ITR-2
1.WHAT IS ITR & WHAT ARE THE TYPES OF INCOME TAX RETURNS?
ITR stands for Income Tax Return, it is a form through which the amount of income earned, and taxes paid by the person during a particular year is communicated to the Income Tax Department.
Types of Income Tax Return
• ITR 1(also known as SAHAJ) for individuals.
• ITR 2 for individuals having capital income.
• ITR 3 for individuals having business income.
• ITR 4 for individuals declaring income under presumptive scheme.
• ITR 5 for llp & partnership firms.
• ITR-6 for companies.
• ITR-7 for ngo, trust, societies claiming benefits of 12a & 80g.
2.WHO ARE ELIGILBE TO FILE ITR 2?
Person having income from below mentioned sources can file ITR 2: –
• Income from Salary.
• Income from Capital Asset (Here income means profit/loss both).
• Income from more than one House Property.
• Agriculture income more than Rs. 5000.
• Person having directorship or unlisted equity shares in a company.
• Person whose TDS is deducted under section 194N of the Income Tax Act, 1961 (TDS on cash withdrawn).
• NRI also need to file ITR 2 as they are not eligible to file ITR-1.
• Income from sale of Virtual Digital Assets (VDA)
3.WHO ARE NOT ELIGIBLE TO FILE ITR 2?
ITR 2 cannot be filed by the following persons: –
• Company (whether Public or Private).
• Partnership Firms/ LLP.
• Ngo, Trust, Societies claiming benefits of 12a & 80g.
• Individual /Huf having income from Profit and Gains from Business/ Profession.
• Individual receiving commission or remuneration, by whatever name called, due to, or received by him/ her from a partnership firm /llp.
4.TYPES OF INCOME THAT CANNOT BE SHOWN IN ITR 2
Income that cannot be shown in ITR 2 are: –
• Income shown under presumptive income scheme of Income tax Act.
• Income from Business/ Profession.
• Income earned by Individuals/ Huf from Partnership firm / LLP in which he is a partner or designated partner.
5.DOCUMENTS REQUIRED TO FILE ITR-2
Following documents are required to file ITR 2: –
• Form 16 (If you have income from salary)
• From 16A (If you have earned interest on deposits and TDS is deducted)
• Saving certificate from bank.
• Form 26AS to match the corresponding TDS deducted with TDS appearing in 26AS.
• AIS/ TIS to match corresponding income with Form 16, From 16A.
• Bank Passbook.
• Tenant details if you have income from House property also details of local taxes paid, interest on borrowed capital (if any) for calculation of income from House Property
• In case of capital gain transactions, you will need a summary of profit/ loss statement of capital gain transactions during the year.
• In case of capital loss, one must file ITR before due date to carry forward such loss.
• Investment details (if any).
NOTE:
Since ITR’s are annexure less forms the above-mentioned documents are not to be attached with the ITR Form. However, one needs to keep these documents as it can be demanded by the tax authorities during assessment, inquires.
6.HOW TO FILE ITR 2?
By following the steps mentioned below one can file ITR-2
• Click on login and enter your pan & password to login to the income tax portal
• Click on e-file, then click on file income tax returns.
• Select the assessment year for which you want to file ITR and select the mode of filing (here we are telling about online filing procedure).
• Click on continue and select the ITR form i.e ITR-2 in our case.
• After selecting the ITR-2 for the next step is to select the schedules applicable to you for e.g. Schedule Capital Gains, Schedule House Property.
• After Selecting the schedules, the next step is to fill the basic details like directorship details, pre validated bank account etc.
• The next step is to fill the income schedules that one has selected based on the income one has: –
• In the Capital gain schedule, first select the type of Capital Asset sold: –
• After selecting the schedules fill the details accordingly into Long term or Short term Capital Gain.
• After filing the capital gain details the next step is to fill the details regarding Virtual Digit Asset sold during the year.
• After filing the VDA details the next step is to fill the details regarding income from other sources.
• The next step is to check the Schedule of current year losses and Schedule carry forward loss to correctly update your losses and also carry forward if applicable.
• The next step is to claim the deductions that you are entitled to claim under various sections like 80g, 80d, 80c etc.
• The next step is to verify the details of taxed paid by you including the TDS deducted and TCS collected from you.
• The next step is to click on total tax liability, wherein the system will automatically calculate your tax liability and if taxes paid is greater than the tax liability you will be entitled to get a refund and if the tax liability is more than the taxes paid then pay the remaining tax liability.
• After that click on preview return and verify the inputs provided by you
• Click on proceed to validation, if any error occurs clear the error and click on proceed to verification, the below error in the image will there as we need to bifurcate the capital gain into 4 quarters to calculate the interest under section 234 if any.
• The error can be resolved by clearly bifurcating the capital gain into 4 quarters.
• The last step is to verify the return prepared you can verify the return through following methods: –
I.Through Aadhar OTP.
II.Through digital signature (DSC)
III.Through Net banking
IV.Through pre validated bank account
V.Through pre validated demat account
VI.Through Net banking.
VII.By sending signed physical copy to the Income tax department, Bengaluru.
• After verification of the return, your return will be finally submitted to the Income Tax department for further verification.
