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Income Tax

ITR 2 Return Filling

ITR Form 2 is for Individuals and HUF receiving income other than income from “Profits and Gains from Business or Profession”. 

Thus persons having income from following sources are eligible to file Form ITR 2

  • Income from Salary/Pension
  • Income from House Property(Income Can be from more than one house property)
  • Income from Capital Gains/loss on sale of investments/property (Both Short Term and Long Term)
  • Income from Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling)
  • Foreign Assets/Foreign Income
  • Agricultural Income more than Rs 5000
  • Resident not ordinarily resident and a Non-resident

A Director of any company and an individual who is invested in unlisted equity shares of a company will be required to file their returns in ITR-2.

 

How to file income tax online, if you have salary, Capital Gains and other incomes for FY 2020-21

Selection of the correct income tax form is very important, for choosing the ITR form is depends on the residential status and total income earned during the financial year (FY) 2020-21. Our CA team helps to tax advisory service seamlessly.

 

Who can use Form ITR-2 for Tax filing?

Individuals and HUF not having business or professional income can use Form ITR-2.

Thus, person with below criteria are eligible to file Form ITR 2:

Salary Income

House property Income

Capital Gain

Income from Other Sources

Foreign Income

Agricultural Income

 

Tax Return ITR filing mode

ITR-2 can be filed by offline or online mode. To avoid the various errors while process the form; offline mode is best option. We from CA service provide various filing service online mode, keeping in mind of various to apply the right sections and update.

 

Details needed to file ITR

Advisable to, keep all the relevant information about the source of income and documents pertaining to his income and investments, expenditures etc., in proper way in excel or word format handy.

 

Steps to fill ITR-2 – Income from salary, capital gains and other sources

Go to https://eportal.incometax.gov.in/iec/foservices/#/login and login with your credentials.

Go to E-File > Income Tax Returns -> File Income Tax Return to be selected from the menu.

Select the Assessment Year, applicable status and ITR Form and click on “Let’s get started”. Here we have chosen online method for filing ITR-2.

Select the applicable reason for filing the return of income as shown below and select ‘Continue.’ Here we have selected ‘Taxable income is more than basic exemption limit’.

On the next page, the taxpayer would see different schedules bifurcated into 5 categories under ‘Select Schedule’: General, Income, Deduction, Tax and Others. Though broadly applicable schedules like salary, house property, deductions etc. are selected in the prefilled ITR by default, and click on “Continue”.

In the next page “Proceed to schedule questions”, click on “Continue”.

General Information: The taxpayer is required to select whether he wishes to opt for the new tax regime. Upon confirming click on Continue as shown below:

Salary Exemption: In this tab, the taxpayer is required to select the eligible salary exemptions (for e.g. House Rent Allowance, Leave Travel etc.) and click on ‘Continue’ to proceed further. Taxpayer also has an option to skip these questions and the ITR form would capture the exemption details from Form 16 directly, however, if any exemption has not been claimed via taxpayer’s company, then it would have to be specifically mentioned under respective question. If not done here, then taxpayer will not get chance to claim such tax exemption in the future.

Deduction: In this tab, the taxpayer is required to select the eligible deductions (for e.g. Life Insurance Premium, Medical Insurance Premium etc.) and click on ‘Continue’. Taxpayer also has an option to skip these questions and the ITR form would capture the deductions from Form 16 directly, however, if any deduction has not been claimed via taxpayer’s Company, then it can be claimed by filling Schedule Deduction. Do keep in mind that these deductions can be claimed only if you have opted for old tax regime in the first tab. If you have opted for new tax regime, then you cannot claim any deductions except for deduction under Section 80CCD (2).

The next page will have a summary of all schedules, and one has to validate the same to proceed further.

Information to be validated in respective schedules has been summarized below:

Part A – General Information: In this section, one must verify the pre-filled data from his/her e-filing profile. The taxpayer will not be able to edit some of the personal data in the form, however, can make the necessary edits in their e-filing profile. Contact details, filing status, residential status and bank details will be pre-filled in this form.

Schedule Salary: This information would be pre-filled from Form 16; thus, taxpayer should verify that the salary income, tax exemptions and deductions as claimed via the employer have been captured accurately. Also, breakdown of salary into various components like basic salary, House Rent Allowance, Conveyance allowance, perquisites etc. are required to be provided in this schedule mandatorily.

Schedule Capital Gains: Capital Gains arising from sale/transfer of different types of capital assets have been segregated. Hence, one must select type of capital asset sold/transferred as shown below and then click on continue to enter the transaction details. In a case where capital gains arises from sale or transfer of more than one capital asset, which are of same type (like from sale of securities including foreign shares and/or equity shares of a domestic company), a consolidated computation of capital gains in respect of all such capital assets of same type has to be entered. But in case of transfer of land / building, it is mandatory to enter the computation towards each asset separately. Also, if equity shares of a company or an equity-oriented fund or a unit of a business trust on which STT is paid are bought on or before 31st January 2018, it is mandatory to enter scrip-wise details of each transfer under Schedule 112A as shown below.

Schedule Income from other sources – Interest from fixed deposits, savings interest, dividend income etc. are required to be filled in this schedule. Further, dividend income is required to be reported quarter-wise as shown below:

 

Once all the schedules are “Confirmed” and Part B TTI is verified, the taxpayer has to click on “Preview Return” where he/she can download the ITR and then click on “Next” for the declaration tab.

 

Tax return Verification

After successful validation, the taxpayer may proceed to very tax return through Aadhaar OTP  or can sign a physical printout of ITR V manually and send it to the CPC, Income Tax Department, Bengaluru within 120 days of e-filing the return.

 

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Process of Registration

Checklist

Offline:
now Individuals not having income from business or profession can file their ITR-2 offline:
Return can be filed offline by:
By furnishing a return in a xml format to be uploaded into ITR
By uploading the return in xml format
The Income Tax Department will issue you an acknowledgement at the time of submission of your physical paper return.

Online/Electronically:
By furnishing the return electronically under digital signature or Aadhar authentication
By transmitting the data electronically and then submitting the verification of the return in Return Form ITR-V
If you submit your ITR-2 Form electronically under digital signature, the acknowledgement will be sent to your registered email id. You can also choose to download it manually from the income tax website. You are then required to sign it and send it to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing. Remember that ITR-2 is an annexure-less form i.e. you do not have to attach any documents when you send it.

Frequently Asked Questions

Yes you can. Read our guide to understand the process in depth.

Certain income is exempt under section 10 of the Income Tax Act. Exempt income includes – Allowances which may be exempt to a certain extent, for example, HRA, LTA, transport allowance etc. Gratuity, leave encashment, pension may be exempt under section 10 of the Act.

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