shares have zero cost of acquisition. When sold, entire sale value is capital gain (LTCG after 1 year for listed shares). Include bonus shares in your capital gains calculation.

Advance tax on capital gains: If you realize large capital gains (above ₹5–10 lakh) during the year, pay advance tax on the gain by September 15 and December 15 to avoid Section 234C interest.

Carry forward capital losses: If you have net capital losses, report them in Schedule CG — they can be carried forward for 8 years and offset against future capital gains of the same type. Short-term losses can offset both STCG and LTCG; long-term losses can offset only LTCG.

Use pre-filled data: income tax portal now pre-fills Schedule CG from Form 26AS/AIS for major brokers. Verify this data against your broker statement — discrepancies need correction.