Expert Assistance

ITR 2 is an Income Tax Return form for Individuals and Hindu Undivided Families (HUFs) whose total income does not include income from "Profits and Gains of Business or Profession."

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Who Needs to File ITR 2 ?

You must file ITR 2 if you are an Individual or HUF and are not eligible for ITR 1 (Sahaj), and you do not have income from a business or profession.

This form is typically required if your income comes from one or more of the following sources:

• Salary/Pension.

• More than One House Property.

• Capital Gains (Short-term or Long-term) from the sale of shares, mutual funds, property, etc.

• Income from Other Sources (like winning from lotteries, horse races, etc.).

• Total Income Exceeds ₹50 Lakh.

• Foreign Income or Foreign Assets (including financial interest, signing authority, etc.).

• Holding Unlisted Equity Shares during the financial year.

• Being a Director in a company.

• Agricultural Income exceeding ₹5,000.

• Non-Resident or Resident Not Ordinarily Resident (RNOR) status.

Key Distinction: If you have any income under the head "Profits and Gains of Business or Profession," you must file ITR 3 (or ITR 4 under the Presumptive Taxation Scheme, subject to conditions). ITR 2 is strictly for those without business/professional income.

Why is ITR Filing Necessary?

Filing your Income Tax Return, including ITR 2, is a legal mandate and provides several important benefits:

1. Legal Compliance: It is mandatory under the Income Tax Act, 1961, if your gross total income exceeds the basic exemption limit (or if other conditions apply, like having foreign assets or being a company director).

2. Claiming Refunds: You can claim a refund for any excess tax paid (TDS, Advance Tax, etc.) during the financial year.

3. Carrying Forward Losses: Only by filing the ITR can you report capital losses (e.g., from shares or property) and carry them forward to set off against future income.

4. Visa and Loan Applications: A filed ITR copy (acknowledgment or intimation) is a crucial document for visa applications, bank loan approvals (home loan, car loan), and credit card applications, as it proves your financial stability and tax compliance.

5. Proof of Income: It serves as a comprehensive proof of your total income for the year.

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The ITR 2 Filing Process (e-Filing)

The filing process is generally done electronically (online or using the offline utility) via the official Income Tax e-Filing Portal.

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Step-by-Step E-Filing

1. Log in to the E-Filing Portal: Use your User ID (PAN) and Password on the official Income Tax Department website.

2. Select Filing Option: Navigate to 'e-File' $\rightarrow$ 'Income Tax Returns' $\rightarrow$ 'File Income Tax Return'.

3. Choose Details: Select the relevant Assessment Year (AY), Filing Mode (Online or Offline Utility), and Status (Individual or HUF).

4. Select ITR Form: Choose ITR 2. The system may recommend the correct form based on your profile.

5. Fill/Verify Schedules: Proceed to fill in all the required schedules, such as:

   • Part A - General: Personal Details, Residential Status, Bank Details.

   • Schedule S: Salary Income details (from Form 16).

   • Schedule HP: Income from House Property (Rental Income, Interest on Housing Loan).

   • Schedule CG: Detailed Capital Gains calculation.

   • Schedule OS: Income from Other Sources (Interest, Dividends, etc.).

   • Schedule VIA: Tax Deductions under Chapter VI-A (80C, 80D, etc.).

   • Schedule FSI & FA: Foreign Source Income and Foreign Assets (if applicable).

6. Compute Tax: The utility will automatically calculate your Total Income (Part B-TI) and Tax Liability (Part B-TTI). Ensure any tax due is paid (Self-Assessment Tax) before final submission.

7. Submission and E-Verify:

   • Submit the return.

   • E-Verify the return immediately (or within 30 days) using Aadhaar OTP, Net Banking, or EVC. This is mandatory to complete the filing process.

After successful verification, you will receive an Acknowledgement (ITR-V), and your return will be sent for processing at the Centralized Processing Centre (CPC).