Who can file income tax return using ITR-2 form?

Many salaried people usually file their income tax return (ITR) 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. This may be because you have income from capital gains, or from two house properties etc. In such a case, you might have to use the ITR-2 form to file your income tax return.

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.

Minor changes have been made in the ITR forms this year to incorporate the changes made in the income tax laws announced in the Budget.


Here is a look at who should use the ITR-2 form for filing ITR this year.

Who is eligible to file income tax return using ITR-2?
Dr Suresh Surana founder of RSM India - a business consultancy group provides the eligibility criteria for individuals to file ITR 2.

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) Holding a directorship 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 (including financial interest in any entity) 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 under section 194N was applicable to you for the certain cash withdrawals made during the FY 2022-23
k) If the income tax was deferred on Employee Stock Option plans received from employer being an eligible startup under section 80-IAC
l) If agricultural income is more than Rs 5,000
m) If you are claiming any treaty relief under the double taxation avoidance agreement
n) If you have capital gains from selling of virtual digital assets such as cryptocurrency, Non-fungible tokens (NFTs) etc.
o) Has signing authority in any account located outside India
p) Not having income under the head profits and gains of business and profession
q) Who does not have income in the nature of interest, salary, bonus commission, or remuneration, by whatever, name called due to or received by him/her from partnership firm.

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.