Many salaried people file their income tax return using the ITR-1 form. However, it may happen that you do not meet the eligibility criteria for filing a tax return using the ITR-1 form. You might have to use the ITR-2 form to file your income tax return.
Here is a look at who should use the ITR-2 form.
Who is eligible to file tax return using ITR-2?
ITR-2 is much a more comprehensive tax return form as compared to the ITR-1 form as it requires a more detailed breakup of a taxpayer’s various sources of income.
ITR-2 must be used by the individual taxpayer if he/she meets any of the criteria mentioned below:
a) If you are resident (ordinarily or non-ordinarily) or a non-resident individual
b) Hindu Undivided Family (HUF)
c) A director of a company
d) Holding investments in unlisted equity shares
e) Having income from – salaries, more than one house property, capital gains, income from other sources such as interest income, dividends etc.
f) Having income from assets outside India such as dividend from foreign companies share etc.
g) Holding assets outside India
h) If there are any losses to be carried forward or brought forward under the head ‘Income from house property’,
i) If you have income from bets on horse racing, winnings from lottery and other means of gambling
j) If TDS was applicable to you for the certain cash payments made during the FY 2021-22
k) If the income tax was deferred on Employee Stock Option plans
l) If agricultural income is more than Rs 5,000
m) If you are claiming any treaty relief under the double taxation avoidance agreement
What will happen if an incorrect ITR form is used?
Remember while filing ITR, you must ensure that you have selected the correct ITR form. If the ITR is filed using the wrong tax return form, then the income tax department will send you a tax notice. The tax department will ask you to file ITR using the correct tax return form applicable to you.