Introduction<\/p>\n
For individuals and Hindu Undivided Families (HUFs) having income from capital gains, correct reporting of the sale of shares, mutual funds, land, buildings, and other capital assets is an important part of income tax return filing.<\/p>\n
For AY 2026-27, eligible taxpayers can use ITR-2 where they do not have income chargeable under the head \u201cProfits and Gains of Business or Profession.\u201d ITR-2 specifically contains Schedule CG \u2013 Capital Gains, along with Schedule 112A for specified transactions involving equity shares, equity-oriented mutual funds, and units of business trusts on which STT is paid.<\/p>\n
This article explains how capital gains from shares, mutual funds, and property should generally be reported in ITR-2 for AY 2026-27.<\/p>\n
Who Can File ITR-2 for AY 2026-27?<\/p>\n
ITR-2 is applicable to individuals and HUFs who do not have income from business or profession and have income from sources such as:<\/p>\n
Salary or pension<\/p>\n
House property<\/p>\n
Capital gains<\/p>\n
Income from other sources<\/p>\n
Agricultural income exceeding the applicable threshold<\/p>\n
Certain other specified sources<\/p>\n
ITR-2 can also be applicable where an individual is a director in a company or has held unlisted equity shares during the relevant previous year.<\/p>\n
If the taxpayer has income taxable under Profits and Gains of Business or Profession, ITR-2 is generally not the appropriate return form.<\/p>\n
What is Schedule CG in ITR-2?<\/p>\n
Schedule CG is the section of ITR-2 used to report capital gains or capital losses arising from the transfer of capital assets.<\/p>\n
The Income Tax Department’s current ITR-2 guidance provides separate reporting for different categories of capital assets and requires taxpayers to report their short-term and long-term capital gains\/losses.<\/p>\n
The broad categories include:<\/p>\n
Sale of land or building<\/p>\n
Sale of equity shares<\/p>\n
Sale of equity-oriented mutual fund units<\/p>\n
Sale of other securities<\/p>\n
Other capital assets<\/p>\n
Specified transactions taxable at special rates<\/p>\n
Capital Gains on Shares<\/p>\n
Shares may generate either Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) depending on the nature of the shares and the applicable holding period.<\/p>\n
For example, listed equity shares generally have a shorter holding-period requirement for determining whether the asset is long-term compared with many other capital assets.<\/p>\n
The ITR-2 Schedule CG captures the relevant sale consideration, cost and other applicable details.<\/p>\n
Information You Should Keep Ready<\/p>\n
For share transactions, taxpayers should maintain:<\/p>\n
Name of the company<\/p>\n
ISIN, where applicable<\/p>\n
Date of purchase<\/p>\n
Date of sale<\/p>\n
Number of shares<\/p>\n
Purchase cost<\/p>\n
Sale consideration<\/p>\n
Brokerage and eligible transfer expenses<\/p>\n
STT details<\/p>\n
Demat statement<\/p>\n
Broker’s capital gains statement<\/p>\n
Schedule 112A \u2013 Important for Equity Shares and Equity-Oriented Mutual Funds<\/p>\n
Schedule 112A is particularly important where the taxpayer has transferred:<\/p>\n
Equity shares of a company,<\/p>\n
Units of an equity-oriented mutual fund, or<\/p>\n
Units of a business trust,<\/p>\n
and the transaction falls within the specified provisions relating to STT.<\/p>\n
The Income Tax Department specifically states that Schedule 112A is used for reporting such transactions.<\/p>\n
Taxpayers should carefully reconcile Schedule 112A with their broker or mutual fund capital gains statement.<\/p>\n
Important Point for Older Investments<\/p>\n
Where specified shares were acquired on or before 31 January 2018, the ITR-2 instructions require scrip-wise reporting in Schedule 112A in the applicable cases.<\/p>\n
Therefore, taxpayers with older investments should maintain historical purchase information and not rely solely on the current market value shown in their demat statement.<\/p>\n
Capital Gains on Mutual Funds<\/p>\n
Mutual fund transactions should also be classified correctly based on the nature of the fund and the applicable tax provisions.<\/p>\n
Common transactions include:<\/p>\n
Equity mutual funds<\/p>\n
Debt mutual funds<\/p>\n
Hybrid funds<\/p>\n
International funds<\/p>\n
Other specified mutual fund units<\/p>\n
The taxation of mutual fund units can differ depending on the nature of the investment and the applicable law.<\/p>\n
Therefore, taxpayers should not simply calculate:<\/p>\n
Sale Value \u2013 Purchase Value = Taxable Capital Gain<\/p>\n
without first determining the applicable tax treatment.<\/p>\n
Documents Required for Mutual Fund Capital Gains<\/p>\n
It is advisable to obtain:<\/p>\n
Consolidated Account Statement (CAS)<\/p>\n
Mutual fund capital gains statement<\/p>\n
Transaction statement<\/p>\n
Purchase and redemption details<\/p>\n
Dividend\/distribution information, where relevant<\/p>\n
Applicable tax statements<\/p>\n
The capital gains statement should ideally be reconciled with the taxpayer’s bank account and investment records.<\/p>\n
Capital Gains on Sale of Property<\/p>\n
The sale of land, building, or both requires particular attention while filing ITR-2.<\/p>\n
The current ITR-2 instructions require capital gains from transfer of land\/building to be reported separately for each property.<\/p>\n
The taxpayer should therefore maintain complete documentation relating to the property transaction.<\/p>\n
Information Generally Required<\/p>\n
Date of purchase<\/p>\n
Date of sale<\/p>\n
Purchase consideration<\/p>\n
Sale consideration<\/p>\n
Stamp duty value<\/p>\n
Cost of improvement<\/p>\n
Transfer expenses<\/p>\n
Details of buyer<\/p>\n
Ownership percentage<\/p>\n
Applicable exemption claimed, if any<\/p>\n
Stamp Duty Value and Section 50C<\/p>\n
For transfer of land or building, the stamp valuation provisions under Section 50C can become relevant.<\/p>\n
The ITR form contains fields for:<\/p>\n
Full value of consideration received\/receivable<\/p>\n
Value adopted by the stamp valuation authority<\/p>\n
Full value of consideration adopted under Section 50C, where applicable<\/p>\n
The notified ITR form specifically provides for these details in the capital gains schedule.<\/p>\n
Accordingly, taxpayers should retain the registered sale deed and relevant valuation\/stamp duty documentation.<\/p>\n
Long-Term vs Short-Term Capital Gains<\/p>\n
Correctly determining whether a gain is short-term or long-term is essential because the applicable tax treatment can differ.<\/p>\n
The holding period depends on the type of capital asset.<\/p>\n
For example, the Income Tax Department’s guidance notes different holding-period rules for listed shares, equity-oriented mutual fund units, unlisted shares, and immovable property.<\/p>\n
Taxpayers should therefore determine the holding period asset-wise rather than applying one common rule to all investments.<\/p>\n
Capital Losses in ITR-2<\/p>\n
A taxpayer may also have:<\/p>\n
Short-term capital loss (STCL)<\/p>\n
Long-term capital loss (LTCL)<\/p>\n
These losses should be reported correctly in Schedule CG.<\/p>\n
Depending on the applicable provisions, eligible capital losses may be carried forward and set off against capital gains in subsequent years, subject to the prescribed conditions and filing requirements.<\/p>\n
Therefore, taxpayers should not ignore capital losses simply because there is no immediate tax liability.<\/p>\n
Capital Gains Tax Rates for AY 2026-27<\/p>\n
The tax rates applicable to capital gains depend on the type of asset, date of transfer, and relevant provisions of the Income-tax Act.<\/p>\n
For AY 2026-27, the ITR-2 form reflects the applicable capital gains rate structure, including separate reporting for short-term gains taxable at specified rates.<\/p>\n
It is therefore important to calculate the capital gain using the rules applicable to the particular asset instead of applying a uniform capital gains rate.<\/p>\n
Important Change in ITR-2 for AY 2026-27<\/p>\n
One important point for AY 2026-27 is that the requirement to bifurcate capital gains based on whether the transfer took place before or after 23 July 2024 has been removed from the ITR-2 reporting structure.<\/p>\n
The Income Tax Department has specifically clarified this change in its AY 2026-27 ITR-2 FAQs.<\/p>\n
This simplifies the reporting process compared with earlier return forms.<\/p>\n
How to Report Capital Gains in ITR-2<\/p>\n
A practical approach is as follows:<\/p>\n
Step 1 \u2013 Collect Investment Statements<\/p>\n
Collect:<\/p>\n
Demat statement<\/p>\n
Broker statement<\/p>\n
Mutual fund capital gains statement<\/p>\n
Property sale documents<\/p>\n
Purchase documents<\/p>\n
Step 2 \u2013 Prepare Capital Gains Working<\/p>\n
Calculate the capital gain\/loss separately for:<\/p>\n
Shares<\/p>\n
Mutual funds<\/p>\n
Property<\/p>\n
Other capital assets<\/p>\n
Step 3 \u2013 Classify the Assets<\/p>\n
Determine whether each transaction results in:<\/p>\n
STCG<\/p>\n
LTCG<\/p>\n
STCL<\/p>\n
LTCL<\/p>\n
Step 4 \u2013 Report in Schedule CG<\/p>\n
Enter the relevant transaction details under the appropriate category in Schedule CG.<\/p>\n
Step 5 \u2013 Complete Schedule 112A<\/p>\n
Where applicable, report qualifying equity share, equity-oriented mutual fund and business trust transactions in Schedule 112A.<\/p>\n
Step 6 \u2013 Verify Tax Computation<\/p>\n
After completing the schedules, review:<\/p>\n
Total income<\/p>\n
Capital gains<\/p>\n
Capital losses<\/p>\n
Applicable special-rate taxation<\/p>\n
TDS<\/p>\n
Advance tax<\/p>\n
Self-assessment tax<\/p>\n
Refund or tax payable<\/p>\n
Documents to Keep for ITR Filing<\/p>\n
Taxpayers having capital gains should preferably maintain the following records:<\/p>\n
For Shares<\/p>\n
Broker capital gains statement<\/p>\n
Contract notes<\/p>\n
Demat statement<\/p>\n
Purchase records<\/p>\n
Sale records<\/p>\n
For Mutual Funds<\/p>\n
CAS<\/p>\n
Mutual fund capital gains statement<\/p>\n
Transaction statement<\/p>\n
Redemption statements<\/p>\n
For Property<\/p>\n
Purchase deed<\/p>\n
Sale deed<\/p>\n
Stamp valuation details<\/p>\n
Improvement bills<\/p>\n
Brokerage bills<\/p>\n
Legal expenses, where eligible<\/p>\n
Details of reinvestment, if claiming an applicable exemption<\/p>\n
Common Mistakes While Reporting Capital Gains<\/p>\n
Taxpayers sometimes enter only the net profit without maintaining the underlying transaction details.<\/p>\n
A proper capital gains working should be prepared before entering figures in the ITR.<\/p>\n
Capital losses should be properly reported where applicable because eligible losses may have future tax value.<\/p>\n
The holding period must be determined according to the rules applicable to the specific asset.<\/p>\n
The capital gains reported in the ITR should be reconciled with broker, demat and mutual fund statements.<\/p>\n
For property transactions, taxpayers should carefully verify sale consideration, stamp duty value, purchase cost, improvement cost and ownership percentage.<\/p>\n
AIS and other pre-filled information can be useful for reconciliation, but taxpayers should independently verify the information against their actual records and transaction statements.<\/p>\n
ITR-2 Filing \u2013 Online and Offline Options<\/p>\n
The Income Tax Department provides online filing facilities for ITR-2. It also provides an Excel-based utility for AY 2026-27.<\/p>\n
The Department’s downloads section currently lists the AY 2026-27 ITR-2 Excel utility, with the latest listed version released on 17 July 2026.<\/p>\n
Taxpayers should use the latest available utility\/version at the time of filing.<\/p>\n
Final Checklist Before Filing ITR-2<\/p>\n
Before submitting the return, verify:<\/p>\n
All share transactions have been considered.<\/p>\n
Mutual fund redemptions have been reconciled.<\/p>\n
Property transactions have been correctly reported.<\/p>\n
STCG and LTCG have been separately identified.<\/p>\n
Capital losses have been considered.<\/p>\n
Schedule 112A has been completed wherever applicable.<\/p>\n
Purchase costs and transfer expenses have been verified.<\/p>\n
Property stamp duty value has been checked.<\/p>\n
TDS has been reconciled with Form 26AS\/AIS.<\/p>\n
Bank account details are correct.<\/p>\n
Tax payable\/refund has been verified.<\/p>\n
Conclusion<\/p>\n
For taxpayers with capital gains, ITR-2 for AY 2026-27 provides dedicated schedules for reporting gains from shares, mutual funds, property and other capital assets.<\/p>\n
The most important aspect is not merely entering the final capital gain figure but ensuring that the underlying transactions are correctly classified, reconciled and reported in the appropriate schedules.<\/p>\n
Investors should obtain their broker and mutual fund statements, maintain proper property documentation, calculate capital gains asset-wise, and carefully review Schedule CG and Schedule 112A before submitting the return.<\/p>\n","protected":false},"excerpt":{"rendered":"
Learn how to report capital gains from shares, mutual funds and property in ITR-2 for AY 2026-27. Understand Schedule CG, Schedule 112A, capital losses, documents and common filing mistakes.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-990","post","type-post","status-publish","format-standard","hentry","category-income-tax"],"_links":{"self":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts\/990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/comments?post=990"}],"version-history":[{"count":2,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts\/990\/revisions"}],"predecessor-version":[{"id":1504,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts\/990\/revisions\/1504"}],"wp:attachment":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/media?parent=990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/categories?post=990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/tags?post=990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}