If you are planning to file for you income tax returns, you will be required to fill out the ITR-2 form and submit it. A partner at a Partnership Firm, HUFs, and individuals who are eligible for the ITR 1 form are not eligible for this form.
The ITR-2 is a form used by Indian citizens as well as non-resident Indians to file their tax returns with the Income Tax Department of India. Filing Income Tax in India requires an assessee to fill up and submit different forms depending on the category the assessee falls under. The ITR-2 form is one type of form that is required to be filled during the tax filing process.
ITR 2 Form Eligibility
ITR-2 forms are used by individuals or Hindu Undivided Families whose total income for the assessment year includes:
- Income from Salary/Pension; or
- Income from House Property; or
- Income from Capital Gains; or
- Income from Other Sources (including Winnings from Lottery and Income from Race Horses)
- Foreign Assets
If the Income Tax Returns are clubbed with a spouse, minor child etc, then their returns can only be filed together if the sources of income are similar to the ones mentioned above. Should there be a variation in earnings in even one category, the Assessee is liable to fill up a separate and relevant Income Tax Returns Form.
Who is not eligible to file the ITR 2 Return?
- Any individual or Hindu Undivided Family with income fully or partially earned from a business or profession
- Individuals who are eligible to fill out the ITR-1 Form
- Individuals who are partners in a Partnership Firm
What are the Components of the ITR-2 Form?
The ITR-2 Form is divided into the following categories:
- Part A: General Information
- Part B-TI: Computation of Total Income
- Part B-TTI: Computation of tax liability on total income
- Schedule S: Details of income from salary
- Schedule HP: Details of income from house property
- Schedule CG:. Computation of income from capital gains.
- Schedule OS: Computation of income from other sources.
- Schedule CYLA: Details of Income after Set off of current year losses
- Schedule BFLA: Details of Income after Set off of Brought Forward Losses of earlier years
- Schedule CFL: Details of Losses to be carried forward to future years .
- Schedule VIA: Deductions under Chapter VI-A (Section)
- Schedule 80G: Details of donations entitled for deduction under section 80G
- Schedule SPI: Income of specified persons (spouse, minor child etc) includible in income of the assessee (income of the minor child, in excess of Rs. 1,500 per child, to be included)
- Schedule SI: Income chargeable to tax at special rates
- Schedule EI: Details of Exempt Income (Income not to be included in Total Income)
- Schedule IT: Statement of payment of advance-tax and tax on self-assessment.
- Schedule TDS1: Details of tax deducted at source on salary.
- Schedule TDS2: Statement of tax deducted at source on income other than salary.
- Schedule FSI: Details of Income from outside India and tax relief
- Schedule TR: Summary of tax relief claimed for taxes paid outside India
- Schedule FA: Details of Foreign Assets and Income from any source outside India
- Schedule 5A: Information regarding apportionment of income between spouses governed by Portuguese Civil Code
Instructions to fill out the ITR 2 Form
When filling up the ITR-2 Form it is advisable to make note of the following instructions and guidelines:
- Fill out the form as per the following sequence:
- Part A
- All the schedules
- Part B-TI and Part B-TTI
- Any schedules not applicable to the Assessee should be struck out with NA (Not applicable) mentioned
- The Assessee should mention NA against any item not applicable to him or her
- All figures are to be rounded off to the nearest one rupee except figures for total income/loss and tax payable, which are to be rounded off to the nearest multiple of ten.
- Individuals falling under the Employer Category you should choose ‘Government’ if he or she is a Central/State Government employee
- Individuals working in a public sector company of the Central/State Government should choose ‘PSU’
- If the Assessee is claiming double taxation relief under section 90/90A/91, the ITR-2 Form cannot be used
- ITR-2 is an annexure-less form. No documents are required to be attached to the form during submission
Manner of filing the ITR 2 Form
The ITR-2 Form can be filed with the Income-tax Department in any of the following ways:
- By furnishing the return in a paper form. At the time of submission of the paper returns the Income Tax Department will issue an acknowledgement to the assessee.
- By furnishing the return electronically under digital signature. ITR-2 Forms submitted by assessees electronically under digital signature will receive an acknowledgement to their registered email ID.
- By transmitting the data in the return electronically under electronic verification code
- By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V
- By furnishing a bar-coded return
It is mandatory to file Income Tax Returns electronically (either through Mode 3 or Mode 4) for the following:
- Assessees earning more than Rs 5 lakhs per annum
- Assessees in possession of any assets outside India (including financial interest in any entity) or signing authority in any account outside India
- Assessees claiming relief under Section 90/90A/91 to whom Schedule FSI and Schedule TR apply
Major changes in Form ITR 2 for AY 2020-21
The ITR form went through various changes for the financial year 2019-20. Hence, if you are looking to file your income tax in future, it is important to be aware of these changes. We will state the new changes in Form ITR2 for AY 2020-21.
- New details for ‘Schedule DI’ for producing information related to investments made during the extended period
- The President of India on 31 March, 2020 declared that the limits for investments, deposits, and payments for FY2019-20 will be intensified till July 20210 pretending deduction under chapter VI-A, section 10AA and sections 54 to 54GB in the ITR 2.
Modifications in ITR 2 For Assessment Year AY 2020-21
- Under the nature of employment, ‘pensioner’ section has been added.
- Under the deduction column, a new deduction of ‘Section 80TTB’ has been added.
- The taxpayer from this year will be required to furnish their directorship in Unlisted Company if any. The details needed to be produced will be the name of the company, PAN details, and DIN.
- The taxpayer will be required to produce details of shareholding of the unlisted company where the information regarding the shares purchased and sold will have to be furnished.
- It will now be easier for people aged 80 years and above to enjoy the facility of filing paper returns.
- If the taxpayer possesses foreign assets, then the details of it will have to furnished.
- Taxpayers who have agriculture income will have to furnish details including the name of the district in which the agriculture land is allocated, the measurement of the said land, and the quality of the land.
- Taxpayers who derive income from residential house properties will have to show details such as the name of the tenant, PAN or TAN number.
Documents Required to file ITR 2
- A copy of last year's tax return
- Bank Statement
- TDS certificates
- Savings certificates/Deductions
- Interest statement showing interest paid to you throughout the year.
- Balance Sheet, P&L Account Statement and other Audit Reports wherever applicable.