ITR-2: Capital Gains, Multiple Houses, Foreign Income

ITR-2 replaces ITR-1 the day you sell a stock. Or receive foreign dividend. Or buy a second house. It is 20+ schedules, which sounds scary. But 80% of filers only fill 4 or 5 of them, and the portal pre-fills most. The leap from ITR-1 to ITR-2 feels intimidating; the reality is 20 extra minutes per year once you know which schedules actually apply.

By the end, you will know the ITR-2 schedules that actually matter for a typical salaried + investor, the 3 that trip most filers, and the Schedule FA penalty that catches tech employees.

Who files ITR-2

ITR-2 applies if: (a) total income > Rs. 50 lakh, (b) capital gains (equity, property, mutual funds), (c) more than one house property, (d) foreign income or foreign assets, (e) agricultural income > Rs. 5,000. ITR-2 does NOT apply if there is business or professional income (that goes to ITR-3 or ITR-4). Most salaried investors without freelance income land here after their first stock sale.

The schedules that matter

SCHEDULE SALARY. Pre-filled from AIS / Form 16; minor edits only if pre-fill missed something.
SCHEDULE HP (House Property). One row per property; self-occupied (one property max) or let-out with rental income.
SCHEDULE CG (Capital Gains). Equity, mutual funds, property, other assets. Split short-term vs long-term. Indexation (where applicable) computed here.
SCHEDULE OS (Other Sources). Bank interest, dividend, other income. Pre-filled from AIS.
SCHEDULE VIA (Deductions). 80C/80D/80E/80G etc. Only in old regime; new regime zeros out most.
SCHEDULE TDS and SCHEDULE TCS. Reconcile with 26AS; credit the tax withheld.
SCHEDULE FA (Foreign Assets). Mandatory if any foreign holding, even with zero income.

Portal pre-fills: salary (from Form 16 / AIS), interest (from AIS), dividend (from AIS), TDS (from 26AS), property transaction (from AIS for sales). Your work: verify pre-fill, add missed items, compute capital gains manually (portal helps but does not auto-compute cost basis adjustments), reconcile TDS.

The three that trip most filers

SCHEDULE CG cost-basis for corporate actions. Bonus, split, rights issues change cost basis. Portal does not auto-adjust; you provide the adjusted figure.
SCHEDULE FA completeness. Disclose all foreign holdings even with zero activity. Non-disclosure = Rs. 10L penalty. The "I did not sell, so I do not need to disclose" is wrong.
SCHEDULE AL (Assets and Liabilities). Mandatory if income > Rs. 1 crore; easily missed. Lists all assets at year-end with cost + market value.

Schedule FA is mandatory; non-filing = Rs. 10 lakh penalty

Even one share of Apple held via Vested / IndMoney triggers Schedule FA. Not knowing is not a defence; Black Money Act penalty is flat Rs. 10 lakh per year of non-disclosure, independent of income tax. Tech employees with US-listed ESOPs discover this two years into their careers.

Schedule FA is mandatory; non-filing = Rs. 10 lakh penalty

Any foreign holding (even 1 Apple share) triggers Schedule FA. Not knowing is not a defence. Rs. 10L penalty under Black Money Act 2015, independent of income tax.

Schedule AL for income > Rs. 1 crore

Taxpayers with income > Rs. 1 crore must file Schedule AL (Assets and Liabilities). Lists immovable property, vehicles, jewellery, financial assets > Rs. 50k. Easily overlooked by high earners; portal validates and flags on submission.

Multiple Form 16s from different employers

Switched jobs mid-year: two Form 16s. ITR-2 aggregates both under Schedule Salary. New employer may not have computed TDS accounting for old-employer salary; resulting under-deduction shows up as self-assessment tax due at filing.

Key Takeaways

ITR-2: salaried + capital gains OR multiple house OR foreign income.
Schedule CG is where most work is. Manual cost-basis adjustments for corporate actions.
Schedule FA is mandatory for any foreign asset. Rs. 10L penalty for non-disclosure.
Portal pre-fills salary, interest, dividend, TDS. Verify before submission.
Most filers use ~5 of the 20 schedules; 80/20 principle applies.