IndiaITR-2

ITR-2 for equity investors: schedules, capital gains rules and when you need ITR-3

ITR-2 covers salary, capital gains and house property income. It is the right form for equity investors who have no business income. Here is which schedules matter, how Aktai Tax's output maps to them, and the one rule that pushes F&O traders to ITR-3 instead.

Who uses ITR-2

ITR-2 is designed for individuals and HUFs with income from salary or pension, one or more house properties, capital gains (equity, mutual funds, property, gold), and foreign income or foreign assets. It cannot accommodate business or professional income. If you trade only equity delivery (no F&O, no intraday), ITR-2 is correct. Add even one lot of F&O or one intraday equity trade and you must switch to ITR-3. See which ITR form traders should use.

Key ITR-2 schedules for equity investors

Schedule CG (Capital Gains)

Short-term capital gains (STCG) at 20% and long-term capital gains (LTCG) at 12.5% from equity shares and equity mutual funds. Separate sub-sections for listed shares and MFs.

Aktai Tax: Aktai Tax classifies each equity delivery trade by holding period and computes the STCG or LTCG per trade. The totals feed directly into Schedule CG.

Schedule 112A (Listed Equity LTCG)

Detailed LTCG reporting for listed equity shares and equity-oriented mutual funds where STT was paid. Each sale must be reported with acquisition date, cost, and full value of consideration.

Aktai Tax: Aktai Tax produces the per-trade 112A breakdown from your broker P&L exports, including the cost of acquisition for each lot.

Schedule OS (Other Sources)

Dividend income from shares and mutual funds, savings account interest, FD interest. Dividends are now taxable at your slab rate (not 10% DDT as before 2020).

Aktai Tax: Aktai Tax does not compute dividend income. Pull dividend data from your AIS and Form 26AS, then enter it here.

Schedule AL (Assets and Liabilities)

Mandatory for taxpayers with total income above ₹50 lakh. Discloses immovable property, financial assets, vehicles, jewellery, and liabilities.

Aktai Tax: Aktai Tax does not cover this schedule. Your CA prepares it from your personal balance sheet.

Schedule BFLA / CFL (Carry Forward and Set-Off)

Set off of capital losses brought forward from earlier years. STCL can be set off against STCG or LTCG; LTCL only against LTCG.

Aktai Tax: Bring-forward losses come from earlier ITR filings. Your CA or prior-year return has these figures. Aktai Tax handles current-year gains only.

Capital gains rates in AY 2026-27

STCG on listed equity / equity MF

Holding period under 12 months, STT paid

20%

LTCG on listed equity / equity MF

Holding period 12+ months, above ₹1.25 lakh annual exemption

12.5%

LTCG exemption limit

Per financial year across all listed equity and equity MFs

₹1.25 lakh

Dividend income

Taxable at your marginal rate since FY 2020-21

Slab rate

Rates effective AY 2026-27 (FY 2025-26). Verify against the latest Finance Act and consult a CA for your specific situation.

What Aktai Tax produces for your ITR-2

Upload your broker Tax P&L exports from Zerodha, Upstox, Dhan, Groww or Angel One. Aktai Tax identifies your equity delivery trades, classifies each by holding period (STCG or LTCG), and produces a per-trade breakdown suitable for Schedule 112A. It also computes the total STCG and LTCG figures for Schedule CG, and the deductible trading charges (brokerage, STT, exchange fees) per segment.

What Aktai does not cover: dividend and interest income (pull from AIS), assets and liabilities (Schedule AL, prepared by your CA), and the actual ITR-2 submission itself. See Aktai Tax hub for the full picture.

Common ITR-2 mistakes for equity investors

Using ITR-1 when you have capital gains

ITR-1 (Sahaj) cannot accommodate capital gains. If you sold even one listed share or mutual fund unit in the year, you need ITR-2 at minimum. ITR-1 with an equity sale is an invalid return.

Skipping Schedule 112A for LTCG trades

LTCG above ₹1.25 lakh must be reported trade-by-trade in Schedule 112A. Many filers enter only the total in Schedule CG and skip 112A. The department can flag this as incomplete.

Forgetting dividend income

Since FY 2020-21, dividends are taxable at your slab rate and go in Schedule OS. Many investors overlook dividends, especially if they were small or came from multiple sources. Check your AIS before filing.

Filing ITR-2 when you also have F&O income

F&O and intraday trading produce business income, which ITR-2 cannot accommodate. Using ITR-2 with F&O income placed under capital gains is an invalid return and may trigger a 143(1) adjustment.

Frequently asked questions

Who should file ITR-2?

ITR-2 is for individuals and HUFs who have income from salary, capital gains, house property, or foreign income, but no business or professional income. Equity investors, NRIs with Indian capital gains, and salaried professionals with equity investments typically file ITR-2.

Can a salaried person who also trades equity delivery use ITR-2?

Yes. Equity delivery trades produce capital gains, not business income. A salaried person with salary and equity delivery gains files ITR-2. The key boundary: if you also do F&O or intraday equity, those produce business income and force you to ITR-3.

What is the LTCG rate on listed equity in 2026?

LTCG on listed equity shares and equity mutual funds (where STT was paid) is taxed at 12.5% above ₹1.25 lakh per year (Budget 2024 change, effective AY 2025-26 and AY 2026-27). The grandfathering cut-off for pre-2018 holdings was January 31, 2018. STCG is taxed at 20% (also changed in Budget 2024, up from 15%).

What forces me from ITR-2 to ITR-3?

Any business or professional income: F&O trading (non-speculative business), intraday equity (speculative business), freelancing, consultancy fees. Even one lot of F&O in the financial year requires ITR-3. You can still report your salary and equity capital gains in ITR-3 alongside the business income.

When is ITR-2 due for AY 2026-27?

July 31, 2026, for non-audit cases. ITR-2 is almost always a non-audit form since it has no business income. File by July 31 to preserve loss carry-forward entitlement on capital losses.

Do I need to report each equity sale in ITR-2?

Yes. Schedule 112A requires per-transaction reporting for listed equity and equity MF sales where LTCG applies. You need the date of acquisition, date of sale, cost and sale value per lot. Aktai Tax produces this breakdown from your broker P&L files.

Aktai Tax · for Indian F&O and equity traders

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Estimates for your reference, verify with a qualified CA. For Indian traders.

Aktai Tax produces estimates and computations for your reference, not tax advice. It does not file returns and has no access to your bank or the income-tax portal. Verify every figure with a qualified Chartered Accountant.