Taxpayers with total income exceeding ₹5,000 from agricultural sources, multiple properties, or foreign assets must file ITR-2 for AY 2026-27 instead of the simpler ITR-1 form. According to reports from Mint, this form is specifically designed for individuals with capital gains from equities, mutual funds, or multiple properties, along with company directors, board members, NRIs, and those holding unlisted equity shares. The deadline to file ITR-2 for FY 2025-26 (AY 2026-27) is 31 July 2026. Failure to meet this deadline results in losing the ability to carry forward capital gains or losses, along with late fees for improper compliance. For individuals with income up to ₹5 lakhs, the late filing penalty is ₹1,000, while those with income above ₹5 lakhs face a penalty of ₹5,000.
A resident salaried taxpayer can file ITR-1 when they have the following incomes and expenses: income from salary, income or loss from two house properties (excluding brought forward losses and losses to be carried forward), long-term capital gains taxable under Section 112A not exceeding ₹1.25 lakh, family pension, income from other sources including winnings from lottery and race horses, if you have spent over ₹2 lakh on foreign travel, if you have paid over ₹1 lakh in electricity bills, if you have paid ₹25,000 or more as TDS (₹50,000 for senior citizens), and if you have kept ₹50 lakh or more in savings bank account. However, once a salaried taxpayer starts having income sources, assets, capital gains, foreign holdings, loss set-offs, or other tax reporting requirements that fall outside the purview of ITR-1, they must switch to ITR-2.
ITR-2 becomes mandatory when a salaried person's income and disclosures are more complex than what can be reported in ITR-1. Common situations requiring ITR-2 include when total income exceeds ₹50 lakh, when you are a director in any company, when tax payment on ESOPs allotted by an eligible start-up has been deferred, when you have income or loss from more than two house properties, when you have long-term capital gains exceeding ₹1.25 lakh, if you held unlisted equity shares at any time during the previous year, if you have capital gains/loss on sale of investments/property, if you have dividend income exceeding ₹10 lakh taxable under Section 115BBDA, if you have unexplained income such as cash credit or unexplained investment taxable at 60% under Section 115BBE, if you are claiming deductions under Section 57, 80QQB, 80RRB, or 10AA, if you have agricultural income over ₹5,000, if you have brought forward losses or losses to be carried forward under any head of income, when you are taxable but TDS has been deducted by another person, when you have income from foreign sources or foreign assets including financial interest in any foreign entity, when income needs apportionment under Section 5A, if tax has been deducted on cash withdrawal under Section 194N, if you have deposited more than ₹1 crore in current accounts, if you have spent over ₹2 lakh on foreign travel, if you have spent over ₹1 lakh on electricity bills, or if you have paid ₹25,000 or more as TDS.
The filing process begins by logging into the income tax e-filing portal using PAN details and registered password. As reported by Mint, taxpayers must navigate to the 'e-File' tab, select 'Income Tax Returns', and choose 'File Income Tax Returns' for assessment year 2026-27. The system pre-fills most details from AIS, TIS, and Form 26AS, which should be cross-checked against personal income records. The most complex section involves capital gains reporting, requiring separate entries for equity and non-equity assets with acquisition dates, sale details, and indexed cost calculations for older holdings. After completing all schedules and choosing between old and new tax regimes, taxpayers must e-verify their return within 30 days via Aadhaar OTP or net banking to ensure proper filing. According to GoCredit, taxpayers should gather Form 16, Form 26AS, AIS (Annual Information Statement), capital gains statements from brokers, and bank interest certificates before beginning the filing process. If your income is above ₹50 lakhs or you've claimed certain deductions, you need to download the ITR-V form and get it verified by a CA or sign it digitally using your Aadhaar OTP.
