Different Uses of ITR-1, ITR-2A and ITR-2

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.

Income Tax Return-1

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.

Income Tax Return-2

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

Income Tax Return-2A

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.

ITR-2A and ITR-2

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.

FORMITR-1ITR-2
Income from Other SourcesUnder Form ITR-1, the individual is not earning an income from through activities like the lottery, gambling etc.On the other hand, in ITR-2, the individual earns through activities like a lottery, gambling etc.
Income from PropertyThe individual earns from 1 house property only.The individual earns from more than 1 house property.
Tax-Free Income such as Agricultural IncomeThe individual earns a tax-free income like agricultural income that is below INR 5,000The individual earns a tax-free income like agricultural income that is above INR 5,000
Losses From PropertyThe individual has reported losses under Income from other sourcesThe individual has brought forward the losses under Income from other sources

Frequently Asked Questions

When I file my ITR do I need to attach any documents?

Though it is not mandatory to attach any documents when filing your ITR, but it is highly recommended that you must keep all the income related documents safe and handy, as the tax authorities may ask you to present them for assessment.

Can the ITR be filed online?

To file the ITR online you can visit the official web portal of the Income Tax Department www.incometaxindiaefiling.gov.in. This facility is available for all the citizens free of charge.

My income is INR 55 lakhs a year, I need to file ITR-1 or ITR-2?

As your income is INR 55 lakhs a year, depending on the course of your income, you can file ITR-2 or even ITR-3. In case you are salaried then you can file ITR-2, if you are an entrepreneur then file ITR-3.

For an individual what are the different types of ITR forms?

There are 9 Income Tax Forms that a taxpayer can use and file his returns: ITR-1, ITR-2, ITR-3, ITR-4, etc.

What is Sahaj Form?

ITR-1 is also called Sahaj form. The form is filed exclusively by a single taxpayer.

What are capital gains?

Capital gains are 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.

I recently won an INR 5 lakh lottery, which ITR Form do I need to fill?

Under ITR-2, an individual earns through activities like a lottery, gambling etc., therefore you need to fill ITR-2 form.

I have a small house in Singapore, from which I receive monthly rent, can I file ITR-1?

No, if the individual has a property in any other country, he is not eligible for ITR-1, you can file ITR-2.

On the basis of property, what is the difference between ITR1 and ITR2?

Under ITR-1 the individual earns from 1 house property only whereas under ITR-2 the individual earns from more than 1 house property.

My exempted agricultural income is INR 18,000, which ITR Form do I need to fill?

You will fill ITR-2 as, when the individual earns a tax-free income that is below INR 5,000 such as agriculture income ITR-1 form is filled and if the individual earns a tax-free income, like agriculture, of more than INR 5,000 ITR-2 is filled.

Read More About Tax

Leave a rating!
4.5 (4 votes)