The choice of the ITR (Income Tax Return) form for filing income tax returns is determined by the taxpayer's residential status and the nature of their income from various sources. Hindu Undivided Families (HUFs) and individuals earning income that does not fall under the 'Profit and Gains from Business or Profession' category are required to use ITR Form 2 for submitting their income tax returns.
What is ITR-2?
The ITR 2 Form is a significant income tax return document utilized by both Indian citizens and Non-Resident Indians (NRIs) to file their returns with the Income-tax department of India. It serves as an alternative for taxpayers who do not meet the eligibility criteria for filing ITR 1.
ITR 2 can be employed by individuals and Hindu Undivided Families (HUFs) whose income during the financial year comprises components such as salary, pension, ownership of multiple properties, earnings from capital gains, income generated from foreign assets, involvement in business or a profession as a partner, and various other sources including lottery winnings, racehorses, and legal gambling.
Additionally, individuals with a total income exceeding Rs. 50 lakh, who are ineligible for ITR 1, can make use of the ITR 2 Form for tax return filing.
Who Can Utilize Form ITR-2?
Form ITR-2 is suitable for individuals and Hindu Undivided Families (HUFs) who do not meet the eligibility criteria for filing Form ITR-1 and derive income from the category of "profits and gains from business or profession." Consequently, individuals with income originating from the following sources are eligible to file Form ITR-2:
Income from Salary/Pension
Income from House property (including income from multiple house properties)
Income from Capital gains
Income from other sources (such as Lottery winnings, bets on horses, and other forms of gambling)
Foreign Assets/Foreign Income
Agricultural income exceeding Rs. 5,000
Residents who are not ordinary residents and NRIs
Directors of companies
Individuals invested in unlisted equity shares of a company
Who Cannot File Form ITR-2?
Individuals or Hindu Undivided Families (HUFs) with income derived wholly or partially from business or profession.
Individuals who meet the eligibility criteria for filing ITR-1.
Individuals who are partners in a Partnership Firm.
Tax & Process
Step 1: Gather Essential Documents and Information: Before you commence the filing process, make sure you have all the documents and information ready:
Login with Credentials: Visit www.incometax.gov.in and log in using your appropriate login credentials.
Step 2: Choose the Correct Assessment Year
When filing your ITR-2, select the appropriate assessment year and indicate whether you're filing the return online or offline. The assessment year is the year following the financial year for which you're filing the return. For instance, if you're filing for the financial year 2022-2023, the assessment year will be 2023-2024.
Step 3: Select the Assessee's Status
Next, choose the status of the assessee. ITR-2 is primarily for individuals and HUFs. The system may prefill this based on the status you selected when registering on the income tax portal.
Step 4: Select the ITR-2 Form
Proceed by selecting the ITR-2 form from the drop-down menu. Once enabled for filling, provide necessary details such as the reason for filing, personal details confirmation, bank account validation, nature of employment, etc. Ensure the accuracy of the entered figures and double-check for errors or omissions.
Step 5: Provide Income Details
In this section, provide detailed information about your income from various sources, including salary, rental income, capital gains, and other sources. Fill in the required fields accurately and ensure you have the supporting documents. Also, complete the necessary details in the provided schedules if applicable.
Step 6: Deductions and Taxable Income
Specify the deductions you are eligible for under various sections of the Income Tax Act. This includes deductions for investments, insurance premiums, home loans, and other permissible expenses. Select appropriate deductions from the dropdown menu and calculate your taxable income after applying them.
Step 7: Compute Your Tax Liability
The form will automatically calculate your tax liability based on the income details provided, taking into account deductions and exemptions available to you. Ensure the correct import of TDS/TCS/Advance Tax details from Form 26AS.
Step 8: Validate, Verify, and Generate the JSON File
Validate the ITR-2 form using the validation criteria provided on the income tax website to ensure it is error-free and ready for submission. After validation, generate the JSON file and file it online.
Step 9: Verify the Return
Verify your return after successfully filing the JSON file. Several verification methods are available, including using an electronic verification code (EVC), Aadhar OTP, digital signature, or sending a signed physical copy to the Centralized Processing Centre (CPC) if electronic verification isn't possible.
Step 10: Acknowledgment and Verification
Once your return is successfully verified, the income tax department will issue an acknowledgment receipt to your registered email address. Keep this acknowledgment for future reference.
Copy of the previous year's tax return
TDS (Tax Deducted at Source) Certificate
Interest Statements reflecting interest payments throughout the year
Balance sheets, Profit and loss statements, Account Statements, and other applicable Audit reports, as required.
What is the ITR-2 Filing Deadline?
The typical due date for filing ITR-2 is July 31st of the assessment year. However, the government may extend this deadline when necessary.
Can I Submit the ITR-2 Online?
Certainly, you can file ITR-2 online using the official Income Tax Department website or authorized e-filing platforms.
Should one attach documents with ITR-2?
No, ITR-2 is an annexure-less form, and there's no need to attach any documents when submitting it.
What Are the Late Filing Penalties for ITR-2?
If you file ITR-2 after the due date but before December 31st of the assessment year, you may be subject to a late filing fee of up to Rs 10,000.
Can I Revise My Filed ITR-2?
Yes, you can revise your ITR-2 within a specified time frame if you identify any errors or omissions.