Understanding the tax filing process is an essential aspect of personal finance management. In India, the Income Tax Department offers several Income Tax Return (ITR) forms, each pertaining to a different category of taxpayers. This article provides a comprehensive step-by-step guide on how to file ITR-2, meant for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession.
Before we delve into the details of how to file ITR-2, let’s understand who this form is meant for.
Who should file ITR-2?
ITR-2 form is meant for individuals and HUFs who have:
- Income from salary or pension,
- Income from multiple houses,
- Capital gains income (both long term and short term),
- Income from other sources, including lottery wins and race horses,
- Agricultural income over Rs. 5,000, and
- Foreign income or an asset outside India.
How to file ITR-2?
ITR-2 can be filed both manually and online. However, from the financial year (FY) 2017-18, if your income is more than Rs. 5 lakh, or you are seeking a refund, you must file your ITR electronically.
Here, we detail the steps involved in e-filing your ITR-2:
1. Download: Go to the Income Tax Department's official website. Navigate to the “Downloads” section, select "Offline Utilities" and then "Income Tax Return Preparation Utilities". Download the applicable ITR-2 form.
2. Prepare: Open the utility and start filling out the form. The utility will auto-calculate your tax as you fill in your data. Make sure to fill in all the mandatory fields.
3. Validate: After filling all the details, validate each section using the 'Validate' button. The 'Calculate Tax' button will show you the tax liability or the refund due, if any.
4. Generate XML: Once you have filled in the information and validated the form, generate an XML file by clicking on the 'Save Draft' button. This XML would be used for uploading the return.
5. Upload: Login to your profile on the official Income Tax e-filing website using your user ID (PAN), and password. Go to 'e-File' > 'Income Tax Return' and upload the generated XML.
6. Verify: After your return has been successfully uploaded, choose a mode of verification- by generating an “EVC using bank account details” or by using “Aadhaar OTP”. You can also send a signed physical copy of ITR-V (Acknowledgement receipt) to 'Centralised Processing Centre, Income Tax Department, Bengaluru - 560500' within 120 days of filing your return electronically.
7. E-verification: If you have opted for e-verification, you’ll get an OTP on your Aadhaar-linked mobile number. Enter this OTP when prompted to complete the verification process.
Please note that filing your ITR-2 online involves careful attention to detail to avoid any errors. All relevant documents and details should be kept handy.
Documents required for filing ITR-2
While you are filing ITR-2, the essential documents you will need are:
- Form 16 from your employer
- Form 26AS which is your tax credit statement
- Details of properties if you have more than one property
- Details of capital gains if you have sold shares or property
- Bank details and interest certificates
- Details of all your financial investments
- Proof of tax-saving investments, etc.
Remember: Always make sure that the data stated in the return matches with the information in your Form 16/16A and Form 26AS.
While the process of preparing and filing ITR-2 can seem a bit complex, the desire for financial compliance and achieving peace of mind should encourage all eligible taxpayers to accurately file ITR-2. Consider consulting with tax professionals or chartered accountants if you encounter any challenges during the procedure. The most important part is ensuring that all information is accurate and submitted within the given deadlines, to avoid penalties and avail the full benefits of tax exemptions.
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