ITR-2 Return Filing in India
ITR-2 in India is an Income Tax Return form used by individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. It is applicable for those earning income from salary/pension, capital gains, house property, foreign income or assets, and other sources like dividends or interest. Additionally, it is suitable for taxpayers with agricultural income exceeding ₹5,000. ITR-2 can be filed online through the Income Tax Department’s e-filing portal.
WHO CAN FILE ITR-2?
- Individuals and Hindu Undivided Families (HUFs) without income from business or profession.
- Taxpayers with income from:
- Salaries/Pensions
- Capital Gains (short-term or long-term)
- Income from House Property (multiple properties included)
- Income from Other Sources (interest, dividends, etc.)
- Taxpayers with foreign income or foreign assets.
- Non-Resident Indians (NRIs) earning income from Indian sources.
- Individuals earning more than ₹50 lakh who need to report assets and liabilities
WHO CANNOT FILE ITR-2?
- Individuals with income from business or profession (use ITR-3 or ITR-4).
- Taxpayers eligible to file ITR-1 (Sahaj) with simpler income structures.
- Individuals claiming presumptive income schemes under sections like 44AD, 44ADA, or 44AE.
- Entities other than individuals and Hindu Undivided Families (e.g., companies, partnerships).
- Taxpayers requiring audit for business or professional income.
ITR-2 is designed for individuals and Hindu Undivided Families (HUFs) who have income from sources other than business or profession. It provides several benefits for taxpayers, especially those with capital gains, foreign income, or agricultural income.
- Multiple Income Sources
- Ideal for individuals with income from salary, capital gains, property rentals, and other sources (e.g., interest, dividends).
- Capital Gains Reporting
- Allows you to report short-term and long-term capital gains from the sale of stocks, mutual funds, property, or other investments.
- Foreign Income and Assets
- Enables the reporting of foreign income (e.g., salary or business income from abroad) and foreign assets like bank accounts, property, or shares.
- Agricultural Income Above ₹5,000
- If you earn agricultural income greater than ₹5,000, ITR-2 allows you to report it, unlike ITR-1 which limits agricultural income reporting.
- Exemption and Deductions
- You can claim exemptions like HRA (House Rent Allowance), capital gains exemptions (Section 54, etc.), and deductions under Section 80C, 80D, 80G, etc.
- Income from Other Sources
- If you have income from interest, dividends, or any other sources, ITR-2 allows you to report and claim relevant deductions.
- Detailed Tax Calculation
- With ITR-2, you can claim deductions, exemptions, and set off carry-forward losses from previous years, which ensures an accurate tax calculation.
- Saves Time with Pre-filled Data
- The Income Tax Portal pre-fills many fields like your TDS details, which reduces errors and speeds up the process.
- Simple for Non-Business Taxpayers
- If you have no business income, ITR-2 simplifies the process of filing for individuals with complex sources of income (capital gains, foreign income, etc.).
- ITR-2 is Required for Certain Cases
- If you are a resident but not ordinarily resident (RNOR) or a non-resident Indian (NRI), and you have income from multiple sources, you must use ITR-2.
Personal Details:
- PAN and Aadhaar card.
- Bank account details for refund.
Income Documents:
- Form 16 (salary/pension).
- Form 26AS (consolidated tax statement).
- Salary slips (if available).
Capital Gains:
Sale and Purchase Receipts for Property/Asset Transactions:
- Sale Deeds: Reflect sale price, date, and terms.
- Purchase Agreement/Deeds: Show purchase cost and acquisition date.
- Stamp Duty Receipts: Proof of taxes paid during property purchase.
- Brokerage Charges: If using an agent, include payment receipts.
- Improvement Costs: Receipts for capital improvements that can lower capital gains.
Capital Gains Calculation for Mutual Funds & Shares:
- Capital Gains Report: Statements from brokers or mutual funds showing purchases and sales.
- Taxation Statement: Pre-calculated long-term and short-term capital gains.
- Purchase Details: Information on investments, including purchase amounts, dates, and units bought.
Demat Account Statements:
- Transaction Statements: Reflect shares bought and sold with transaction dates and prices.
- Holding Statements: Show current shareholding and any changes.
- Dividend Vouchers: Proof of dividend received for tax purposes.
- Corporate Actions: Documents for bonus shares, stock splits, etc.
Other Key Documents:
- Indexed Cost of Acquisition: Adjusted purchase cost for long-term assets.
- TDS on Property Sale: TDS certificates (Form 26QB) for property transactions.
- Reinvestment Details: Proof of reinvestment to claim exemptions under sections 54 and 54EC.
House Property:
- Proof of rental income (if any).
- Loan repayment statements (for home loans).
Investment and Deductions:
- Proof for deductions under sections like 80C, 80D, etc. (e.g., PPF, life insurance).
Foreign Income/Assets (if applicable):
- Documents detailing foreign income and assets.
Agricultural Income:
- Proof of agricultural income exceeding ₹5,000 (if applicable)
Filing your income tax returns (ITR) is an essential part of tax compliance in India. If you are an individual or a Hindu Undivided Family (HUF) with income from multiple sources, including salary, property, capital gains, or foreign assets, ITR-2 is the right form for you.
Follow our easy guide to file ITR-2 and ensure a smooth tax filing experience.
What You’ll Need:
Before you begin, gather the following documents:
- PAN Card: Mandatory for filing.
- Aadhaar Number: Linked to your PAN.
- Form 16: Issued by your employer, detailing salary and tax deducted.
- Form 26AS: Shows taxes deducted and credited against your PAN.
- Bank Statements: To verify interest income or other sources.
- Capital Gains Details: If you’ve sold assets like property or investments.
- Other Income Documents: For income from other sources.
Step 1: Log in to the Income Tax Portal
- Visit the Income Tax e-Filing Portal.
- Log in using your PAN and password.
- If you’re a new user, click on “Register” to create an account with your PAN, Aadhaar, and other details.
Step 2: Choose the Correct ITR Form
- After logging in, navigate to the “e-File” section.
- Click on “File Income Tax Return” and select the Assessment Year.
- Choose ITR-2, which is for individuals and HUFs with income from:
- Salary/Pension
- Capital Gains
- House Property
- Other sources (like interest, dividends)
- Foreign income/assets
Step 3: Fill in Your Details
The ITR-2 form has several sections:
- Personal Information: Enter your name, PAN, address, and contact details.
- Income Details:
- Salary: Provide details as per your Form 16.
- House Property: Report rental or other income from property.
- Capital Gains: Include details from sale of property or investments.
- Other Income: Interest, dividend, etc.
- Deductions: Fill in details for deductions under sections like 80C (life insurance, PPF) and 80D (health insurance).
- Tax Computation: The system will calculate your taxable income and tax liability automatically.
Step 4: Verify Your Information
Carefully check all the details entered. Cross-check your Form 16 and Form 26AS to ensure accuracy. Any discrepancies can lead to penalties or delays.
Step 5: Calculate and Pay Taxes
- Calculate Tax: Based on your income and deductions, the form will calculate the tax payable.
- Pay Tax: If your TDS isn’t sufficient to cover your tax liability, pay the remaining tax online through the portal.
Step 6: Submit Your Return
Once you're satisfied with the information:
- Click the “Submit” button.
- After submission, you’ll be asked to e-verify or send the ITR-V (acknowledgment) via post.
Step 7: E-Verification (Recommended)
You can e-verify your return using one of the following methods:
- Aadhaar OTP: If linked with PAN, an OTP will be sent to your registered mobile number.
- Net Banking: Use your bank’s net banking platform to e-verify.
- EVC (Electronic Verification Code): Use bank or Demat account details for verification.
If e-verification isn’t done, you must send the signed ITR-V to the CPC in Bengaluru within 120 days.
Step 8: Acknowledgment
Once your ITR is successfully filed and verified, you’ll receive an ITR-V acknowledgment. Keep this for your records.
Tips for a Smooth Filing Process:
- File on time: Avoid penalties by filing before the due date.
- Check Form 26AS: Ensure your TDS is correctly reflected.
- Claim All Deductions: Maximize your deductions to reduce tax liability.
- Go Digital: E-filing and e-verification are faster and preferred.
By following these steps, you can easily file your ITR-2 and comply with Indian tax laws. If you need assistance, consult a tax professional to ensure everything is in order.
Due Dates for FY 2024-25 (AY 2025-26):
- Original Due Date: July 31, 2025 (for most individuals).
- Extended Deadline: January 15, 2026.
- Updated Returns: Can be filed until March 31, 2028, with penalties.
Penalties for Late Filing:
- Late Filing Fees (Section 234F):
- ₹1,000 for income below ₹5 lakhs.
- ₹5,000 for income above ₹5 lakhs (if filed after the due date but before December 31).
Interest (Section 234A):
- 1% per month or part thereof on unpaid tax from the due date.
Additional Tax for Updated Returns (Section 139(8A)):
- 25% of unpaid tax if filed within 12 months.
- 50% if filed within 24 months after the assessment year.
Other Consequences:
- Losses cannot be carried forward.
Refund claims may be delayed.
Understanding income tax slabs is key to effectively managing your tax obligations in India. These slabs are structured to align with the principle of progressive taxation, where higher income leads to higher tax rates. This ensures an equitable distribution of the tax burden across the population.
Categories of Income Taxpayers in India
India’s tax system divides taxpayers into three primary categories based on age:
- Individuals Under 60 Years: Regular working individuals and professionals.
- Senior Citizens (60–80 Years): Enjoy higher exemption limits due to lower earning
potential in retirement. - Super Senior Citizens (Above 80 Years): Further increased exemptions to reduce tax
burdens on the elderly.
Direct Tax System in India
The government introduced the new tax regime alongside the old one to provide taxpayers flexibility:
- Old Regime: Offers various deductions and exemptions.
- New Regime: Simplified but with fewer exemptions.
Old Regime:
Slabs (Rs.) |
Individuals (Age < 60 years) |
Resident Senior Citizens(60 to 80 years) |
Resident Super Senior Citizens(80 years and above) |
|---|---|---|---|
New Regime:
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Frequently Asked Questions in India
Who can file ITR-2?
Individuals/HUFs with no income from business or profession.
Is ITR-2 applicable for capital gains?
Yes, it is mandatory for income from capital gains (short-term or long-term).
Can NRIs file ITR-2?
Yes, NRIs can file ITR-2 if income criteria are met.
Can I file ITR-2 with agricultural income?
Yes, if agricultural income exceeds ₹5,000.
Can directors in companies file ITR-2?
Yes, ITR-2 can be used by individuals who are company directors.
Is foreign income allowed in ITR-2?
Yes, foreign income and assets must be reported.
Can income from more than one house property be reported in ITR-2?
Yes, income from multiple properties can be declared.
Is dividend income taxable under ITR-2?
Yes, report dividend income in ITR-2.
Who cannot file ITR-2?
Individuals with income from business or profession (file ITR-3 instead).
Is ITR-2 applicable for lottery or gambling winnings?
Yes, such income falls under “Income from Other Sources.”
What is the due date for ITR-2?
Typically July 31 (non-audit cases).
Can I report income from unlisted equity shares in ITR-2?
Yes, unlisted equity shares need to be disclosed.
Is ITR-2 applicable for salaried individuals?
Yes, if additional income such as capital gains exists.
Can I claim deductions under Section 80C in ITR-2?
Yes, applicable deductions can be claimed.
Is Aadhaar mandatory for filing ITR-2?
Yes, linking PAN with Aadhaar is required.
Can I file ITR-2 for exempt income?
Yes, exempt income like EPF interest and dividend income above ₹10 lakh should be disclosed.
What if income exceeds ₹50 lakh?
You must file ITR-2 if criteria are met (income limit isn’t a restriction here).
Can self-employed individuals file ITR-2?
No, self-employed persons must file ITR-3 if they have business income.
Can ITR-2 be filed online?
Yes, through the e-filing portal of the Income Tax Department.
What documents are required for filing ITR-2?
Form 16, Form 26AS, investment proofs, and details of income sources.
