The ITR-2 form is an essential document used for filing income tax returns in India. The income tax department has classified taxpayers on multiple grounds, including your income and its origins. This ensures a more efficient and simplified approach towards the income tax process,
The ITR-2 form is for individuals and Hindu-Undivided Families (HUFs) who do not have income coming in from any business or profession. Read on to know more about the eligibility and how to file your income tax return using the ITR-2 form.
What is ITR-2 Form?
As mentioned, ITR-2 is specifically for individuals and the Hindu-Undivided Families (HUFs) categories that are not involved in any business or profession. Whether you are required to fill the form for income tax return purposes depends upon your source of income.
You may need to fill the ITR-2 form if the sources of your income are:
- A salary from a job
- Rental income
- Income from selling assets
- Any other source apart from a business or profession
This form contains the necessary income information and personal details. This makes sure that you pay the right amount of tax and helps in avoiding issues. You need to submit this form to the income tax department.
This helps the government in processing your tax payment smoothly and hassle-free. It also helps in avoiding any consequences associated with the non-payment of tax.
Who is Eligible to Use ITR-2 Form for Filing Income Tax Return?
Here are the individuals and entities eligible for using the ITR-2 form for filing income tax returns.
- Resident/non-resident individual
- Hindu Undivided Family (HUF)
- Director of a company
- Having investments in unlisted equity shares
- Incomes from salaries, 2 or more house properties, capital gains, interest or dividend incomes
- Foreign assets like share dividends from companies abroad
- Income tax on Employee Stock Option plans (ESOPs) that you may get from an eligible start up
- No income under profits and gains of business and profession
- Losses that are carried forward as well as brought forward under ‘Income from house property’
- Income from lottery or gambling
- Subject to TDS for specific cash withdrawals in FY 2022-23
- Agricultural income exceeding ₹5,000
- Claiming treaty relief according to the double taxation avoidance agreement
- Capital gains by selling virtual digital assets
- Signing power in any account abroad
- No income received as interest, bonus commission, remuneration as well as salary from a partnership firm
Who is Not Eligible to Use ITR-2 Form for Filing Income Tax Return?
There are a few individuals and entities that are not eligible to use the ITR-2 form for filing income tax returns.
- Individual or Hindu Undivided Family (HUF) having full or partial from business or profession
- Partners in a partnership firm
- Individuals or entities eligible to file ITR-1 Form
Document Requirements for an ITR-2 Form:
Check out the documents required for filing an ITR-2 form. Knowing these paperwork requirements beforehand can ensure a hassle-free experience.
- Copy of the tax return of last year
- Bank statements
- Tax Deductible at Source (TDS) certificate
- Savings certificate or Deductions
- Interest statement that demonstrates the interest that is paid during the year
- Balance sheet, profit and loss account, account statement, and other financial reports as per the requirements
Process of Filing ITR-2 Form:
Here is the process of filing an ITR-2 form for filing income tax returns in India.
Step 1: Visit the official website of income tax e-filing
Step 2: Log in to your portal by typing in your user identity, which is your PAN number, your password, along with a CAPTCHA code
Step 3: Find and click on ‘e-File’ from the menu and then click on ‘Income Tax Return’
Step 4: Add the ‘Assessment Year,’ and then the ‘ITR Form Number’
Step 5: Choose the ‘Filing Type’ option and then select the ‘Original/Revised Return’ option and click on ‘Continue’
Step 6: Fill the ITR-2 form by putting the required details
Step 7: Go to ‘Taxes Paid’ and click on ‘Verification’ from the tab
Step 8: Verify the income tax return by choosing one of the options: “e-verification within 120 days from the date of filing the ITR” or “Verification by a signed ITR-V through the post within 120 days from the date of filing ITR”
Step 9: Verify the data that you have added in your ITR form and then click on ‘Preview and Submit.
The ITR-2 form is categorized into 2 sections. The structure consists of 2 parts – Part A and Part B. Part A of the form consists of general information and Part B includes the computation of total income, liabilities and other calculations
Now that you know the eligibility and filing process for ITR-2, make sure you file your returns on time. Re-check and verify that you enter the correct personal details and other information to avoid the hassles and fine of updating or revising your returns.