Different Uses of ITR-1, ITR-2A & ITR-2 in 2022| Coverfox (2024)

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As a responsible and law-abiding citizen, it is the duty of all Indians to file their Income Tax. Not just to receive the Income Tax Returns but also to inform the Income Tax Department about their earnings and the taxability. As per the Income Tax Act, 1961, every citizen of the country should file the IT return at the end of the financial year. Filing the ITR might not be mandatory for every individual who earns but it surely has its own advantages.

As per the CBDT, Central Board of Direct Taxes, there are 9 Income Tax Forms that a taxpayer can use and file his returns such as:

• ITR-1
• ITR-2A
• ITR-2
• ITR-3
• ITR-4

Each of these forms are applicable to a certain type of assesse. Let us try and understand the different uses of ITR-1, ITR-2A and ITR-2.

• Salary: Salary is the fixed amount of payment that you receive on a regular basis. The income that remains after the exemptions is called the Gross Salary. The pension received also comes under the head of Income from Salary.

• House Property: Irrespective of being residential or commercial, a property under your name will be taxed as per the value or the tenurial of the property. On the total value of the tax, there are certain exemptions.

• Gains or Profits: When you make a profit by either selling a product or by rendering service through your business, the income is charged on the basis of the certain value. This value is achieved after subtracting all the expenses that have been incurred from the income that has been received.

• Capital Gains: The profits that arise from the sale of assets like property, precious metals like gold and silver, equities etc. that have been held as an investment come under this taxable heading. It should be kept in mind that only the profit made is taxable.

• Other Sources: Apart from the sources mentioned above, income from other sources like FD interest, lottery, game show winnings, horse-racing, betting, gambling, gifts from non-relatives. They have specific due dates on which these needs deposited accordingly with the IT Department.

In this article, we will discuss the different uses of ITR-1, ITR-2A and ITR-2. It has to be remembered that it is basically the different sources of income that make the different uses of ITR-1, ITR-2A and ITR-2.

The ITR-1 form is also called Sahaj form, ‘Sahaj’ meaning ‘Simple’. The form is filed exclusively by a single taxpayer. An individual becomes eligible for filing ITR-1 in the following conditions:

• If the individual is a salaried employee and not a businessman or an entrepreneur
• If the individual receives a pension
• If the individual earns from 1 house property
• If the individual earns a tax-free income that is below INR 5,000 such as agriculture income
• If the individual is not earning an income from other countries
• If the individual has no property in any other country
• If the individual is earning an income from investments in FD or shares.
• If the individual is not earning an income through activities like the lottery, gambling etc.
• If the individual is earning an income from taxable capital gains
• If the individual’s Total income does not exceed Rs.50 lakhs.

This form is for individuals who have built up an income through the sale of property or an asset or those who are earning from other countries. ITR-2 form is to be filled by an individual or by a HUF, Hindu Undivided Family, in the following conditions:

• If the individual is a salaried employee
• If the individual receives a pension
• If the individual earns from more than 1 house property
• If the individual earns a tax-free income, like agriculture, of more than INR 5,000
• If the individual has property/assets in any other country
• If the individual earns through activities like a lottery, gambling etc.
• If the individual is not earning an income from other countries
• If the individual earns through taxable capital gains

There is no need to fill ITR-2 when you are/have any of the following:

• If the individual is an entrepreneur or HUF with income from a business or an occupation
• If the individual is eligible under ITR-1 Form

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This was a new ITR Form which has been discontinued from FY 2016-17 (AY 2017-18) is for the use of an individual or by a HUF. ITR-2A form is to be filled by an individual or by a HUF, Hindu Undivided Family, in the following conditions:

• If the individual is a salaried employee
• If the individual receives a pension
• If the individual earns from more than 1 house property
• If the individual has no other income from a business or from the sale of an asset
• If the individual is earning an income from more investments in FD or shares etc.
• If the individual is not earning an income from other countries
• If the individual earns a tax-free income, like agriculture, that is less than INR 5,000
• If the individual is not earning an income through activities like the lottery, gambling etc.

Now that we have seen different uses of ITR-1, ITR-2A and ITR-2, let us take a look at ITR-2 and ITR-2A. If we compare ITR-2A and ITR-2, we will realize that ITR-2 is a more comprehensive form. In simple words, if you are using the ITR-2A you can, on the other hand, can use ITR-2 form too. The primary difference between the two is that we cannot use ITR-2A form in cases where the individual has earned an income from Capital Gains.

Difference between ITR1 and ITR2

The difference between ITR-1 and ITR-2 will be clearer now as we have seen the different uses of ITR-1, ITR-2A and ITR-2.