ITR-2 online filing: how to file ITR-2 online with salary income, capital gains and other income for the 2021-22 fiscal year

There are different tax return forms (ITRs), and a taxpayer must choose the correct form when filing their tax return. The ITR forms a taxpayer must use will depend on their residency status and the total income earned from various sources during a fiscal year (FY). The majority of salaried people use the ITR-1 form to file their income tax return. However, some will need to use the ITR-2 form.

Who can use the ITR-2 form?

Individual taxpayers with no business or professional income can use Form ITR-2. Thus, people with one of the following types of income or meeting one of the criteria below are eligible to complete the ITR 2 form:

i) Wage income;

ii) Income from ownership of the house (if there is more than one ownership of the house);

iii) capital gains;

iv) Income from other sources (including lottery winnings, betting on racehorses and other legal means of gambling);

v) Foreign Assets / Foreign Income or claiming treaty relief under agreements to avoid double taxation;

vi) Where tax has been withheld at source (TDS) on certain cash payments;

(vii) where income tax is deferred on employee stock option plans;

viii) Agricultural income above Rs 5,000;

ix) Taxpayers qualifying as non-habitually resident and/or non-resident in the relevant fiscal year.

x) If a taxpayer is a director of a company or invested in unlisted shares

ITR filing method

A taxpayer is required to submit Form ITR-2 electronically. This can be done through a fully online method or in a partially online and partially offline method. In the latter mode, one needs to upload the pre-populated JSON file and use the JSON utility to fill in the details before uploading it to the income tax e-filing website to complete the filing process.

Pre-filled information

The ITR-2 form, if filed entirely online, contains certain pre-filled information such as personal data, salary income, capital gains, dividend income, interest income, etc. However, if you use the partially online and partially offline method, the pre-populated data will need to be imported into the JSON utility.

Step-by-step process for filing Form ITR-2 in full online mode

1. Go to www. incometax.gov.in and login with your credentials. Your PAN/Aadhaar number is the user ID for login.

2. Go to E-File > Income Tax Returns -> ‘File Income Tax Return’ to be selected in the menu.

3. Select the Assessment Year (AY 2022-23), Filing Mode (Online), Applicable Status (Individual) and ITR Form (ITR-2) on the home page and click ” Let’s start”.

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4. Select the applicable reason for filing the tax return as shown below and select “Continue”.

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On the next page, an individual must select the schedule that applies to the income. On the left side of the page, it is divided into 5 categories, namely – General, Income, Deduction, Tax and Others.

In the left part, select the “General” schedule and select the one that concerns you. Similarly, select the “Income” table and select the options that apply to you such as salary, home ownership, capital gains, other sources, etc.

It is important to note that widely applicable schedules like salary, home ownership, deductions, etc. are selected in the default pre-filled ITR, it is necessary (alone) to select all the specifically applicable annexes such as annex FA, AL, exempt income, etc. based on their source of income, disclosure and reporting requirements and click “Continue”.

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On the next page “Continue scheduling questions”, click “Continue”

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5. On the next page, the taxpayer can see questions about general information, wage exemption and deductions.

General informations: The taxpayer must choose the tax regime of his choice (old or new) and click on “Continue”

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Wage exemption: In this tab, the taxpayer is required to select the eligible wage exemptions (e.g. housing allowance, travel leave allowance, etc.) and click “Continue” to continue. The taxpayer also has the option of skipping these questions and the ITR form would capture the exemption details directly from Form 16. If the pre-populated income is correct, confirm it. If it is incorrect, edit it and correct the information.

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Deduction: In this tab, the taxpayer must select the eligible deductions (eg life insurance premium, medical insurance premium, etc.) and click “Continue”. The taxpayer also has the option of skipping these questions and the Form ITR would directly capture the deductions from Form 16, however, if a deduction has not been claimed through the taxpayer’s payroll, it can be claimed by completing the deduction from the Annex. Keep in mind that these deductions can only be claimed if you opted for the old tax regime in the first tab. If you have opted for the new tax regime, you cannot claim any deduction except for the deduction under Article 80CCD (2).

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6. On the next page, the taxpayer will see a summary of all schedules, and they must complete and validate all these tabs to continue:

  • Part A – General Information: In this tab, the taxpayer must verify the pre-filled data of his e-filing profile. Personal information, contact details, case status and bank details will be pre-populated in this form. The taxpayer must select the applicable nature of employment from the drop-down menu and other required fields.
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  • Salary Schedule: This data will be pre-populated on the basis of Form 16, so the taxpayer should check whether the details of income, deductions and tax exemptions requested via the employer have been correctly declared. Also, the breakdown of salary into various components such as base salary, housing allowance, etc. must be provided in this appendix.
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  • Annex House Property: Details of rental income, detached house ownership and interest on home loan will be pre-filled based on Form 16. However, it is advisable to validate the pre-filled details before proceeding. If not pre-filled, the necessary details of rented and self-contained properties must be provided respectively.
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  • Schedule Capital Gains: Capital gains resulting from the sale/transfer of different types of fixed assets have been separated according to their nature. The taxpayer must therefore select the asset sold/transferred from the category, then click on continue to enter the details of the transaction. In case the capital gains result from the sale or transfer of several fixed assets, which are similar in nature (such as foreign shares and/or shares of an Indian company), the capital gains relating to all such fixed assets are to be declared on a consolidated basis. However, in case of transfer of land/building, it is mandatory to calculate the gains of each asset separately. In addition, if shares of a company or an equity-oriented mutual fund or a unit of a business trust on which the STT is paid are purchased on or before January 31, 2018, it is mandatory to enter the details of each transfer.
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  • Schedule Income from other sources – Interest income from savings bank accounts and time deposits, recurring deposits, dividend income (to be reported quarterly), accrued interest on provident fund contributions to the extent taxable, account income benefits maintained in a notified account and other than the notified country, etc., must report according to this schedule.
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  • Schedule of carried forward losses (CFL): In the case of losses carried forward from previous years, the taxpayer must complete this schedule in order to offset this loss against the current year’s income to the extent available and to carry forward the remainder for future years.
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One should select the relevant AY and make up the losses carried forward from the previous year’s ITR (filed on or before the due date), by category, as mentioned below:

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  • Taxes paid: The details in this tab would be pre-populated from Form 26AS/AIS with TDS, withholding tax and self-assessment tax, if any, paid by the taxpayer. The taxpayer must validate the details and click on ‘Confirm’.
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  • Part B TTI: This tab presents the calculation of the total income tax liability and the taxpayer can consult the tax summary (Nil to pay/refund) of the tax return. Once all schedules are “confirmed” and the Part B TTI is verified, the taxpayer should click on “Preview Declaration” for the declaration tab.
  • Declaration tab: Once all the details of the form have been completed, the taxpayer is required to fill in the required details in the declaration confirming that all the details given in the declaration are correct and complete. After confirmation, click on “Go to preview”, here the taxpayer can download the draft from RTI and if all the details are correct, the taxpayer can click on “Proceed to validation”. If the list of errors is displayed, the taxpayer can click on each error and correct it. If there are no errors, the taxpayer can click ‘Proceed to verification’.
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Verification: After successful validation, the taxpayer can proceed to verify the tax return electronically via net banking, Aadhaar OTP, etc. or can print the ITR-V (acknowledgment of receipt) and sign it manually and send it to CPC, Department of Income Tax, Bengaluru within 120 days of electronic filing of the same.

Note that the signature must be in blue ink and you can only send the ITRV by express mail or regular mail. The ITR-V cannot be sent by post or registered mail.

(The author is Partner and Head, Global Mobility Services – Tax, KPMG in India.)

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