ITR-2 is one of the income tax return forms in India designed for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. It is ideal for those earning from salary, pension, multiple house properties, capital gains, or foreign income. However, individuals with income from business or profession are not eligible to file ITR-2. To file ITR-2, essential documents like Form 16, Form 26AS, AIS, and proof of deductions are required. The ITR-2 form is structured into various sections, including personal details, income schedules, tax computation, and declarations. Filing ITR-2 online through the Income Tax Portal involves simple steps, such as logging in, filling out the form, and e-verifying it. Understanding these aspects can make the filing process seamless and error-free.
What is ITR-2?
ITR-2 is an income tax return form prescribed by the Income Tax Department of India, specifically designed for individuals and Hindu Undivided Families (HUFs) who do not earn income from business or professional activities. This form is suitable for those with income from sources such as salary, pension, multiple house properties, capital gains, or foreign assets and income. Additionally, it applies to those with agricultural income exceeding ₹5,000. The ITR-2 form is part of the government’s efforts to streamline tax filing by categorizing taxpayers based on their income sources, ensuring clarity and compliance.
Who is Eligible to File ITR-2?
The following individuals and HUFs are eligible to file ITR-2:
- Those earning income from salary or pension.
- Individuals with income from more than one house property.
- Taxpayers with capital gains from the sale of assets like stocks, mutual funds, or property.
- Individuals with foreign income or holding foreign assets, including foreign bank accounts or shares.
- Residents earning agricultural income exceeding ₹5,000.
- Taxpayers with income from interest, dividends, or winnings from lotteries.
- Directors in a company or those holding unlisted equity shares.
Who Cannot File ITR-2?
ITR-2 is not applicable for individuals or HUFs who:
- Earn income from a business or professional activity. Such taxpayers need to file ITR-3 or ITR-4 based on the nature of their income.
- Opt for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE.
- Are partnerships or companies, as these entities have different return forms tailored to their structure and income sources.
What are the Documents Needed to File ITR?
Filing ITR-2 requires a set of documents to ensure accurate reporting of income, deductions, and taxes paid. The key documents include:
- Form 16: Issued by the employer, this form provides details of salary income and tax deducted at source (TDS).
- Form 26AS: A consolidated annual tax statement reflecting TDS, advance tax payments, and refunds.
- Annual Information Statement (AIS): A comprehensive document summarizing your financial transactions for the year, including investments, dividends, and capital gains.
- Bank Statements: For verifying interest income and other credits.
- Capital Gains Statements: For taxpayers with income from the sale of shares, mutual funds, or property, transaction details are necessary to compute capital gains.
- Investment Proofs: Documents supporting claims under deductions such as Section 80C (ELSS, PPF, insurance premiums), 80D (health insurance), and others.
- Loan Statements: For housing loans, interest certificates issued by lenders are essential for claiming deductions under Sections 24 and 80EE.
- Foreign Income or Asset Details: For individuals with income or assets outside India, documentation of foreign bank accounts, investments, or property is mandatory.
What is the Structure of the ITR-2 Form?
The ITR-2 form is structured to cover all aspects of an individual’s or HUF’s income, deductions, and tax computation. It is divided into several parts and schedules, including:
Part A – General Information: Captures basic details like name, PAN, contact information, filing status, and residential status.
Part B – Gross Total Income: Summarizes income from all sources, such as salary, house property, capital gains, and other income like interest or dividends.
Part C – Total Taxable Income and Tax Payable: Calculates the total income after deductions and the tax liability based on applicable rates.
Schedules:
- Schedule S: Details of income from salary or pension.
- Schedule HP: Income from house property, including deductions like interest on loans.
- Schedule CG: Income from capital gains with segregation of short-term and long-term gains.
- Schedule OS: Income from other sources, such as interest, dividends, or winnings.
- Schedule VI-A: Deductions under Chapter VI-A (e.g., Sections 80C, 80D, 80G).
- Schedule FA: Details of foreign assets, including bank accounts and investments.
- Schedule 80G: Donations eligible for deductions.
- Schedule TDS: Tax deducted at source, as reflected in Form 16 and 26AS.
Verification and Declaration: A section for the taxpayer to verify the accuracy of the information provided.
How to File ITR-2 Online on the Income Tax Portal?
Filing ITR-2 online through the Income Tax Portal is a simple and efficient process. Follow these steps to complete your filing:
Login to the Portal:
- Visit the official Income Tax Portal
- Use your registered PAN and password to log in.
Select ITR-2:
- Go to the “e-File” menu and click on “Income Tax Return.”
- Select the assessment year and choose “ITR-2” as the applicable form.
- Opt for the online preparation and submission option.
Provide Basic Details:
- Fill in Part A with general information, such as your filing section and residential status.
Enter Income Details:
- Salary Income: Refer to Form 16 to provide details of salary and TDS.
- House Property: Add details of rental income, deductions for loan interest, and municipal taxes.
- Capital Gains: Input data related to the sale of shares, mutual funds, or property using capital gains statements.
- Other Income: Include interest income, dividends, and other sources.
- Under Schedule VI-A, declare deductions such as Section 80C (investments), 80D (health insurance), and others.
Verify Tax Liability:
- The system automatically calculates tax payable or refund based on the provided income and deductions.
- Check for advance tax, self-assessment tax, and TDS in Form 26AS or AIS for accuracy.
Validate and Submit:
- Click “Validate” to ensure all sections are filled correctly.
- Submit the form electronically by choosing either Aadhaar OTP, EVC, or a digital signature for e-verification.
E-Verify the Return:
- Complete the e-verification process immediately or within 30 days of submission. You can verify via:
- Aadhaar OTP.
- Net banking.
- Bank account or demat account.
- Complete the e-verification process immediately or within 30 days of submission. You can verify via:
Acknowledgment:
- Once the ITR is filed and verified, download the acknowledgment (ITR-V) for your records.
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