Who can file ITR-2?

Income Tax Return Form ITR-2: Who Can File It?

Filing income tax returns (ITRs) is an essential responsibility for individuals and entities in many countries, including India. In India, the Income Tax Department has established various forms to cater to different types of taxpayers and their income sources. One such form is ITR-2, which is specifically designed for individuals and Hindu Undivided Families (HUFs) with income from various sources. In this article, we will explore who can file ITR-2 and understand the key aspects associated with this form.

What is ITR-2?

ITR-2 is an income tax return form introduced by the Indian government for individuals and HUFs who do not have income from business or profession. It is applicable when the income sources include salary, pension, capital gains, rental income, or foreign assets/foreign income.

Eligibility Criteria for Filing ITR-2

The following categories of taxpayers are eligible to file their income tax return using ITR-2 :

  1. Individuals and HUFs with income from salary or pension.
  2. Individuals and HUFs with income from more than one house property.
  3. Individuals and HUFs with income from capital gains, such as the sale of property or investments.
  4. Individuals and HUFs with income from foreign assets or foreign income.
  5. Individuals and HUFs with agricultural income exceeding ₹5,000.
  6. Individuals and HUFs who are not eligible to file ITR-1 Sahaj.

Key Points to Consider While Filing ITR-2:

a) Reporting Salary and Pension: Provide details of salary and pension income received during the financial year. Include information about allowances, deductions, and exemptions if applicable.

b) House Property Income: Declare income from all house properties owned by you. Specify details of rental income and any deductions claimed against the property.

c) Capital Gains: Report any income generated from the sale of assets like property, shares, or mutual funds. Differentiate between short-term and long-term capital gains and claim any exemptions available.

d) Foreign Assets and Income: If you hold foreign assets or have earned income from foreign sources, disclose the necessary information as per the requirements.

e) Agricultural Income: In case you have agricultural income exceeding ₹5,000, provide accurate details while filing ITR-2.

f) Verification and Submission: Verify the details provided in the ITR-2 form, sign it, and submit it electronically.

Who Should Not File ITR-2?

While ITR-2 covers a wide range of income sources, certain taxpayers should not file their returns using this form. The individuals falling under the following categories should consider alternative forms

a) Individuals with income from business or profession should file ITR-3 or ITR-4, depending on the criteria.

b) Individuals eligible for ITR-1 Sahaj, which covers salaried individuals with income up to ₹50 lakh and limited income sources.

Conclusion

Filing income tax returns accurately and using the appropriate form is crucial to comply with tax regulations in India. Understanding the eligibility criteria and requirements associated with each form is essential to ensure a smooth and hassle-free tax filing process. If you have income from various sources, such as salary, capital gains, rental income, or foreign assets, ITR-2 is the designated form for you. By adhering to the guidelines and providing accurate information, you can fulfill your tax obligations efficiently. Remember to consult a tax professional or refer to the Income Tax Department’s official website for any clarifications or updates regarding the ITR-2 form.

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