The Indian Income Tax Department has recently opened the ITR-2 filing window, enabling individuals and Hindu Undivided Families (HUFs) to report their non-business income from various sources. ITR-2 holds significant relevance for taxpayers who earn income from sources such as salary, pension, house property, capital gains, or other non-business sources, making it imperative for taxpayers to understand the process of ITR-2 filing.
Understanding ITR-2
ITR-2 is an abbreviation for “Income Tax Return Form-2.” It is a form prescribed by the Indian Income Tax Department for filing income tax returns by individuals and Hindu Undivided Families (HUFs) who do not have any income from business or profession. ITR-2 is primarily used by taxpayers who have income from sources such as salary, pension, house property, capital gains, and income from other sources.
Who need to file ITR 2?
The following individuals and Hindu Undivided Families (HUFs) need to file Income Tax Return Form-2 (ITR-2):
i. Individuals and HUFs who have income from sources other than business or profession: If you have income from salary, pension, house property, capital gains, or income from other sources and do not have any income from business or profession, you would generally need to file ITR-2.
ii. Resident and non-resident individuals and HUFs: Both resident and non-resident individuals and HUFs can file ITR-2. Non-resident Indians (NRIs) who have income in India that is not covered under ITR-1 (Sahaj) typically use ITR-2.
iii. Individuals and HUFs with more than one residential property: If you own more than one residential property, regardless of the nature of income from these properties (whether self-occupied, let-out, or deemed to be let-out), you would need to file ITR-2 to report the details of all the properties.
iv. Individuals and HUFs with income from foreign sources or holding foreign assets: If you have income from foreign sources or hold any foreign assets such as foreign bank accounts, foreign investments, or immovable property outside India, you would need to file ITR-2 and provide the necessary details.
Who can not file ITR 2?
The following individuals and Hindu Undivided Families (HUFs) cannot file Income Tax Return Form-2 (ITR-2):
i. Individuals and HUFs with income from business or profession: If you have income from business or profession, whether as a self-employed individual, a freelancer, or a proprietor of a business, you cannot use ITR-2. In such cases, you would need to use the appropriate ITR form for reporting business income, such as ITR-3, ITR-4, depending on the nature and type of business.
ii. Individuals and HUFs who qualify for ITR-1 (Sahaj): If you meet the eligibility criteria for filing ITR-1, which is a simpler form for individuals with income from salary, pension, one house property, and other sources, you should use ITR-1 instead of ITR-2. Generally, individuals with relatively straightforward income and no business income can use ITR-1.
iii. Individuals and HUFs who are eligible for presumptive taxation: If you are eligible for presumptive taxation under Section 44AD, 44ADA, or 44AE of the Income Tax Act, you cannot use ITR-2. In such cases, you would need to use the relevant presumptive taxation ITR form, such as ITR-4.
How to file ITR 2?
To file Income Tax Return Form-2 (ITR-2) in India, you can follow these steps:
i. Gather the required documents: Collect all the necessary documents related to your income, deductions, and investments. This may include Form-16 (issued by your employer), TDS certificates, bank statements, details of capital gains, details of foreign assets (if applicable), and any other relevant supporting documents.
ii. Download the ITR-2 form: Visit the official website of the Income Tax Department of India (https://www.incometax.gov.in/) and download the latest ITR-2 form in Excel or Java utility format.
iii. Fill in the form: Open the downloaded ITR-2 form in the respective utility and fill in the required details accurately. Provide your personal information, income details, deductions, and other relevant information as per the instructions provided in the form.
iv. Calculate tax liability: Once you have filled in the necessary details, the form will automatically calculate your tax liability based on the income and deductions provided. Verify the calculations and ensure accuracy.
v. Validate and generate JSON file: Validate the filled-in form to check for any errors or inconsistencies. Once the form passes the validation, generate the JSON file using the utility.
vi. Log in to the e-filing portal: Visit the Income Tax e-filing portal (https://www.incometax.gov.in) log in to your account using your user ID (PAN) and password.
vii. Go to “e-File” and select “Income Tax Return”: On the e-filing portal, go to the “e-File” section and select “Income Tax Return.” Choose the assessment year and select ITR-2 as the form type.
viii. Upload the JSON file: Upload the generated JSON file of your filled-in ITR-2 form.
ix. Verify and submit: Review all the details once again to ensure accuracy. If everything is correct, proceed to submit the form electronically.
x. E-verify the return: After submitting the form, you have the option to e-verify your return using Aadhaar OTP, Net banking, or other available methods. Alternatively, you can also choose to physically verify the return by sending a signed copy of the ITR-V (Acknowledgement) to the Centralized Processing Center (CPC) within 30 days of filing.
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The author is an Income Tax and GST Practitioner and can be contacted at 9024915488.anks.
Author Bio
I am retired govt employee and received Rs 85 lac encluding PF, Gratuity , leave encashment, comuted pension. Which ITR form to bi filled.
I am trying out the Excel Utility for ITR2 for FY 2022-23. All sheets got validated, but when I hit “Calculate Tax” it gives me a message to enter amount for 80CCH. There is no provision to do this on any sheet and nor is 80CCH even mentioned in the excel utitility. I tried both new and old tax regime, same issue. Please help …
please contact us at 9024915488. thanks
go to schedule VI-A and correct the row 2.ua “any other deduction”. if there are no other deductions, delete data in this row.
Please correct the incometax website as
http://www.incometax.gov.in
to download ITR 2EXCEL UTILITY