ITR 2 Form Filing

When filing a return with the Indian Income Tax Department, both Indian citizens and NRIs must use the ITR 2 Form, which is a crucial form for income tax returns. Taxpayers who are not qualified to file ITR 1 may nevertheless do so in order to submit their income tax returns. Individuals and Hindu Undivided Families may file an ITR 2 if their income for the fiscal year came from a variety of sources, including wages, pensions, multiple properties, capital gains, foreign assets, business income, income from a partnership, winning the lottery, owning racehorses, and legal gambling.

Also, an individual who is not eligible to file using ITR 1 as the income is exceeding Rs.50 Lakh can file ITR 2 Form.

Who can file Form ITR-2?

ITR form 2 can be filed by individuals and the HUF who are not eligible to file form ITR-1 receiving income from the “profits and gains from business or profession”. Thus persons having come from the following sources are eligible to file Form ITR 2:

• Income from Salary/Pension
• Income from House property ( can be from more than one house property)
• Income from Capital gains
• Income from other sources (Lottery, bets on horses, and other gambling)
• Foreign Assets/Foreign Income
• Agricultural income more than Rs.5000
• A resident is not an ordinary resident and an NRI.
• Also, a director of any company and an individual who is invested in unlisted equity shares of a company should file their returns in ITR-2

Who is not eligible to file Form ITR-2?

• Any individual or Hindu Undivided Family with income that is fully or partially earned from the business or profession.
• Individuals that are eligible to file ITR 1 Form.
• Individuals who are partners in a Partnership Firm.

Documents required to file ITR 2

What documents are required to file ITR 2 returns?

1. Copy of the previous year’s tax return
2. Bank Statement
3. TDS Certificate
4. Savings Certificate/ Deductions
5. Interest Statement that shows the interest that is paid throughout the year.
6. Balance sheet, P & I, Account Statement, and other Audit reports wherever they are applicable.

How to file Form ITR 2?

The ITR 2 Form can be filed with the Income Tax Department either online or offline:

1. Either by furnishing the return in a paper for. When paper returns are made at the time of submission of the paper returns an acknowledgment is issued by the Income Tax Department to the assessee.
2. By furnishing the return electronically using the Digital Signature. ITR 2 forms are submitted by the assessee electronically using the Digital Signature Certificate an acknowledgment is received to the registered Email Id.
3. It can also be done by transmitting the data in the return electronically under an electronic verification code.
4. It can be done by transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR V.
5. By furnishing a bar-coded return.

Instructions to be filed while Form ITR 2

The following instructions and guidelines need to be followed while filing ITR 2 form:

It is necessary to fill the form as per the following sequence:

Part A

All the schedules

Part B- TTI and Part B- TTI

Verification.

If the schedule does not apply to the assessee it should be struck out and it is necessary to mention NA ( Not Applicable)

The assessee must mention NA against any item that does not apply to him or her.

All the figures are to be rounded off to the nearest one rupee except the figures for total income/loss and the tax payable which is to be rounded off to the nearest multiple of ten.

Individuals that fall under the employer category should Choose Government if he or she is a Central or a state government employee.

The individuals who are working in the Public Sector Company should choose the "PSU"

ITR Form 2 cannot be used if the assessee is claiming double taxation relief under Section 90/90A/91.

ITR 2 is an annexure less form. No documents are required to be attached while submission.

Structure of ITR 2 Form

ITR-2 is divided into:

Part A: General Information

Schedule S: Details of income from salaries

Schedule HP: Details of income from House Property

Schedule CG: Computation of income under Capital gains

Schedule OS: Computation of income under Income from other sources

Schedule CYLA: Statement of income after set off of current year’s losses

Schedule BFLA: Statement of income after set off of unabsorbed loss brought forward from earlier years

Schedule CFL: Statement of losses to be carried forward to future years

Schedule VIA: Statement of deductions (from total income) under Chapter VIA

Schedule 80G: Statement of donations entitled for deduction under section 80G

Schedule 80GGA: Statement of donations for scientific research or rural development

Schedule AMT: Computation of Alternate Minimum Tax payable under section 115JC

Schedule AMTC: Computation of tax credit under section 115JD

Schedule SPI: Statement of income arising to spouse/ minor child/ son's wife or any other person or association of persons to be included in the income of the assessee in Schedules-HP, CG, and OS

Schedule SI: Statement of income which is chargeable to tax at special rates

Schedule EI: Details of Exempt Income

Schedule PTI: Pass-through income details from business trust or investment fund as per Section 115UA, 115UB

Schedule FSI: Statement of income accruing or arising outside India.

Schedule TR: Details of Taxes paid outside India

Schedule FA: Details of Foreign Assets and income from any source outside India

Schedule 5A: Statement of apportionment of income between spouses governed by Portuguese Civil Code

Schedule AL: Asset and liability at the year-end (applicable in case the total income exceeds Rs 50 lakhs)

Schedule DI: Schedule of tax-saving investments or deposits or payments to claim deduction or exemption in the extended period from 1 April 2020 until 30 June 2020

Part B-TI: Computation of Total Income

Part B-TTI: Computation of tax liability on total income

Details to be filled in if the return has been prepared by a Tax Return Preparer.

Major changes were made to the ITR 2 Form for the AY 2021-22.

The Changes that are incorporated in the ITR 3 Form are:

The 2020 ITR Forms are modified to contain the declaration of choosing between the old and new tax regimes in accordance with Section 115BAC of the Finance Act. Additionally, Form 10 E must be provided if the assessee is paying taxes under the new tax regime.

The Finance Act of 2020 permits postponing the payment or deduction of tax on ESOPs from a qualifying startup covered under section 80-IAC. The Schedule TTI's Part B asks for information of this deferred tax.

Since the Finance Act of 2020, the investor is now responsible for paying taxes on the company's dividend income. Modifications are made to Sections 10(34), 10(35), 115-O, and 115 BBDA. For the purpose of deducting expenses from dividend income, such as interest, a new row is added to schedule OS. To include information on dividend income that is subject to taxation in the hands of business trust unitholders, one more new row is included under Schedule OS.

When calculating interest under Section 234C, it is important to provide a breakdown of dividend income per quarter.

By displaying the surcharge calculated both before and after the marginal alleviation, one must take into account the marginal impact of the latter. No such requirement existed in the past.

The value of the purchase price for either the structure or the land is taken into account under Section 50 C. If the selling consideration is less than the amount due in stamp duty, the difference of 5% between the two amounts is deducted from the stamp duty amount and it is then regarded to represent the entire value of the consideration. In addition to the ITR adjustments, the tolerance level has been raised from 5% to 10%.

A separate disclosure of a monetary donation together with the date must be made in the ITR Form in accordance with schedule 80 GGA.

In accordance with Scheule 112A and 115 AD (1)(b)(iii), a new column on the ITR 2 form is added that contains information on the type of securities that are transferred. Both schedules have also been modified in order to give the grandfathering clause effect by permitting the mention of information such as the Sale price, FMV, and COA of the securities.