ITR 2: How to File Online? ITR Filing for F.Y. 2023-24 (A.Y. 2024-25)
Updated: Sep 28
If you are deriving income from capital gains, foreign assets, more than one property, or any other source other than by way of salary, then ITR 2 is what you need to file your ITR. In this article, we will help you decode ITR 2, the online process of filing ITR 2, breaking each step so you can finish your tax filing efficiently and effectively.
Table of Content
What is ITR 2?
ITR 2 is used by the people and Hindu undivided families (HUFs) to file their income tax returns. These people do not earn their income from the business or profession. It is usually used by those who receive income from salary, pension, capital gains, and so on.
Eligibility Criteria for Filing ITR 2 for F.Y. 2023-24
ITR 2 is for individuals and Hindu Undivided Families (HUFs) who do not have income from the profits and gains of any business or profession. This ITR 2 form is suitable for people with more complex income structures compared with those who are allowed to file an ITR-1. Here is a detailed breakdown of who needs to file ITR 2:
Individuals and HUFs not carrying on business or profession under any proprietorship.
Those who have income from more than one house property.
Individuals who have income from capital gains, both short-term and long-term.
Residents having income from any source outside of India or holding any asset outside of India.
Residents who have to carry forward and set off their losses under the head 'Capital gains'.
Individuals having a total income of more than INR 50 lakhs.
Residents having foreign assets or financial interest in an entity which is located in a country outside India.
Residents who are signing authorities in any account which is located outside India.
The person claiming relief of tax under sections 90, 90A or 91.
The person having agricultural income which is more than INR 5,000.
Person having income from speculative business and other special incomes.
Residents having income from the lottery, racehorses, legal gambling, and so on.
Who cannot file ITR-2 for AY 2024-25?
Any individual who has income from business and profession
Individuals who are eligible to fill out the form ITR1
Difference between ITR-1 and ITR 2
Documents Required for Filing ITR 2 for F.Y. 2023-24
Keeping all necessary documents ready before filing ITR 2 is very important for the accurate and efficient filing of tax. So, here is a comprehensive list of documents that you must gather before entering the process:
Form 16: Form 16 has to be provided by the employer. It holds information on the payment made towards salary and TDS deducted from your salary during the financial year.
Form 26AS: Form 26AS is a consolidated tax statement, which will be available on the website of the Income Tax Department. It has details of all taxes deposited against your PAN, hence it contains TDS, TCS, and advance tax, if any, paid by you.
Bank Statements: Bank statements will be required for the financial year to report interest income and to check other incomes and expenses accounted for in your return.
Proof of Investments: All documents with regard to your investments like PPF, NSC, life insurance, ELSS, and other tax-saving instruments that are relevant for claiming deductions under sections 80C, 80D, and so on.
Statements of Capital Gains: If you sold any type of investments like stocks, mutual funds, or property, capital gains statements/sale deeds are required to calculate capital gains or losses.
Documents Related to Foreign Income: In case your income is based from foreign source, then details of the same would be required, like foreign investments, property, or any employment held abroad. Also include details of any taxes paid on this income in foreign countries.
Rental Income Documents: In case the taxpayer has more than one property and rent is received against it, he has to maintain the rental agreement along with details of the tenants. The taxpayer also needs to maintain bank statements of such transactions.
Home Loan Statement from Bank: In case you have a home loan, this statement will aid in claiming deductions on interest paid on the home loan under Section 24.
Aadhaar Card: It is mandatory to link this with your PAN for tax-filing purposes.
Proof of Other Income: This refers to documents with regard to other sources of income, for instance, dividend income, interest on savings accounts, FDs, and income from lottery or gambling, if any.
Deduction under Section 80E: If you claim a deduction for interest on an education loan, then related bank statements or the lender's certificate specifying the amount of interest payable must be available.
Donations to charitable institutions: Any receipts of donations if applicable to claim deductions.
Proof of Disabilities: Medical certificates, if claiming deductions under sections relating to various disabilities.
Details of Specified Financial Transactions (SFT): Details of high-value transactions if any have been related to the purchase of high-value assets duly kept on record.
What is the Structure of ITR 2? Content and Format of ITR 2
Below is a detailed overview of the content and format for ITR 2, outlining its structure to help you understand how to fill out the form effectively.
Part A: General Information
Personal Information: The name of the taxpayer will be mentioned along with his/her PAN and Aadhaar number, by date of birth, with contact details.
Filing Status: Particulars about the section under which the return is filed; whether it is before the due date, revised, or in response to a notice from the Income Tax Department.
Part B: Gross Total Income
B1. Salary/Pension: Information regarding income in the form of salary or pension, which shall include allowances, the value of perquisites, and deductions.
B2. House Property: Income from house properties, showing rent received, taxes paid, and interest on borrowed capital.
B3. Capital Gains: Details of short-term and long-term capital gains through the sale of any asset or investment
B4. Any Other Source: Interest, dividends, winnings from lotteries, and so on, under miscellaneous interest.
Part C: Deductions and Taxable Total Income
The details of deductions availed under various sections like 80C (for investments), 80D (for medical insurance), 80G (for donations), and so on, and computation of total income after deductions.
Part D: Computation of Tax Payable
Calculation of tax liability on the basis of the existing tax slabs, including rebate and relief under section 89 and calculation of net tax liability.
Part E: Other Information
Details of exempt income like agricultural income, details of all the bank accounts held in the financial year, information on assets and liabilities if total income exceeds INR 50 lakhs.
Schedule HP: Details of income from House Property
Information about property ownership, nature of property—self-occupied or let out—and computations of income.
Schedule CG: Capital Gains Details
Information regarding capital gains- or loss-producing transactions.
Schedule OS: Income from Other Sources Details
Interest, dividend, and so on, in detail.
Schedule CYLA: Statement of Income after setting off of current year's losses.
Schedule BFLA: Statement of Income after set off of unabsorbed loss brought forward from previous years.
Schedule CFL: Statement of losses to be carried forward to future years.
Schedule VIA: Deductions under Chapter VIA.
Detailed entries for deductions claimed under Sections 80C, 80CCC, 80CCD, and so on.
Schedule SPI: Income of specified persons (spouse, minor child, and so on) includable in the income of the assessee.
Schedule SI: Income chargeable to tax at special rates.
Schedule EI: Particulars of Exempt Income.
Information of income not forming part of total income like agricultural income, Dividends and so on.
Schedule FSI: Particulars of Income from outside India and tax relief.
Schedule TR: Summary of Tax relief claimed for taxes paid outside India
Schedule FA: Details of Foreign Assets and income from any source outside India.
Schedule 5A: Information, if assessee is opting for the Portuguese Civil Code. This is to be applied to Goa and Union territories.
Schedule AL: Asset and liability at the year-end: This shall be applicable in a case where total income exceeds more than INR 50 lakhs.
Schedule IT: Advance tax and self-assessment tax payments' information.
Schedule TDS: Details of TDS/TCS.
Step-by-Step Process for Filing ITR 2 Online for F.Y. 2023-24
The online filing of ITR 2 is a well-structured process, and it can easily be managed with a little systematic approach. Following is the step-by-step process for filing ITR 2 for F.Y. 2023-24 (A.Y. 2024-25):
Step 1: Prepare and Collect all Necessary Documents
Have readiness of all necessary documents before entering into the process of filing. These would include:
Form 16 from employer(s)
Form 26AS for verification of tax deducted at source (TDS)
Bank statements to know interest income details
Details of capital gains by sale of assets
Details of foreign-sourced income, if any
Details of deductions under sections such as 80C, 80D, and so on
Information about investments and loans
Step 2: Registration or Login to e-Filing Portal
Open the Income Tax e-Filing portal at https://www.incometax.gov.in/iec/foportal/
In case you are a new user, sign up by providing your PAN, which will be your User ID.
If you have already registered yourself, enter your User ID, password, and captcha code to log in.
Step 3: Download ITR Utility or Prepare Online
In case you want to fill ITR 2 form offline, click on 'Downloads' to use the utility software provided by the Income Tax Department.
Otherwise, in the case of online filing directly through the portal, use 'e-File' and then 'Income Tax Returns' followed by 'File Income Tax Return'.
Step 4: Selection of Assessment Year
Select the relevant Assessment Year (A.Y. 2024-25) for which you are filing the return.
Step 5: Mode of Filing
Select the mode by which you would like to file your return. Select 'Online' if you want to file directly through the web interface.
Step 6: Filling ITR 2 Form
Follow all instructions and fill in the details in every section of ITR 2 form.
General Information: Fill all your personal information carefully.
Details of Income: Mention income from all sources, salaries, house property, capital gains, and foreign income.
Deductions: The claim of deductions under various sections to reduce your liability for tax payment.
Tax Details: Check the taxes paid section; make sure all TDS, TCS, and advance tax details are correct.
Step 7: Pay Tax, if Payable
If the tax is payable after considering TDS and advance tax, use the income tax challan link on the portal for Online tax payment and enter Challan details in the tax return.
Step 8: Preview and Submit Your ITR
View all the data entered and check whether it is accurate.
Submit the ITR. After submission, you will be redirected to Verify Your Return.
Step 9: Verify the ITR
ITR filing without verification cannot be considered complete. Now, verification can be done through a number of options such as through Aadhaar OTP, EVC using your bank account, or by sending a signed physical copy of ITR-V to CPC, Bengaluru.
Step 10: Download Acknowledgement and Keep Records
Download the acknowledgement after verification, earlier called ITR-V.
Keep a copy of filed ITR and acknowledgement for record purpose.
Step 11: Track the Processing of your ITR
You can log on to the e-filing portal and check the status regarding processing for ITR submission to ensure that it has been accepted and processed without discrepancies.
Common Mistakes to Avoid
While filing ITR 2 form, accuracy and completeness are to be reckoned. Here are the most common mistakes which one should avoid while filing ITR 2:
Mistakes in Personal Information
Mistake: Outdated or wrong personal details, like address, bank account numbers, or misspelling your name.
Impact: Problems can arise during the processing of ITR or refunds will get delayed.
Prevention: Double check all the personal information before submitting the form.
Not Reporting All Sources of Income
Mistake: Failure to declare other sources of income, such as interest on a savings account, rent received, or dividends.
Impact: Underreporting may attract penalties against the taxpayer.
Prevention: At the time of filing tax returns, all sources of income should be declared, however small it may seem to the taxpayer.
Ignoring Income from Previous Employment
Mistake: Not including income with a previous employer in the same financial year.
Impact: Understatement of income may attract penalties.
Prevention: Obtain Form 16 from all employers for that financial year.
Incorrect Deductions
Mistake: Wrong claiming of deductions or not availing all eligible deductions like those under Sec 80C and 80D, etc.
Impact: Higher tax liability or loss of an opportunity to save on taxes
Prevention: Check on all eligible deductions and ensure proper supporting documents to back up your claims.
Mistakes in calculation of capital gains
Mistake: Incorrect calculation of capital gains from sale of shares or property.
Impact: Overpayment or underpayment with financial differences may result.
Prevention: Use actual data related to purchase and sale prices and correct rates against short-term and long-term capital gains.
Failure to Use Brought-Forward Losses
Mistake:Forgetting the losses which could be brought forward for previous years.
Impact: The relief of decreasing taxable income is sacrificed.
Prevention: Record any losses of the past that can be carried forward and ensure they are applied.
Mismatch with Form 26AS
Mistake: C with what forms exist in Form 26AS.
Impact: It may lead to notices from the Income-tax Department.
Prevention: Check the Form 26AS regularly and ensure that entries therein have been matched with related data from your return.
Not Disclosing Foreign Assets
Mistake: Failure to disclose foreign assets or foreign-sourced income, if any
Impact: Violation of tax laws, which may attract heavy penalties
Prevention: Ensure to declare foreign source income and income from foreign assets in accordance with the provisions of the Black Money Act and other laws as applicable.
Not Verifying the Return
Mistake: Filing of the ITR but failing to verify it through a digital signature, Aadhaar OTP, or EVC.
Impact: The return will lie unprocessed until verified, which may delay refunds or processing.
Prevention: Verify the return immediately after filing.
Delay in Filing
Mistake: Filing of return after the due date.
Impact: Late filing may attract penalties and interest on due taxes.
Prevention: One should plan and be prepared to file ITR well before the deadline in view of avoiding last-minute problems.
Benefits of Filing ITR-2
Following are the benefits of filing ITR-2:
Legal Compliance
Description: Timely filing of ITR-2 ensures compliance, as it is applicable for people having more than one house property income, capital gain income, foreign-sourced income or assets, and income from other sources that cannot be filed under the simple ITR-1 form.
Impact: One avoids legal penalties and complications associated with non-compliance.
Claim Refunds
Description: If there has been excess tax deducted from salary, or if advance tax paid is more than your actual tax liability, the only way to claim a refund is by filing the ITR.
Impact: This will ensure that you get your refund of the excess amount that has been paid as tax.
Creditworthiness for Loans
Description: ITR receipts are an essential document in loan applications, especially for huge loans such as home loans or personal loans.
Impact: Proof of income, which enables a lender to assess your repayment capacity for the loan and hence improves the credit eligibility.
Carry Forward of Losses
Description: Losses, especially capital losses can be carried forward and set-off against future gains only if the ITR is filed within the due date.
Impact: This helps reduce your tax liability over the years, which may be of financial benefit if you are trying to manage your investments.
Visa Applications
Description: In order to travel abroad, most countries require that as a part of your visa application, you show them your tax returns for the last couple of years.
Impact: This shows your financial health and links you to your home country, thus making the approval of a visa quite easy.
Avoidance of Penalties
Description: Timely filing of ITR-2 avoids penalties levied for not filing or delay in filing.
Impact: Outflow of money is saved towards fine and interest on outstanding tax liabilities.
Government Tender Applications
Description: ITR receipts are often required at the time of applying for government tenders, to obtain professional licenses, or other such official purposes.
Impact: It enhances your eligibility and credibility to undertake any commercial activity that requires proof of stability in financial matters.
Record of Financial History
Description: Submitting ITRs regularly creates a financial history record. Business and professional appraisals are not the only uses; there are many more.
Impact: It establishes on record evidence of your financial history, useful in many such situations in both personal and professional life.
Peace of Mind
Description: Compliance with the tax law may put your mind at rest and clear off any future anxieties related to taxes.
Impact: Plan your finances better without worrying about any future legal tangles.
Major updates in ITR-2 in AY 2023-24 and AY 2024-25
The following changes have been incorporated into the ITR-2 form for the Financial Year 2022-23 and will also apply to the Financial Year 2023-24:
Section 10C 12 has introduced a new exemption for the payments from the agniveer corpus fund. It applies to the people enrolled in the agnipath scheme.
A new section in the schedule VDA is added to the reported income from the transactions that include cryptocurrencies and other digital assets.
The updated Schedule SI now includes a new provision, 115BBH, which specifically requires reporting income from the transfer of Virtual Digital Assets. This aims to ensure more accurate reporting in the growing digital asset space.
In addition, Schedule 80G has introduced a requirement to disclose the ARN (donation Reference number) when claiming donations. This step enhances transparency and makes verification easier, strengthening the trust in charitable contributions.
For residents receiving income from foreign retirement benefits, a new clause under Relief u/s 89A now requires disclosure of taxable income for which relief has already been claimed. This measure aims to provide more clarity and compliance for individuals with foreign retirement benefits.
Furthermore, Central Government employees can now claim deductions under Section 80CCH for the full amount contributed to the Agniveer Corpus Fund, promoting contributions towards this important national initiative.
These updates are designed to improve transparency, compliance, and support for both taxpayers and national programs.
FAQ
Q1. What is ITR 2?
ITR 2 is an Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who do not have any proprietorship income from business or profession but have income from more than one house property or foreign income/asset.
Q2. Who should file ITR 2?
ITR 2 shall be filed by individuals and HUFs who have income from capital gains, more than one house property, foreign income/ assets, or income from sources other than salary, such as lottery winnings.
Q3. How do I get access to the form ITR 2 online?
The form ITR 2 is available, and can be filed on the portal of the official site of income tax at https://www.incometax.gov.in/iec/foportal/.
Q4. What documents are needed for filing ITR 2?
You would need Form 16, Form 26AS, bank statements, details of investments for deduction, capital gains statements, and details of foreign assets and income.
Q5. Am I eligible to file ITR 2 if I have changed jobs in a financial year?
Yes, if you have changed jobs, you will have to collect Form 16 from your employers and declare the aggregate income in your ITR 2 form.
Q6. How do I report capital gains in ITR 2?
Capital gains have to be reported under the 'Capital Gains' schedule of the ITR 2 form. You have to specifically indicate whether such gains are short-term or long-term and provide the relevant transaction details.
Q7. What is the last date for filing ITR 2 for F.Y. 2023-2024?
The last date for filing ITR 2 is usually on or before July 31st of the relevant assessment year, that is, 31 July 2024, unless extended by the Income Tax Department.
Q8. How to check ITR 2 filing status?
You can verify your ITR 2 through EVC, Aadhaar OTP, or by sending the signed printout of ITR-V to CPC Bangalore.
Q9. Can I revise my ITR-2 after submitting it?
Yes, if you find any errors or omissions after submission, you may file a revised return at any time before the end of the assessment year or before the completion of the assessment, whichever is earlier.
Q10. What if I have income from a partnership firm?
In case one has an income from the partnership firm, it would need to be reported in ITR 2 itself under the head 'Income from Business and Profession'.
Q11. What is the ITR 2 Form's structure?
Parts A and B are the two parts of the form structure. Part A includes the basic information to be filled and Part B includes the computation of the total income and tax due on the complete earnings.
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