What is ITR-2?
ITR-2 is an income tax return form used in India by individuals and Hindu Undivided Families (HUFs) who earn income from sources other than business or profession. It applies to taxpayers with income from salary, multiple residential properties, capital gains (such as from the sale of property or investments), and other sources like interest income and dividends. It also requires disclosure of foreign assets and income, if applicable. Taxpayers filing ITR-2 must provide detailed information across various schedules, including income details, deductions under Chapter VI-A (such as 80C, 80D), taxes paid, and exemptions claimed. Since ITR-2 does not accommodate business or professional income, those earning from such sources must file ITR-3 instead. The form is submitted electronically via the Income Tax Department’s portal or authorized e-filing platforms, with a typical filing deadline of July 31st of the assessment year.
Who Can File ITR-2?
The ITR-2 form is applicable to individuals or HUFs meeting the following criteria:
Income from salary or pension
Rental income from multiple house properties
Capital gains or losses (short-term and long-term) from the sale of real estate or investments
Income from other sources, including winnings from lotteries, horse racing, or other taxable gaming activities
Agricultural income exceeding ₹5,000
Foreign income or ownership of foreign assets
Non-resident or Resident but Not Ordinarily Resident (RNOR) status
Benefits of Filing Correctly:
✅ Compliance with Law: Avoid legal troubles and ensure smooth tax audits.
✅ Capital Gain Adjustments: Optimize tax benefits on long-term and short-term capital gains.
✅ Carry Forward Losses: Losses (such as capital losses) can be carried forward for set-off against future gains.
✅ Foreign Asset Declaration: Avoid penalties for undeclared foreign income.
✅ Prevent Notices: Errors can lead to tax department scrutiny.
