ITR 2 Online Filing: How to file ITR-2 online with salary income, capital gains and other incomes for FY 2021-22
Who can use Form ITR-2?
Individual taxpayers not having business or professional income can use Form ITR-2. Thus, persons with any of the following types of incomes or fulfilling any of the below criteria are eligible to file Form ITR 2:
i) Salary Income;
ii) House property Income (if there is more than one house property);
iii) Capital Gains;
iv) Income from Other Sources (including winning from lottery, bets on race horses and other legal means of gambling);
v) Foreign assets / Foreign income or claiming any treaty relief under double taxation avoidance agreements;
vi) Where tax has been deducted at source (TDS) on certain cash payments;
vii) Where income tax is deferred on Employee Stock Option Plans;
viii) Agricultural income more than Rs.5,000;
ix) Taxpayers qualifying as Not Ordinarily Resident and/or Non-Resident during the relevant FY.
x) If a taxpayer is a director in a company or invested in unlisted equity shares
ITR filing mode
A taxpayer is required to submit Form ITR-2 electronically. This can be done via a completely online method or in a partially online and partly offline method. In the latter mode, one needs to download the prefilled JSON file and use the JSON utility to fill the details before uploading the same on the income tax e-filing website to complete the filing process.
Form ITR-2, if filed completely online, comes with certain pre-filled information such as personal details, salary income, capital gains, dividend income, interest income, etc. However, if you use the partial online and partial offline method, the pre-filled data will be required to be imported to the JSON utility.
Step by Step process for filing Form ITR-2 in complete online mode
1. Go to www.incometax.gov.in and login with your credentials. Your PAN/Aadhaar number is user ID for login.
2. Go to E-File > Income Tax Returns -> ‘File Income Tax Return’ to be selected from the menu.
3. Select the Assessment Year (AY 2022-23), Mode of filing (online), applicable status (individual) and ITR Form (ITR-2) on the landing page and click on “Let’s get started”.
4. Select the applicable reason for filing the return of income as shown below and select ‘Continue.’.
On the next page, an individual is required to select the schedule which is applicable to income. On the left-hand side of the page, it is bifurcated into 5 categories namely – General, Income, Deduction, Tax and Others.
From the left-hand side select schedule ‘General’ and select the one applicable to you. Similarly, select the schedule ‘Income’ and select the options that are applicable to you like salary, house property, capital gains, other sources etc.
It is important to note that broadly applicable schedules like salary, house property, deductions etc. are selected in the prefilled ITR by default, one must (on one’s own) select all the specifically applicable schedules like Schedule FA, AL, exempt income etc. basis his/her source of income, disclosure and reporting requirements and click on “Continue”.
In the next page “Proceed to schedule questions”, click on “Continue”
5. On the next page, taxpayer can see questions on General information, salary exemption and deductions.
General Information: Taxpayer should opt for tax regime as per his/her choice (old or new) and click on ‘Continue’
Salary Exemption: In this tab, the taxpayer is required to select the eligible salary exemptions (e.g. House Rent Allowance, Leave Travel Allowance 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. If the pre-filled income is correct, then confirm it. If incorrect, then edit it and correct the information.
Deduction: In this tab, the taxpayer is required to select the eligible deductions (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 payroll, 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 the old tax regime in the first tab. If you have opted for the new tax regime, then you cannot claim any deductions except for deduction under Section 80CCD (2).
6. On the next page, the taxpayer will see a summary of all schedules, and one has to fill and validate all these tabs to proceed further:
- Part A – General Information: In this tab, the taxpayer must verify the pre-filled data from his/her e-filing profile. Personal information, contact details, filing status, and bank details will be pre-filled in this form. Taxpayer has to select applicable nature of employment from drop-down menu and other mandatory fields.
- Schedule Salary: This data will be pre-filled based in Form 16, thus, the taxpayer should verify whether income details, deductions and tax-exemptions claimed via the employer have been reported correctly. Also, breakdown of salary into various components like basic salary, house rent allowance etc. are required to be provided in this schedule mandatorily.
- Schedule House Property: Details of the rental income, self-occupied house property and interest on housing loan will be pre-filled basis the Form 16. However, it is advisable to validate the pre-filled details before proceeding. If not pre-filled, then the necessary details of the let out and self-occupied properties respectively should be provided.
- Schedule Capital Gains: Capital gains arising from sale/transfer of different types of capital assets have been segregated based on their nature, hence taxpayer has to select capital asset sold/transferred from the category 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 similar nature (such as of foreign equity and/or equity shares of an Indian company), capital gains in respect of all such capital assets are to be reported in a consolidated manner. However, in case of transfer of land / building, it is mandatory to compute the gains from each asset separately. Also, if equity shares of a company or an equity-oriented mutual 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.
- Schedule Income from Other Sources – Interest income from saving bank accounts and fixed deposits, recurring deposits, dividend income (to be reported on quarter-wise), interest accrued on contribution to provident fund to the extent taxable, income from retirement benefit account maintained in a notified and other than notified country etc., needs to report under this schedule.
- Schedule Carry Forward Losses (CFL): In case of any brought forward losses from earlier years, taxpayer should fill this schedule in order to set-off such loss from current year income to the extent available and to carry forward remaining for future years.
One should select the relevant AY and fill carry forward losses from previous year ITR (filed on or before the due date), category wise as mentioned below:
- Taxes Paid: Details in this tab would be pre-filled from Form 26AS/AIS with TDS, , advance-tax and self-assessment tax, if any, paid by the taxpayer. The taxpayer needs to validate the details and click on ‘Confirm’.
- Part B TTI: This tab shows the computation of tax liability on total income and the taxpayer can view the tax summary (Nil payable / refund) of the tax return. Once all the schedules are “Confirmed” and Part B TTI is verified, the taxpayer has to click on “Preview Return” for the declaration tab.
- Declaration tab: Once all the details in the form have been populated, the taxpayer is required to fill the requisite details in the declaration confirming that all details provided in the return are accurate and complete. After confirmation, click on ‘Proceed to preview’, here the taxpayer can download the draft ITR and if all details are fine, taxpayer can click on “Proceed to Validation”. If list of errors is shown, taxpayer can click on each error and correct the same. If there are no errors, taxpayer can click on ‘Proceed to verification’.
Verification: After successful validation, the taxpayer may proceed to verify tax return either electronically through net banking, Aadhaar OTP etc. or can take printout of the ITR-V (acknowledgment) and sign it manually and send it to the CPC, Income Tax Department, Bengaluru within 120 days of e-filing the same.
Note that signature has to be in blue ink and you can send the ITRV only via speed post or normal post. The ITR-V cannot be sent via courier or registered post.
(The writer is Partner and Head, Global Mobility Services – Tax, KPMG in India.)