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ITR-2 Return Registration

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ITR-2 Return Registration in India

Filing income tax returns (ITR) is a crucial annual obligation for taxpayers in India. The ITR-2 form specifically caters to individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession.

What is the ITR-2 Form?

The ITR-2 form serves as the income tax return document for individuals and Hindu Undivided Families (HUFs) in India who derive income from sources other than business or profession. It is specifically designed for taxpayers with earnings from salaries, multiple house properties, capital gains, interest income, and foreign assets or income. This form excludes those with income from business or professional activities, who must instead use forms like ITR-3 or ITR-4. When filing ITR-2, taxpayers need to provide comprehensive details of their income, deductions claimed under relevant sections of the Income Tax Act, and information about tax payments made during the financial year.

Who Should File ITR 2?

ITR 2 should be filed by individuals and HUFs who have:

  • Income from salary or pension.
  • Income from house property (more than one house property).
  • Income from capital gains (short-term and long-term).
  • Income from other sources (including lottery winnings and income from racehorses).
  • Foreign income/assets or who have signing authority in any account located outside India.
  • Agricultural income exceeding ₹5,000.
  • No income from business or profession

Key Features of ITR 2

  • Multiple Sources of Income: Suitable for those with varied sources of income such as salary, house property, capital gains, and other sources.
  • Foreign Assets/Income: Must be filed by individuals having foreign assets or income.
  • Detailing of Capital Gains: Requires detailed reporting of capital gains from various sources, including the sale of property, shares, and other investments.
  • No Business Income: Not applicable for those with income from business or profession.

Structure of ITR 2

The form is structured into various parts and schedules that capture comprehensive details of the taxpayer's income and deductions. Some of the important parts include:

  • Part A: General information.
  • Part B: Total income and tax computation.
  • Schedules: Various schedules to capture details of income, deductions, capital gains, and tax payments

Key Components of ITR-2

  • Personal Information: Name, address, PAN, Aadhaar, and contact details.
  • Income Details
  • Salary/Pension: Details of income received, allowances, and deductions under section 16.
  • House Property: Income from house property, details of interest paid on home loans
  • Capital Gains: Short-term and long-term capital gains from the sale of assets like property, stocks, etc.
  • Other Sources: Interest income, family pension, etc.
  • Deductions: Deductions under various sections like 80C, 80D, 80G, etc.
  • Tax Calculation: Computation of taxable income and tax liability after deductions and exemptions
  • Verification: Declaration by the taxpayer confirming the accuracy of the information provided.

How to File ITR-2 Form:

Filing the ITR-2 form involves the following steps:

  • Gather Documents: Collect all necessary documents including Form 16, Form 26AS, bank statements, and investment proofs.
  • Download the Form: Download the latest ITR-2 form from the Income Tax Department's e-filing portal.
  • Fill in Details: Fill in all required details accurately in the form. Use supporting schedules for detailed income computations.
  • Compute Tax Liability: Compute your total income and tax liability using the information provided.
  • Verify and Submit: Verify all details entered in the form, calculate tax payable/refundable, and submit the form electronically.
  • Acknowledgment: After successful submission, download and retain the acknowledgment receipt (ITR-V) for verification.
  • Verification: Verify the ITR-V by sending a signed copy to the Centralized Processing Centre (CPC) within 120 days of e-filing, if not e-verified.

Important Points to Note

  • Due Date: Typically July 31st of the assessment year (AY) for which the return is being filed.
  • Penalties: Late filing may attract penalties under section 234F.
  • Verification: A signed physical copy of ITR-V may need to be sent to CPC Bangalore if not e-verified.

Benefits of Choosing Filing Lounge for ITR-2 Return Filing

Choosing Filing Lounge for ITR-2 return filing can be advantageous for several reasons:

Expertise and Experience:

Filing Lounge specializes in tax filing services, offering expertise in handling various types of tax returns, including ITR-2. They are likely to be well-versed with the intricacies and updates in tax laws.

Convenience:

They provide an online platform that simplifies the entire tax filing process. This can save you time and effort compared to traditional offline methods.

Accuracy:

Filing Lounge aims to ensure accuracy in tax filings, reducing the chances of errors that could lead to penalties or delays in processing your return.

Support

They may offer customer support to help you with any queries or issues related to your tax filing, guiding you through the process step-by-step.

Compliance

They are likely to stay updated with the latest tax regulations and ensure your tax return complies with current laws, helping you avoid compliance-related issues.

Security

They may provide a secure platform for uploading sensitive financial information, ensuring your data is protected.

Additional Services:

Apart from ITR-2 filing, they might offer related services such as tax planning advice, investment declarations, and handling tax notices, providing comprehensive support for your tax needs.

Related Guides

Documents Required For ITR-2

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition A sole proprietorship is an unregistered business entity managed by a single individual. A legal contract between multiple parties to jointly manage and run a business operation. A business type that combines aspects of a partnership and the limited liability of a corporation. A registered business where owners and shareholders have limited liability.
Ownership
  • Single individual
  • Min 2 Partners
  • Max 50 Partners
  • Designated Partners: Min 2(No upper limit)
  • Min: 1 shareholder (for a private company), 7 shareholders (for a public company)
  • Max: 200 shareholders (for a private company), no upper limit (for a public company)
For One Person Company
  • Minimum: 1 individual
  • Maximum: 1 individual
Registration Time 7-10 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • Partnership Deed
  • PAN card of the partnership firm
  • LLP Agreement
  • Incorporation Certificate
  • PAN card of the LLP
  • MOA
  • AOA
  • Certificate of incorporation
  • PAN card of the company
Governance No specific governing law Governed by the terms outlined in the partnership deed Governed by the LLP agreement Governed by a formal structure including a Board of Directors
Transferability Business cannot be transferred Ownership transfer requires the consent of all partners as outlined in the partnership deed. Transferable Easily Transferable for public companies. In private companies, there might be some restrictions.
Compliance Requirements
  • Income tax filing if the turnover exceeds Rs. 2.5 lakhs.
  • Must file ITR 5
  • Must file ITR 5
  • File Form 11
  • Form 8
  • MCA filing
  • Auditor's appointment
  • File ITR 6

ITR-2 FAQ's

What is the registration process of a company?

The registration process of a company is done under the Ministry of Corporate Affairs (MCA) in accordance with the Companies Act 2013.
  • Step 1: Apply For Director Identification Number (DIN)
  • Step 2: Apply For ITR-2 Certificate (DSC)
  • Step 3: Company Name Approval
  • Step 4: Company Incorporation Application Submission
  • Step 5: Get a Certificate of Incorporation

How much does it cost to register a company?

The cost of registering a company in India varies according to the number of stakeholders and size. The Cost of Incorporation of a ITR-2 would vary from Rs.6, 000 - to Rs. 30,000/- depending upon the following:
  • Number of Directors
  • Number of Members
  • Authorized share capital
  • Professional fees

What are the types of registration?

Company registration is mandatory in India to start any business, so fixing the business structures is crucial. In India, there are seven different types of company registration:
  • Sole Proprietorship Registration
  • One-person Company Registration
  • Partnerships Firm Registration 
  • Limited Liability Partnership (LLP) Company Registration
  • ITR-2 Return Registration
  • Public Limited Company Registration
  • Section 8 Company Registration
 

Can NRIs or foreign national or foreign entities register a company in India?

Yes, NRIs, foreign nationals, and foreign entities can register a company and invest in India, subject to the Foreign Direct Investment norms set by the RBI. However, incorporation rules in India require for one Indian national to mandatorily be a part of the company on the Board of Directors.

How do I check the availability of names for my company?

You can use the FilingLounge company name availability search tab to search for available names in India. It is important to note that FilingLounge would just provide available choices, based on identical names already registered.

Is GST registration mandatory at this stage?

GST registration is mandatory for certain businesses. Companies dealing with e-commerce operations or any other interstate activity and companies with turnover of more than Rs. 40 Lakhs are required to obtain the same. GST registration takes just 3-5 working days with FilingLounge.

What are the compliances of a ITR-2?

A company is required to maintain certain compliances once it is incorporated. An auditor needs to be appointed within 30 days and income tax filing and annual return filing need to be done every year. Apart from these, mandatory compliances like ‘Commencement of Business’ forms, and DIN eKYC also need to be done.

When is the statutory auditor to be appointed?

The Board of Directors is required to appoint a practicing Chartered Accountant within 30 days of Incorporating a ITR-2.

Which Form is to be filed for the ITR filing of ITR-2?

The Private Limited Companies that are registered in India have to file the ITR returns each year in Form ITR 6.

Which form is to be filed for filing the annual returns of a Company?

The companies registered in India are required to file the MCA annual return each year informs AOC 4 and MGT 7.

How many members are required to start a ITR-2?

Minimum 2 number of members are required to start a ITR-2 which can be extended to 200 members.

How can ownership be transferred?

The ownership of a ITR-2 can be transferred by the way of shares.

How are the Companies taxed? What are the tax rates?

Private Limited Companies are taxed at 30% plus the surcharge and cess as applicable.

Who governs and controls the functioning of a ITR-2?

The MCA and Companies Act,2013 controls the functioning of a ITR-2.

What are the benefits of registering a ITR-2?

There are various of registering as a ITR-2 like Limited Liability, Access to funding, borrowing capacity, greater capacity, easy exit, and scope of multiple opportunities.

What is authorized capital and paid-up capital?

Authorized capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid up capital is the amount of shares issued by the company to shareholders. Authorized capital can be increased any time after incorporation to issue additional shares to the shareholders.

What is limited liability protection?

Limited liability is the status of being legally responsible only for a limited amount of debts of a company. Unlike proprietorships and partnerships, the liability of the shareholders with respect to the company’s liabilities is limited.

How do I open a current account?

Once the company is incorporated, a current account needs to be opened in the name of the company for transactions. Your advisor will guide you through the process of choosing the bank that you want to open the account with and get the documents like certificate of incorporation, Memorandum and Articles of Association, board resolution, copy of PAN allotment letter, and utility bill.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

FSSAI Registration
IE Code
Trademark Registration
Copyright Registration
Salaried Tax-filing
GST Return Filing

MCA Compliance

Each registered entity is required to meet its compliance duties at the close of each financial year. This generally includes auditing financial statements, filing income tax returns, and submitting annual forms to the Ministry of Corporate Affairs (MCA).

Compliance For Form Due date Penalty
Commencement of Business Intimation to Registrar for Commencement of Business Within 180 days from incorporation INR 50,000 on company and INR 1,000 per day on directors for each day of default
Annual KYC of Directors DIR 3 E-KYC 30th September of every year INR 5,000 for late filing
Appointment of Auditor Form ADT 1 Within 15 days of the AGM INR 300 per day (max INR 12,000)
Financial Statements Form AOC 4 Within 30 days from the AGM INR 100 per day of default
Annual Return Form MGT 7 Within 60 days from the AGM INR 100 per day of default

All Limited Liability Partnerships (LLP) in India must file annual returns with the Ministry of Corporate Affairs (MCA). FilingLounge provides affordable services to help you keep your LLP compliant.

LLP Compliance Form Due date Penalty
Annual KYC of Directors DIR 3 KYC 30th September of every year INR 5,000 for late filing
Annual Return Form 11 May 30th every year INR 100 per day of default
Statements of Accounts and Solvency Form 8 30th October every year INR 100 per day of default (minimum penalty INR 10,000)

In addition to the filings listed above, there may be other compliance requirements relevant to LLPs. To ensure all compliance needs of your LLP are met, please seek assistance from a Filinglounge Advisor.

Entity Compliance Form Due date
Private Limited Company Annual Return MGT-7 Within 60 days from the conclusion of the AGM
Financial Statements AOC-4 Within 30 days from the conclusion of the AGM
DIR-3 KYC DIR-3 KYC 30th September every year
Return of Deposits DPT-3 30th June every year
Appointment of Auditor ADT-1 Within 15 days from the conclusion of the AGM
Income Tax Return (Non-audit case) ITR-6 31st July every year
Income Tax Return (Audit case) ITR-6 30th September every year
Annual GST Return GSTR-9 31st December of the subsequent financial year
MSME Form Form 1 (MCA) half-yearly return by 31st October (April to September), & 30th April for the period October to March every year
Limited Liability Partnership Income Tax Return (Non-audit case) ITR 5 31st July every year
Income Tax Return (Audit case) ITR 5 30th September every year
Annual Return Form 11 30th May every year
Financial Statements Form-8 30th October every year

Note : There might be extra filings needed depending on your business type and activities. Talk to a FilingLounge advisor to get the right guidance for your company's compliance.