How to file the ITR-2 form for FY 23-24; a step by step guide

ITR-2 caters to a broader range of taxpayers than the simpler ITR-1 (Sahaj) form. It's the go-to option for individuals and Hindu Undivided Families (HUFs) whose income profile exceeds what ITR-1 can handle.

ITR-2 is mandatory for individuals and HUFs with foreign income or assets and individuals serving as directors in a company. (Source: freepik)

Filing your Income Tax Return (ITR) in India can seem daunting, but the process can be streamlined with the right form. If your income profile extends beyond a simple salary and some interest income, then ITR-2 is the perfect fit for you. This form caters to a wider range of taxpayers than the basic ITR-1. Individuals with income from businesses, professions, capital gains, or rental properties from multiple houses will find that ITR-2 accommodates their diverse financial situations. Even those with foreign income or assets or who serve as company directors can utilise this form to file their ITR. Notably, the deadline for filing your income tax return for the financial year of 2023-24 is Wednesday, July 31.

ITR-2 eligibility

ITR-2 caters to a broader range of taxpayers than the simpler ITR-1 (Sahaj) form. It’s the go-to option for individuals and Hindu Undivided Families (HUFs) whose income profile exceeds what ITR-1 can handle. This includes situations where income comes from various sources like salary, multiple house properties, businesses or professions, capital gains, and other income not covered by ITR-1. Additionally, ITR-2 is mandatory for individuals and HUFs with foreign income or assets and individuals serving as directors in a company.

Also Read | How to file your Income Tax Return for FY 23-24, here’s a step by step guide

Documents required for ITR-2

Filing your ITR-2 online requires some preparation. First things first – a valid PAN card is a must. Linking it with your Aadhaar can streamline verification. Salaried individuals need Form 16 from their employer, detailing income and tax deducted at source (TDS). Similar forms (16A) from banks or other institutions should be collected to reflect TDS on interest or investments. If you are running a business or profession, then keep your Profit and Loss (P&L) Account and Balance Sheet close by for income and expense records.

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Selling assets like stocks, mutual funds, or property can lead to capital gains. Ensure you have the relevant statements for these. Hold proofs of investments made during the year to claim deductions under relevant sections. Finally, property owners should gather documents like property tax receipts and rental agreements.

Filling the ITR-2:

Head to the Income Tax e-filing portal: Visit [income tax department website ON incometax.gov.in] and log in (or register if you’re new).
Locate the ITR filing section: Find the “e-File” section on the dashboard and navigate to “File Income Tax Return.”
Choose the assessment year and filing status: Select the correct year and your filing status (Individual or HUF).
Pick ITR-2 form: From the available forms, choose “ITR-2.”
Specify filing type: Indicate if this is an original return (first time) or a revised return (corrections).
Go fully online: Choose “Prepare and Submit Online” to complete the entire ITR filing process electronically.

ITR-2 form:

While ITR-2 automatically populates some information based on Forms 16 and 16A, reviewing and editing some of the details carefully is crucial if necessary.
Personal Info: Ensure your PAN, name, address, and contact details are accurate.
Income Breakdown: This section captures income from various sources: salary, house property (rentals from each property), business/profession, capital gains, and others.
Deductions & Taxes Paid: Here, you can claim deductions allowed under various sections and see pre-paid taxes deducted at source.
Drilling Down with Schedules: ITR-2 uses detailed schedules for specific income sources. You’ll find separate schedules for business/professional income, capital gains, details for each owned property, and foreign income/assets (if applicable).
Tax Calculation: Based on your income, deductions, and tax rates, the portal automatically calculates your total tax liability.
Verification: Once everything looks good, choose your verification method: Aadhaar OTP, EVC from your bank, or physical verification by mail.

Post filing:

Once you successfully verify your ITR-2, it’s officially filed with the government! Don’t forget to download and keep a copy of the acknowledgement receipt. This receipt serves as proof that you’ve submitted your return and that you might need it in the future.