How to report capital gains in your income tax return

Which form?

If you also have business or freelance income, use ITR-3 instead.

Keep these ready

• Your broker's capital gains or tax P&L report.
• The capital gains statement from CAMS or KFintech for mutual funds.
• For property: the purchase and sale deeds, the stamp duty value, receipts for improvements, and the TDS shown in Form 26AS.
• For shares or units bought before 1 February 2018: their value on 31 January 2018.
• Your Annual Information Statement (AIS), to check every sale it shows.

Where each gain goes in ITR-2

• Schedule CG: all capital gains, by type of asset, with the cost, sale value and any exemption for a new house or bonds.
• Schedule 112A: long-term gains on listed shares and equity funds. Shares or units bought before 1 February 2018 are listed one by one with their 31 January 2018 value.
• Schedule CFL: losses carried forward from earlier years, and this year's loss to carry on.
• Schedule FA: foreign shares and accounts, if you're resident and ordinarily resident, even when nothing was sold.

The tax at special rates is worked out from these automatically.

Which law?

A return for FY 2025-26, including a late one filed by 31 December 2026, follows the Income-tax Act, 1961, so the forms use the old section numbers, such as 54, 54F and 54EC. Sales from 1 April 2026 fall under the Income-tax Act, 2025, where these are sections 82, 86 and 85.

Common mistakes

• Leaving out a sale because there was no gain. Every sale in your AIS should be in your return.
• Filing late with a loss: it can't then be carried forward.
• Using ITR-1 with short-term gains: the wrong form can bring a defective-return notice.
• Forgetting the TDS a property buyer deducted, so you pay the tax twice.