It’s tax season in India, and filing your Income Tax Return (ITR) can be overwhelming, especially if you have cryptocurrency investments.
Let’s begin by understanding ITR-2. It’s a specific income tax return form designed for individuals and Hindu Undivided Families (HUFs) with income structures beyond the scope of ITR-1.
This includes income from capital gains (cryptocurrency, stock market sales, property sales), foreign income, and agricultural income exceeding Rs. 5,000. Crypto gains, a relatively new asset class, also fall under the ambit of ITR-2.
Hence, this blog is here to help you through the e-filing process for ITR-2, specifically designed for individuals with income from sources other than salary and traditional investments.
Understanding The Layout Of ITR 2
Now that you have understood the basics of ITR-2, let’s examine its layout. The ITR-2 form is divided into PART A and PART B. We’ll discuss both parts in detail.
Part A:
This part of the ITR form contains the following information:
- General Information
- Name
- Date of Birth
- PAN (Permanent Account Number)
- Residential Address
- Office Address
- Mobile Number
- Filing Status
Part B:
This part of the ITR form is further categorised into two sections:
- Part B-TI: It pertains to calculating total income, which is income subject to taxation.
- Part B-TTI: This part involves assessing the tax liability based on the total income determined in Part B-TI.
Schedules
The ITR-2 Form also has a list of schedules that provides a comprehensive framework for reporting financial details and ensuring compliance with the Income Tax Act. Here’s an overview of all the schedules mentioned in ITR-2:
Schedule S:
This schedule mandates the disclosure of income earned from salaries, ensuring transparency in reporting earnings from employment.
Schedule 80G:
Donations eligible for deduction under Section 80G of the Income Tax Act are documented in this section, promoting transparency in philanthropic contributions.
Schedule HP:
In this section, individuals must furnish details of income generated from house property, ensuring comprehensive reporting of rental income or property-related earnings.
Schedule OS:
This schedule necessitates computing income from other sources, ensuring all earnings beyond salaries, capital gains, and house property are accounted for.
Schedule CFL:
This schedule records details of losses to be carried forward to subsequent financial years, allowing for the systematic handling of financial setbacks.
Schedule CG:
Taxpayers must compute income derived from capital gains under this schedule, facilitating the accurate assessment of profits from asset sales or investments.
Schedule BFLA:
Taxpayers must provide an income statement after offsetting unabsorbed losses from previous financial years, ensuring fair treatment of losses carried forward.
Schedule VDA
This schedule records details of losses to be carried forward to subsequent financial years, allowing for the systematic handling of financial setbacks.
Schedule CYLA:
This schedule entails an income statement after setting off losses incurred during the current financial year, enabling a clear assessment of net taxable income.
Schedule 80GGA:
Contributions towards rural development or scientific research eligible for deduction are outlined in this section, promoting support for societal advancement.
Schedule VI-A:
Taxpayers can claim deductions from their total income per Schedule VI-A’s provisions, facilitating the accurate calculation of taxable income.
Schedule AL:
Taxpayers with total income exceeding INR 50,00,000 must disclose their assets and liabilities at the year-end in this schedule, promoting transparency in wealth declaration.
Schedule AMT:
This schedule computes the alternate minimum tax payable under Section 115JC of the Income Tax Act, ensuring compliance with tax obligations.
Schedule AMTC:
Tax credits for individuals are computed under Section 115JD and documented in this schedule, facilitating the reduction of tax liabilities.
Schedule DI:
This schedule documents details of tax-saving investments, deposits, or payments eligible for deduction or exemption, facilitating tax planning and compliance.
Schedule EI:
This schedule provides details of exempt income, which is not included in the total taxable income, ensuring an accurate tax assessment.
Schedule FA:
This section provides details of income from foreign sources and foreign assets, ensuring comprehensive reporting of global financial holdings.
Schedule FSI:
This schedule details income arising or accruing outside India, ensuring compliance with tax regulations for foreign earnings.
Schedule PTI:
This section documents income details from business trusts or investment funds, as per Sections 115UA and 115UB, ensuring comprehensive investment income reporting.
Schedule SI:
This section details income subject to taxation at special rates, ensuring appropriate treatment of specific types of earnings.
Schedule SPI:
This schedule presents the income of a taxpayer’s spouse, minor child, or other related individuals, per the provisions of schedules HP, CG, and OS.
Schedule TR:
In this schedule, taxpayers must disclose taxes paid outside India, promoting transparency regarding international financial transactions.
Schedule 5A:
This schedule outlines the apportionment of income between spouses, ensuring fair income distribution for tax purposes.
Documents You Need To File ITR 2
Gathering all the necessary documents is essential to ensure a smooth tax filing process. Here’s a comprehensive list of documents you may need:
- Form 16: If you earn a salary, your employer should issue Form 16, which outlines details of your income and tax deductions.
- Form 16A: If you’ve earned interest on fixed deposits or savings accounts and TDS has been deducted, you’ll require Form 16A, issued by the deductor.
- Form 26AS is essential for verifying TDS on salary and other incomes. It can be downloaded from the e-filing portal and provides a consolidated view of tax deducted at source.
- Rent Paid Receipts: If you live in rented premises and still need to submit rent details to your employer for HRA calculation, you’ll need rent receipts for an accurate computation.
- Summary of Capital Gain Transactions: For any capital gains transactions in shares or securities, you’ll need a summary or profit/loss statement to calculate capital gains accurately.
- Bank Passbook and Fixed Deposit Receipts (FDRs): These documents are necessary to determine the interest income earned during the year.
- Details of Rental Income: If you’ve received rent from a rented property, you’ll require details of tenant payments and any interest on borrowed capital to calculate income from the house property.
- Documents for Claiming Losses: If you’ve incurred any losses during the current year and intend to claim them, you’ll need relevant documents to support your claim.
- Copy of ITR-V: To claim losses from the previous year, you’ll need a copy of the last year’s Income Tax Return-V, which discloses the loss.
- Proofs for Tax Saving Deductions: Documents supporting tax-saving deductions under sections 80C, 80D, 80G, and 80GG are essential. These may include receipts for life and health insurance premiums, donation receipts, rent receipts, and tuition fee receipts, especially if they were not considered in your Form 16.
How To File ITR 2 Online?
Taxpayers can file their income tax returns either offline or online. However, it’s important to note that only individuals aged 80 years or above can choose the offline filing method specifically for ITR-2.
Those eligible for offline filing can quickly complete the process by using a physical ITR-2 form along with a bar-coded return of income details. Upon submission of the paper form, the taxpayer receives an acknowledgement from the Income Tax Department.
Alternatively, taxpayers can opt for online filing of ITR-2 by following these steps:
- Step 1: Visit the official website of income tax e-filing.
- Step 2: Log in to the portal using your user ID (PAN), password, and CAPTCHA code.
- Step 3: Select the ‘e-File’ option from the menu.
- Step 4: Choose ‘Income Tax Return’ from the options available.
- Step 5: Your PAN details will auto-populate on the income tax return page. Proceed to select the ‘Assessment Year‘ and then specify the ‘ITR – 2.’
- Step 6: Select the ‘Filing Type’ and choose ‘Original’ or ‘Revised Return.’
- Step 7: Click on ‘Continue’ to proceed.
- Step 8: Carefully read and follow the provided instructions. Then, fill out the ITR-2 form by entering all applicable and mandatory fields.
- Step 9: Remember to periodically save your progress by clicking the ‘Save Draft’ button to prevent data loss due to session timeout.
- Step 10: Choose an appropriate verification option under the ‘Taxes Paid‘ and ‘Verification’ tabs.
- Step 11: Select one of the following options for verifying your income tax return:
- E-verification must be made within 30 days of filing the ITR.
- Verification by sending a signed ITR-V through the post within 30 days of filing the ITR.
- Step 12: Click ‘Preview and Submit’ to review the accuracy of all data entered in your ITR.
- Step 13: Click ‘Submit’ to complete the submission process.
Submit ITR-2 online hassle-free by following these steps to fulfil your tax obligations efficiently.
Conclusion
You’ve successfully navigated the e-filing process for ITR-2! Following this guide, you can submit your tax return accurately and efficiently for FY 2023-24 (AY 2024-25). Remember, staying organised with proper record-keeping is essential, especially for crypto investors. However, keeping track of your crypto transactions can be difficult.
So, why not consider the benefits of using a reliable crypto tax-calculating platform like KoinX? It can streamline tax calculation processes. The platform integrates with popular Indian crypto exchanges and wallets to import your transactions easily. Plus, it automates complex calculations and generates tax reports tailored to your ITR-2 needs. Join KoinX today and get a detailed crypto tax report, which you can use to file your ITR-2 form.
