Come July and the salaried class is expected to file their Income Tax Returns (ITR) without fail. The most earning individuals will have to use the ITR-1 form to file a return, while others have to use ITR-2

What is the difference between ITR-1 and ITR-2?

When you need to fill out the ITR-1 form:

1.   If you are an Individual.
2.   If you have an income from Salary / Pension.
3.   If you have income from 1 House Property.
4.   If you earn any Exempt Income (like agricultural income) Up to Rs.5, 000.
5.   If you have income from Other Sources (excluding income from lotteries, racehorses, gambling, etc.)

When you need to fill out the ITR-2 form:

1.   If you are an Individual or a HUF.
2.   If you have an income from Salary / Pension.
3.   If you earn income from more than one Property.
4.   If you have any brought forward losses.
5.   If you earn an income from Other Sources (including income from lotteries, racehorses, gambling, etc.)
6.   If you’ve earned an income through Capital Gains.

To file an ITR-1 form or ITR -2 form, you need the following documents

•   A copy of the previous year’s tax return.
•   A bank statement.
•   Your Tax Deducted at Source (TDS) certificates.
•   Your Savings Certificates / Deductions.
•   An Interest statement that shows the interest paid to you.
•   Balance sheets, Profit & Loss account statements, and other requisite Audit Reports, wherever applicable.
•   If you are living in a rented house, you need the documents of the rent paid for every month.
•   If you want to claim the loss in your business or anything you need proper bills and document which shows the loss.
•   You require form 16 from your company
•   Also 26AS to show TDS certificate which can be downloaded from e-Filing website.

Also Read: Financial Performance For The Quarter Ended June 30, 2022