ITR-2 filing for AY 2026-27: Step-by-step guide to file income tax returns correctly before 31 July deadline

Are you planning to file your income tax returns, as the 31 July deadline is rapidly approaching? Have you consulted a tax planner or filing expert to guide you with the return submission process?

While filing income tax returns is mandatory for all registered taxpayers with taxable income, not all taxpayers file the same form. Taxpaying individuals with capital gains or losses, multiple properties or foreign assets are required to file ITR-2, instead of the simple ITR-1.

To make the filing process easier for such individuals, here is a clear breakdown of who should use this ITR-2 form, its basic features, and how to file tax returns correctly using this form on the e-filing portal before the deadline.

Who needs ITR-2 for AY 2026-27

If your total income, along with your salary, goes beyond simple payments to a single house property, such as capital gains from equities, mutual funds or ownership of several properties, foreign assets or agricultural income over ₹5,000, then ITR-2 is the form that you should fill.

This form is designed for taxpayers with capital gains, several properties or foreign income sources. All company directors, board members, NRIs and those holding unlisted equity shares also come under this category.

Furthermore, do keep in mind that the deadline to file ITR-2 for FY 2025-26 (AY 2026-26) is 31 July 2026. It is important to meet this deadline, as failure to do so will mean losing the ability to carry forward capital gains or even capital losses to save on interest in later years, along with late fees, in case of improper compliance with the taxation authorities.

Filing process on e-filing portal

To begin with, you should log in to the income tax e-filing portal with your basic credentials, such as PAN details and password. If you have forgotten your password, you can first recover it by following the steps provided on the official website.

Furthermore, navigate to the ‘e-File’ tab and then to the ‘Income Tax Returns’ and select the option ‘File Income Tax Returns’, then carefully select the assessment year 2026-27. Now, select the online mode and the system will pre-fill most of your details from AIS, TIS and Form 26AS. Once the data is reflected, check it again for errors, deductions and omissions with your own records before moving ahead with the tax submission.

Once you select ITR-2, carefully work through each schedule. Focus on categories such as salary, house property, capital gains (short- and long-term), and other income, such as dividends or interest. The capital gains section is generally the most complex and detailed, requiring separate entries for equity and non-equity assets, along with acquisition dates, sale and purchase details and indexed cost calculations for older holdings.

Choose between the old and new tax regimes based on which saves you more; the portal usually shows a comparison. You should decide this after having a clear discussion with a tax professional, so that your decisions remain sound and meaningful.

After reviewing auto-filled TDS details against Form 26AS, preview your return, fix any flagged errors or omissions, and pay outstanding tax if applicable. Finally, submit and e-verify your return via Aadhaar OTP or net banking, within 30 days, since an unverified return doesn’t count as filed and could be treated as ‘defective’ or if you never submitted it. For clarity, let us look at the step-by-step process:

Bottom line

Having a fair understanding of taxation procedures and continuously staying abreast of recent developments is now indispensable for all taxpayers. It is prudent to consult tax experts to update your understanding of tax matters.

It may be noted that ITR-2 filing has now become far more automated and user-friendly on the income tax portal. Still, accuracy in capital gains details and foreign assets remains the taxpayers’ responsibility. Verify the form carefully before submitting to avoid regrets and tax notices later.