Here’s a Step-by-Step Guide to Filing ITR-2

Filing income tax returns (ITR) is a crucial responsibility for every taxpayer. If you fall under the ITR-2 category, this column aims to provide you with a simplified, step-by-step procedure to help you easily navigate the process. The ITR-2 form is typically applicable for individuals and Hindu Undivided Families (HUFs) who have income from various sources, excluding business or profession. Let's dive into the step-by-step guide to file your ITR-2 successfully.

Step 1: Gather Essential Documents and Information: Before you begin the filing process, ensure that you have the following documents and information ready:

1.    Form 16/16A: These documents provide information about your salary and tax deducted at source (TDS).
2.    Form 26AS/AIS/TIS: This statement contains details of tax credits, TDS, and other relevant information.
3.    Bank statements: Collect statements reflecting your income from interest, dividends, or other financial transactions.
4.    Capital gains details: If you have sold assets like property or stocks, gather the necessary documents for the transaction.
5.    Details of foreign assets and income (if applicable): If you possess any foreign assets or have earned income from abroad, gather the relevant documents.
6.    Aadhaar card, PAN card, and other identification and contact: Ensure you have these documents readily available.
7.    Login with Credentials: Visit www.incometax.gov.in and log in with appropriate login credentials.

Step 2: Choose the Correct Assessment Year: While filing your ITR-2, select the appropriate assessment year and the mode of filling i.e. Online/Offline. The assessment year is the year following the financial year for which you are filing the return. For example, if you are filing for the financial year 2022-2023, the assessment year will be 2023-2024.

Step 3: Select the status of Assesse: The next step is to select the status of the assessee. The ITR-2 is principally applicable to individuals and HUFs. However, the system prefilled the status based on the status selected when registering on the income tax portal.

 

Step 4: Select the ITR-2 Form: The next step is to select the ITR-2 form by scrolling the drop-down and then clicking the proceed. There, after form will be enabled for filling, and you are required to fill out the requisite details such as the reason for filling out the ITR, Confirming personal details, Validating Bank account, Nature of employment, etc. Ensure you enter the correct figures and double-check for errors or omissions.

Step 5: Select Income Details: In this section, you must provide detailed information about your income from various sources. Include details such as salary, rental, capital gains, and income from other sources. Fill in the required fields accurately, and ensure you have the necessary supporting documents. Also, ensure filling necessary details in the schedules provided in the form, if applicable.

Step 6: Deductions and Taxable Income: Specify the deductions you are eligible for under various sections of the Income Tax Act. This includes deductions for investments, insurance premiums, home loans, and other permissible expenses. Appropriate deductions can be selected by scrolling the dropdown. Calculate your taxable income after applying the deductions.

Step-7 Compute Your Tax Liability: The form will automatically calculate your tax liability as per the income particulars provided in the form. It Considers the various deductions and exemptions available to you to minimize your tax burden. It is necessary to ensure importing of necessary and accurate TDS/TCS/Advance Tax details from form 26AS.

Step 8: Validate, Verify and Generate the JSON File: Validate the file ITR-2 form using the validation criteria provided on the income tax website. This step ensures that the form is error-free and ready for submission. After validation, generate the JSON file and file it online.

Step 9: Verify the Return: You need to verify your return after successfully filling the JSON file. Several methods are available for verification, such as using an electronic verification code (EVC), Verification through Aadhar OTP, Verification through Digital Signature or sending a signed physical copy to the Centralized Processing Centre (CPC) if the return is not verified electronically.

Step 10: Acknowledgment and Verification: The income tax department will issue an acknowledgement receipt once your return is successfully verified. You will receive it on your registered email address. Keep the acknowledgement safe for future reference.

Conclusion: Filing your ITR-2 form doesn't have to be a daunting task. By following this step-by-step guide, you can navigate the process smoothly and ensure accurate filing of your income tax returns. Remember to gather all the necessary documents, provide accurate information, and validate your form before submission. By fulfilling your tax filing responsibilities, you contribute to the nation's progress while complying with tax regulations.
 

The author is a Co-Founder & Litigation Head of Lex N Tax.