How to File ITR 2 Form with Capital Gains

What is ITR Form 2, and who files this form?

ITR Form 2, also known as ITR-2, is an income tax return form used by HUF (Hindu Undivided Families) and individuals in India to file their taxes with the Income Tax Department. It is for those who have income from various sources but not from business or profession.

Here's a list of income of those who are eligible to file ITR-2:

• Individuals with income from:
  • Salary/pension
  • House property (one or more)
  • Capital gains/losses on investments or property (short-term or long-term)
  • Other sources (winnings from lottery, gambling, etc.)
• Residents with foreign income claiming foreign tax credits and disclosing foreign assets

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What are the steps to file ITR Form 2 with Capital Gains?

If you earn income through the sale of equity (Stocks), you must file an income tax return every year. Here's how to do it online through the Income Tax department portal:

Step-by-Step Guide:

• Step 1: Visit the official ITD (Income Tax Department) website and log in with your credentials.
• Step 2: Go to "e-File" > "Income Tax Returns" > "File Income Tax Returns."
• Step 3: Choose the assessment year, your filing status, and the appropriate ITR form. Select "Taxable income is more than basic exemption limit" as the reason for filing.
• Step 4: Under "Income Schedule," select "Schedule Capital Gains" and choose the type of equity asset you sold.
  • Capital Gains Types:
    • Short-Term Capital Gains (STCG): Taxed at 15% under Section 111A. Click "Add Details" and enter the total sale amount and cost of acquisition for short-term assets in the financial year.
    • Long-Term Capital Gains (LTCG): Taxed at 10% under Section 112A, but exempt up to Rs. 1 lakh. Provide details for each stock sold, including ISIN number, selling price, purchase price, and transaction dates. Click "Add" for each scrip (stock).
• Review and Download: Once you've filled in all the necessary schedules, confirm them, review Part B TT1, and preview your return. Download the ITR for further processing.
• Verification: On the declaration tab, provide the required details and proceed to validation. Finally, verify your ITR filing electronically or by sending a signed ITR-V hard copy to the Income Tax Department within 120 days.

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What are the Documents Required to File ITR 2 with Capital Gain?

When you file ITR 2 with capital gains, you need sets of general documents with additional documents for your capital gain. Here’s the list of documents you will need:

1. Stamp Duty Documents: Sales and purchase deeds, improvement cost details, etc., if the capital gain is from land or buildings.
2. Securities Transaction Documents: P&L statement from a broker, stock ledgers, contract notes, trading statements, etc., if the capital gain is from securities.
3. Other Capital Assets Documents: Improvement cost, details of expenses incurred while transferring capital assets, cost of purchase, etc., if the capital gain is from other capital assets.

Also, you should have:

• Aadhaar Card
• PAN Card (Permanent Account Number)
• TDS Certificates
• Challan of Paid Taxes
• Bank Account Details
• Original Return Details (if filing a revised return)
• Notice-Related Details (if filing in response to any notice)

Make sure you have all the relevant documents ready before filing your ITR-2 Form to report capital gains.

The due date for filing ITR is 31st July and it is fast approaching. File your ITR before it's too late to avoid penalties. If you need assistance with e-filing, our Online CAs are experts in accurately filing ITRs to maximize your refund. Book an eCA now!

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