ITR 2 Filing for FY 2023-24 (AY 2024-25)
ITR 2 Filling
In India, taxpayers are categorized based on Income, and specific Income Tax Return (ITR) forms are assigned to individuals according to their income sources. Among these forms, ITR-2 is designated for individuals and Hindu Undivided Families who do not generate Income from professional or business activities. This article will delve into the details of ITR-2, applicability, differences from other forms, required documents, and the step-by-step process of filing it.
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In India, taxpayers are categorized based on Income, and specific Income Tax Return (ITR) forms are assigned to individuals according to their income sources. Among these forms, ITR-2 is designated for individuals and Hindu Undivided Families who do not generate Income from professional or business activities.
Who is eligible to file ITR 2 for AY 2024-25?
The ITR-2 form is designed for individuals and Hindu Undivided Families (HUFs) who earn Income from sources other than ‘Profits and Gains from Business or Profession.’ If your Income originates from any of the following sources, you are required to file ITR-2:
- Income from Salary/Pension
- Income derived from house property, which may involve multiple properties
- Income from Capital Gains or losses incurred from the sale of investments or property, encompassing both long-term and short-term gains/losses
- Income from Other Sources, which includes winnings from lotteries, bets on racehorses, and other legally recognized forms of gambling
- Payment exceeding Rs 5,000 from agricultural activities
- Foreign Income or ownership of Foreign Assets
- Status as a Resident Not Ordinarily Resident (RNOR) or a Non-Resident
The total income from the sources mentioned may surpass Rs 50 lakh. Additionally, if you serve as a Director in any company or have invested in unlisted equity shares, you must file your returns using ITR-2.
Who cannot file ITR-2 for AY 2024-25?
- Individuals or Hindu Undivided Families (HUFs) with Income from business or profession.
- Individuals who are eligible to fill out the ITR-1 form (Sahaj)
Structure of the ITR-2 Form
The ITR-2 Form is structured into two main parts, each with specific sections and schedules:
- Part A: This section includes general information, such as your Name, Address, Date of Birth (DOB), PAN, Aadhar card, Contact Number, and Email Address.
- Part B: This section deals with the computation of your total Income and the tax payable on your earnings.
In addition to Part A and Part B, the form also incorporates various schedules that detail different types of Income and deductions:
| Schedule | Description |
| Schedule S | Income from Salary |
| Schedule HP | Income from House Property |
| Schedule CG | Income from Capital Gains (both long and short-term) |
| Schedule OS | Income from Other Sources (e.g., gifts, interest) |
| Schedule CYLA | Information on losses incurred in the current year |
| Schedule BFLA | Income remaining after setting off losses from previous years |
| Schedule CFL | Carry forward losses to the next financial year |
| Schedule VIA | Tax-saving deductions under various sections (e.g., 80C, 80E) |
| Schedule 80G/80GG | Donations and conclusions for scientific research or rural development |
| Schedule AMT | Alternate Minimum Tax computation (area 115JC) |
| Schedule AMTC | Tax credit computation under section 115JD |
| Schedule SPI | Income arising from your spouse, minor child, or son’s wife |
| Schedule SI | Special tax rates for specific income sources |
| Schedule EI | Details of exempt Income |
| Schedule PTI | Income from business trust or investment fund |
| Schedule FSI | Income outside India |
| Schedule TR | Taxes paid outside India |
| Schedule FA | Foreign assets and Income from sources outside India |
| Schedule 5A | Portuguese Civil Code, allocation of Income to spouse |
Part B-TI – Computation of Total Income:
This section calculates your Gross Total Income from salary, house property, and other sources. Total tax-saving deductions are then subtracted from your Gross Total Income to determine your Total Income.
Part B-TTI – Computation of Tax Liability:
Based on the Total Income, tax liability will be calculated.
Once you have completed all the required information, there’s a verification section to ensure that the details you provided are factually correct and self-attested.
Key Updates in ITR-2 for AY 2023-24 and AY 2024-25
The ITR 2 form has undergone several important changes for FY 2022-23, which continue to apply for FY 2023-24:
- Schedule VDA: A new schedule for reporting income from the transfer of Virtual Digital Assets, such as cryptocurrencies.
- Relief u/s 89A: A new provision offers relief for residents earning from foreign retirement benefit accounts:
- Point No. 1(e)4: Addresses income taxable in the previous year where relief under section 89A was claimed in an earlier year.
- Section 10(12C): Introduces a new exemption for payments from the Agniveer Corpus Fund to individuals enrolled under the Agnipath Scheme or their nominees.
- Schedule SI: Adds a new item, 115BBH, to address income from the transfer of Virtual Digital Assets.
- Section 80 CCH: Includes a new deduction under Chapter VI-A for the entire amount Central Government employees contribute to the Agniveer Corpus Fund.
- ARN in Schedule 80G: Now requires additional information regarding the ARN (Donation Reference Number).
Documents required to file ITR 2
For ITR 2 Filing, you will need a comprehensive set of documents depending on the sources of your income and the deductions or exemptions you wish to claim. Here’s a detailed list of documents you might need:
- Form 16: Issued by your employer, it details your salary income and tax deducted at source (TDS).
- Form 16A: If you have earned interest on fixed deposits or savings accounts where TDS has been deducted, the deductors issue this form.
- Form 26AS helps verify the TDS deducted from your salary and other incomes. It can be downloaded from the e-filing portal.
- Rent Receipts: If you live in rented accommodation, you’ll need rent receipts to calculate House Rent Allowance (HRA) or claim deductions, especially if these receipts were not previously submitted to your employer.
- Capital Gains Statements: You’ll need a summary or profit/loss statement to compute capital gains for capital gains from shares or securities.
- Bank Documents: Your bank passbook or Fixed Deposit Receipts (FDRs) will help calculate interest income.
- Property Income Documents: If you receive rent from property, you’ll need documents like tenant details, local tax payments, or interest on borrowed capital to calculate income from house property.
- Loss Documents: If you incurred losses during the current financial year or wish to carry forward previous years’ losses, you need the relevant documents showing these losses. For previous years’ losses, a copy of ITR-V from that year is required.
- Tax Saving Investment Proofs: You need relevant receipts and documents for claims under sections 80C (investments like PF, PPF, life insurance premiums, etc.), 80D (medical insurance), 80G (donations), and 80GG (rent where no HRA is received).
Instructions for Completing the ITR 2 Filing for FY 2023-24
When filling out the ITR-2 Form, it is essential to adhere to the following instructions and guidelines:
- Fill out the form in the following sequence: Part A, all the schedules, Part B-TI, Part B-TTI, and finally, the verification section.
- Any schedules that do not apply to the Assessee should be struck out with ‘NA’ (Not Applicable) mentioned.
- The Assessee should use ‘NA’ against any item that does not apply to them.
- Round off all figures to the nearest one rupee, except for total income/loss and tax payable, which should be rounded off to the nearest multiple of ten.
- For individuals falling under the Employer Category, select ‘Government’ if they are a Central/State Government employee.
- If working in a public sector company of the Central/State Government, choose ‘PSU.’
- If the Assessee claims double taxation relief under section 90/90A/91, the ITR-2 Form cannot be used.
- ITR-2 is an annexure-less form, and no documents need to be attached during submission
Modes of Submission for ITR 2
There are two primary methods for filing ITR 2: offline and online.
Filing ITR-2 Offline
If you are 80 years of age or older, you have the option to file ITR-2 offline. In this case, you must submit a physical paper return or use a bar-coded form. Upon submission, the Income Tax Department will issue an acknowledgement.
Filing ITR-2 Online
For online filing of ITR 2, you can transmit all the necessary information electronically, either with or without a digital signature. After completing the online filing, you can verify the return through Return Form ITR-V. If you submit ITR 2 electronically with a digital signature, you will receive the acknowledgement on the registered email.”
Procedure for ITR 2 Return filing
Filing the ITR-2 form is a systematic process, and it can be completed online via the e-filing portal of the Income Tax Department of India. Here’s a step-by-step guide to help you file your ITR-2:
- Login with Your Credentials: Visit the official Income Tax India website and log in using the appropriate login credentials.
- Select the Correct Assessment Year: When filing ITR-2, choose the appropriate assessment year and the filing mode (Online/Offline). The assessment year is when you file the return following the financial year.
- Select the Assessee Status: Next, select your status as the assessee. ITR-2 primarily applies to individuals and HUFs. The system may prefill this information based on your registration status on the income tax portal.
- Choose the ITR-2 Form: Proceed to select the ITR-2 form from the dropdown menu. Once selected, the form will be enabled for filling. You must provide details such as the reason for filing, confirming personal information, validating your bank account, nature of employment, and more. Ensure all figures are entered correctly, and review for any errors or omissions.
- Provide Income Details: This section provides comprehensive information about your Income from various sources, including salary, capital gains, rental Income, and other sources. Fill in the required fields accurately, and ensure you have supporting documents. Complete the schedules provided in the form, if applicable.
- Deductions and Taxable Income: Specify eligible deductions under various sections of the Income Tax Act. These may include deductions for investments, insurance premiums, home loans, and other allowable expenses. Choose appropriate conclusions from the dropdown menu and calculate your taxable Income after applying them.
- Calculate Your Tax Liability: The form will automatically calculate your tax liability based on the income details provided, considering various deductions and exemptions available. Ensure the correct TDS/TCS/Advance Tax details are imported from Form 26AS.
- Validate, Verify, and Generate the JSON File: Validate the ITR-2 form using the validation criteria on the income tax website to ensure it is error-free and ready for submission. After validation, generate the JSON file for online filing.
- Verify the Return: You must verify your return after successfully filling out the JSON file. Verification methods include using an electronic verification code (EVC), Aadhar OTP, digital signature, or sending a signed physical copy to the Centralized Processing Centre (CPC) if electronic verification is not done.
- Acknowledgement and Verification: Upon successful verification, the income tax department will issue an acknowledgement receipt, which will be sent to your registered email address. Keep this acknowledgement for future reference.
ITR 2 Filing Charges
Key Differences Between ITR 1 and ITR 2
Selecting the correct form for filing income tax returns is crucial. Failure to do so can result in the rejection of your return by the Income Tax department, along with possible penalties for missing deadlines. Consequently, individual taxpayers often encounter confusion when deciding between ITR 1 and ITR 2
| Particulars | ITR 1 | ITR 2 |
| Applicant type | Individual (resident or non-resident) | Individuals (resident or non-resident) and HUFs |
| Income from salary/pension within a financial year | Up to Rs 50 lakh | More than Rs 50 lakh |
| Income from Other Sources | Excluding activities like horse racing, gambling, lotteries, etc. | Including activities like lotteries, gambling, horse racing, card games, etc. |
| Exempt Income | Up to Rs 5,000 | More than Rs 5,000 |
| Income from Property | Up to 1 house | More than one house |
Latest Update on the Pay Later Option for Income Tax Filing
The Income Tax e-filing portal has recently rolled out a ‘Pay Later’ option, allowing you to complete your tax filing process before making any tax payments. You can pay taxes after you are done filing. For additional information, please refer to our guide – Pay later option for the Income tax return filing.
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