AC 2 tier and AC 3 tier in Indian Railway represents two class of compartments. The main difference between AC 2 tier and AC 3 tier is that in AC 2 tier you won't have the middle berth which you see on AC 3 tier and sleeper class compartments. Instead, you will just have the lower berth and the upper berth.
The train charge is high in AC 2 tier when compared to AC 3 tier and Sleeper Class. Everything else is similar to AC 3 tier. You will get a total of 3 bed sheets including one woolen bed sheet and cleaner compartments in AC 2 tier. It will be less crowded and you can choose it if you want privacy. Toilets are much cleaner than in sleeper compartments.