Income Tax Return: An Overview  

 

What is Income Tax Return?
 

An Income tax return (ITR) is a form used to file information about your income and tax to the Income Tax Department. The tax liability of a taxpayer is calculated based on his or her income. In case the return shows that excess tax has been paid during a year, then the individual will be eligible to receive an income tax refund from the Income Tax Department.

As per the income tax laws, the return must be filed every year by an individual or business that earns any income during a financial year. The income could be in the form of a salary, business profits, income from house property or earned through dividends, capital gains, interests or other sources.

Tax returns have to be filed by an individual or a business before a specified date. If a taxpayer fails to abide by the deadline, he or she has to pay a penalty. 

ITR-2 Form

The income tax department has categorised taxpayers based on income, source of income and many other factors to ensure easy compliance. Taxpayers with incomes from different categories, thus, have to download and fill out different income tax return forms.

For instance, the ITR-2 form is for individuals and HUFs not carrying any profession or business.

Who is eligible to file ITR-2 for AY 2022-23?

ITR-2 form is for individuals and HUF receiving income other than income from ‘Profits and Gains from Business or Profession. Thus, individuals with income from the following sources are eligible to file Form ITR-2:

Income from salary/pension  
Income from house property (income can be from more than one house property)  
Income from capital gains/loss on sale of investments/property (both short-term and long-term)  
Income from other sources (including winning from lottery, bets on racehorses and other legal means of gambling)  
Foreign Income  
Agricultural income of more than Rs 5,000  
Resident not ordinarily resident and a non-resident  
The total income from the above sources may exceed Rs 50 lakh.

Further, if you are a Director of any company and an individual invested in unlisted equity shares of a company, you must file returns in ITR-2.

Who cannot file ITR-2 for AY 2022-23?

1. Any individual or HUF having income from business or profession  
2. Individuals who are eligible to fill out the ITR-1 form (Sahaj)

Documents required to file ITR 2
 

Copy of the previous year’s tax return  
Bank Statement  
TDS Certificate  
Savings Certificate/ Deductions  
Interest Statement that shows the interest that is paid throughout the year.  
Balance sheet, P & I, Account Statement, and other Audit reports wherever they are applicable.

Penalty for Late Filing Income Tax Return  
 

Taxpayers who do not file their income tax return on time are subject to penalties and charged interest on the late payment of income tax. Also, the penalty for late filing income tax returns on time has been increased recently. The penalty for late filing income tax return is now as follows:

Late Filing between 1st August and 31st December - Rs.5000      
Late Filing After 31st December - Rs.10,000      
Penalty if taxable income is less than Rs.5 lakhs - Rs.1000