ITR-2 (For Individuals and HUF)
What is ITR 2 Form?
This return is applicable for Individual and Hindu Undivided Family (HUF) not having Income under the head Profits and Gains of Business or Profession and who is not eligible for filing ITR-1.
What is ITR?
An Income Tax Return (ITR) is a document used by taxpayers to report details about their income earned and the corresponding tax liability to the income tax department. It serves as a formal declaration of an individual or entity’s financial information, ensuring transparency and compliance with tax regulations.
Limit for Senior Citizens is INR 3 lakhs and for Super Senior Citizens INR 5 lakhs.
Who can use ITR 2 Form?
An individual who;
- has income from salary/ pension
- has income from more than one house property
- is a non-resident in India during the previous year
- is a director in a company
- has held any unlisted equity shares at any time during the previous year
- has any asset (including financial interest in any entity) located outside India
- has signing authority in any account located outside India
- has income from any source outside India
- is a person in whose case tax has been deducted u/s 194N
- is a person in whose case payment or deduction of tax has been deferred on ESOP
- who has any brought forward loss or loss to be carried forward under any head of income
Late Fee and Penalty for late Filing of ITR-2
Late filing of income tax returns can result in various penalties, depending on your total income.
- Late fee of Rs. 5000 will be levied on Individuals with a total income exceeding Rs. 5 lakhs, while those with income below this threshold will incur a reduced late fee of Rs. 1,000. However, Individuals having total income up to Rs. 2.5 lakhs are not required to pay any late fee for late filing of the return. For Senior Citizens, this limit is Rs. 3 lakhs and for Super Senior Citizens Rs. 5 lakhs.
- Additionally, if you owe taxes and fail to file the return by the due date, you will be liable for additional interest at a rate of 1% per month until you submit the return.
- In more severe cases, penalties can be imposed for underreporting or misreporting of income. Underreporting may lead to penalties of up to 50% of the tax underreported, while misreporting can result in penalties of up to 200% of the misreported tax amount.
- Furthermore, repeated failure to file tax returns despite reminders from tax authorities may lead to prosecution procedures. This could result in imprisonment ranging from three months to seven years, depending on the outstanding tax liabilities.
It is crucial to file your tax returns promptly and accurately to avoid these legal and financial consequences.
How we can assist you?
We provide valuable assistance in filing your ITR-2 return. We start by helping you select the appropriate form based on your income sources, ensuring accuracy in filing.
We meticulously calculate your tax liability, perform error checks, and prioritize timely filing to reduce the risk of penalties or tax notices. If eligible, we assist in processing your income tax refund efficiently.
Our team of tax experts is available to address your queries and provide guidance throughout the process. We also keep you updated on tax law changes and deadlines, ensuring your compliance with the latest regulations. With our secure platform, you can trust us to safeguard your financial data while simplifying your ITR-2 filing experience.
FAQs
What is ITR-2 Form?
ITR-2 is an Income Tax Return form in India used by individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession.
Who should file ITR-2?
Individuals and HUFs with income from sources other than business or profession, such as capital gains, foreign income, or more than one house property.
What documents are needed to file ITR-2?
Documents like PAN card, Aadhaar card, Form 16, salary slips, bank statements, and investment details are required. Additionally, documents related to capital gains, foreign income, and deductions should be available.
What is the due date for filing ITR-2?
The due date for filing ITR-2 typically falls on July 31st of the assessment year. However, it's advisable to check for any updates or extensions.
How to calculate capital gains for ITR-2?
Capital gains are calculated by subtracting the cost of acquisition from the selling price. Depending on the holding period, gains may be categorized as short-term or long-term.
What is the difference between ITR-1 and ITR-2?
ITR-1 is for individuals with income up to ₹50 lakhs, who have income from salary, one house property, and other sources. ITR-2 is for individuals with income from multiple sources and those with capital gains or foreign income.
What is the penalty for late filing of ITR-2?
Late filing may attract a penalty under Section 234F. The penalty amount varies depending on the delay.
Can a salaried person file ITR-2?
Generally, salaried individuals with income from other sources like capital gains or multiple house properties need to file ITR-2.
What is the Sahaj (ITR-1) form, and can I use it instead of ITR-2?
The Sahaj form (ITR-1) is for individuals with income up to ₹50 lakhs and simple income sources. If you have income from capital gains, foreign assets, or more than one house property, you should use ITR-2.
Can I carry forward losses in ITR-2?
Yes, certain losses like capital losses can be carried forward to future years, and details of such losses should be provided in ITR-2.
How is income from multiple sources taxed in ITR-2?
Income from different sources is aggregated under their respective heads in ITR-2. The total income is then computed after applying deductions under various sections.
Can I claim a deduction for interest paid on a loan taken for the renovation of a house in ITR-2?
Yes, you can claim a deduction for interest on a loan taken for the renovation of a house under Section 24(b) of the Income Tax Act. Report the details of the interest paid in the relevant section of ITR-2.
How is income from partnership firms or LLPs treated in ITR-2?
Income from partnership firms or LLPs is reported in ITR-3, not ITR-2. Partners should file ITR-3 if they have income from such entities, providing details of their share of profits, capital, and other relevant information.
What is Form 26AS, and why is it important for ITR-2 filing?
Form 26AS is an annual statement summarizing taxes deducted on behalf of a taxpayer and taxes paid by the taxpayer. It is vital for ITR-2 filing as it provides a consolidated view of TDS, helps verify TDS details, avoids discrepancies, ensures accurate reporting, facilitates refund processing, and aids in tax assessment and compliance.
