Guide to E-file ITR 2 when you have sold house property, land or building?

ITR-2 is a type of Income Tax Return (ITR) form that is used by taxpayers whose annual income is more than Rs 50 lakh from the following sources in a financial year -

1. From salary or pension;
2. From house property;
3. Capital gains from selling property, land, shares, etc
4. Other sources (Like lottery prizes, etc.)

In other words, ITR 2 is only applicable to individuals and HUFs who do not have income from any business or profession. Read on to understand the eligibility to file ITR 2 in AY 2021-22 and how to file ITR 2 on the new income tax portal.

What is Form 16?

Form 16 is a detailed summary of the salary paid & taxes deducted by your employer. This form acts as proof that your employer has deposited TDS to the income tax department accurately on your behalf.

It is mandatory for your employer to generate and distribute Form 16, for a financial year, on or before 15th June of the succeeding financial year. However, this due date has been extended to 31st July 2021 for FY 2020-21.

Who is eligible to file ITR 2?

Individuals and HUFs having income from any source except “Profits and Gains from Business or Profession” can file their ITRs using ITR 2 form. Here is the list of taxpayers who are eligible to use ITR 2.

• Individuals & HUFs having income from the following sources
  1. Income from Salary/Pension
  2. Income from House Property(Income Can be from more than one house property)
  3. Income from Capital Gains/loss on sale of investments/property (Both Short Term and Long Term)
  4. Income from Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling)
  5. Foreign Assets/Foreign Income
  6. Agricultural Income more than Rs 5000
• Taxpayers who are resident not ordinarily resident (RNOR) and Non-residents (NR)
• Director of any company registered in India
• An individual who is invested in unlisted equity shares of a company

Who cannot file ITR 2?

Here is the list of taxpayers who cannot file their ITR using ITR-2.

• 1. Individuals or HUFs having income from business or profession

How to e-file ITR 2 Form for AY 2021-22?

Before FY 2020-21, taxpayers were required to file ITR-2 using the offline utilities ( upload XML online). However, with the launch of the new income tax portal, the income tax department has enabled online filing of ITR 2 from FY 2020-21 onwards.

Here’s the step-by-step process to e-file ITR 2 for FY 2020-21 .

• 1. Visit the new income tax portal
• 2. Log in using username (Your PAN) & password
• 3. On the dashboard, click on e-File > Income Tax Returns > File Income Tax Return
• 4. Select Assessment Year (AY) as AY 2021- 22 & click 'Continue'
• 5. Select the online filing mode and click on Proceed
  Please note that if you have already filled the ITR form, click on ‘Resume Filing’. If in case you want to start afresh, you should click on 'Start New Filing'
• 6. Select the status among Individual, HUF, & others accordingly and click on 'Continue'
• 7. Then, choose 1 option from the options below to fill the correct ITR form. In this case, select ITR 2 and then click on 'Proceed with ITR 2' Please note:
  1. If you're not sure whether ITR or schedules apply to you or what your income and deductions are, your answers to the questions will help you figure it out and help you file your ITR correctly
  2. You can skip these questions if you know your ITR or schedules and income & deduction details.
• 8. Carefully note the list of documents required and click on 'Let's get started’ to start filing ITR 2
• 9. Select the options applicable to you and click on 'Continue'
• 10. Check your pre-filled details and make necessary changes. Then, fill in the blanks with the remaining/additional info (if required). At the end of each section, click on ‘Confirm’.
• 11. Fill out the various sections with income and deduction information. Then, click ‘Proceed’ after you've completed and confirmed all the sections of the form.
• 12. On the next page, select and fill in the schedules applicable to you and click on ‘Confirm’ at the end of every schedule
• 13. After filling in all the details and paying the tax liability (if any), click 'Preview Return'.
• 14. Then, you will be taken to the ‘Preview and Submit Your Return page.’ On this page, enter the place, select the declaration checkbox and click ‘Proceed to Validation.’
• 15. You will be directed to the ‘Complete your verification’ page. Select any preferred verification option and click on 'Continue'
  Please note that e-verification is the easiest & quickest option to complete your ITR filing process.
• 15.A success message will appear after you e-Verify your return, along with the Transaction ID and Acknowledgment Number. A confirmation message will also be sent to the mobile number and email address provided on the e-Filing portal.