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ITR Form 2

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  • 28th Nov 2019
  • 7,056
ITR Form 2

The Income Tax Department has made it easier for taxpayers in India to file their annual returns and pay taxes. Taxpayers are categorized based on income. Different forms are applicable to individuals as per their status and income.

One such Income Tax Return (ITR) form is an ITR 2 Form. Explained ahead are the various aspects related to the form such as its meaning, eligibility, structure, and information on how to file ITR 2.

What is an ITR 2 form?

An ITR 2 Form is to be filed by individuals and Hindu Undivided Families (HUFs) who are not engaged in any business or profession.

What are the components of the ITR-2 Form?

The ITR-2 Form has 22 components:
1. Part A
2. Part B-TI
3. Part B-TTI
4. Schedule S
5. Schedule HP
6. Schedule CG
7. Schedule OS
8. Schedule CYLA
9. Schedule BFLA
10. Schedule CFL
11. Schedule VIA
12. Schedule 80G
13. Schedule SPI
14. Schedule SI
15. Schedule EI
16. Schedule IT
17. Schedule TDS1
18. Schedule TDS2
19. Schedule FSI
20. Schedule TR
21. Schedule FA
22. Schedule 5A

Modifications in ITR 2 for assessment year AY 2020-21

  • The option ‘Pensioner’ has been added under the ‘Nature of Employment’.
  • The deduction ‘Section 80TTB’ has been added under deductions.
  • Taxpayers have to show details of the shareholding of unlisted companies in case of purchase and sale of shares.
  • Taxpayers have to show agricultural income, including the district of the land and quality and measurement of the land.
  • Taxpayers with income from residential properties have to show the name of the tenant along with the PAN or TAN.

Who is eligible to file returns in ITR Form 2?

The form is for those individuals and HUFs who receive earnings apart from the income from ‘Profits and Gains from Business or Profession’. Hence, individuals who have income from the below-mentioned sources have to file ITR 2:

  • Salary
  • Pension
  • Income generated from house property
  • Foreign income/ foreign assets
  • Capital gains from property
  • Income from other sources
  • Loss on sale of investment
  • Resident who is not ordinarily resident as well as a non-resident
  • Agricultural income exceeding INR 5,000
  • Director in an unlisted and listed company

Major changes in Form ITR 2 for AY 2020-21

  • Residents But Not Ordinarily Residents (RNORs) and non-residents have to use ITR Form 2 to file their income tax return.
  • Residents who are owners of more than one house need to use ITR Form 2.
  • Residents with an income of over INR 50 lakhs need to use ITR Form 2.
  • Taxpayers earning their income from business or profession cannot use ITR Form 2.
  • Taxpayers who hold unlisted equity investments or are a director in a company need to disclose ‘type of company’ while filing ITR in ITR Form 2.
  • While using ITR Form 2, taxpayers need to disclose:
    - Cash deposits over INR 1 crore in a current bank account. - Expenditure over INR 2 lakhs on foreign travel. - Expenditure over INR 1 lakh on electricity.

Eligible taxpayers for filing ITR 2 online AY 2020-21

A resident having the following are eligible:

  • Assets outside India or signing authority in any account.
  • Agricultural income over INR 50,000.
  • Income from lottery, gambling, horse racing, etc.
  • Short and long term capital gains and losses from the sale of investments, property, security, etc.

A non-resident or RNOR can also use ITR 2

Who is ineligible to file form ITR 2?

Individuals or HUFs earning income through a business or a profession and those who are eligible to file ITR Form 1 cannot file their returns with ITR 2.

Who cannot file ITR 2 for AY 2020-21?

  • Taxpayers and HUF with income from business or profession.
  • Taxpayers eligible for ITR-1.

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The structure of the ITR 2 Form

ITR 2 Form is bifurcated into two parts; Part A contains general information and Part B comprises the computation of total income and the tax payable on the total earnings. Along with Part A and Part B, the form also includes various schedules details of income from salary, income from house property, income from capital gains, and income from other sources, among various other schedules.

Documents required to file ITR 2

  • Bank statements
  • Savings certificates
  • DS certificate
  • Previous year’s ITR
  • Interest statement of interest paid in the financial year
  • Balance sheet
  • Profit and loss statement
  • Audit reports, if applicable

How can a taxpayer file ITR 2?

A taxpayer can file ITR 2 either offline or online.

  • Offline filing procedure
  • Only taxpayers aged over 80 can file the ITR offline. In order to file an offline form, the taxpayer needs to furnish a return physically in paper or through a bar-coded form. The Income Tax Department will give you an acknowledgment when you submit the return.

  • Online filing procedure
  • You can file ITR 2 online with a digital signature or by transmitting the entire information electronically. Later, you can furnish the verification through the Return Form ITR-V.

    If you submit the form electronically by using a digital signature, you will receive the acknowledgment on your email ID. Also, it is possible to download the form manually, sign and post it to the Department’s Central Processing Centre (CPC) office within a period of four months of e-filing of the form. You need to keep in mind that you need not provide any
    additional documents with the ITR 2 Form, which means that it is an annexure-less form.

    As a diligent taxpayer, you need to calculate your tax liability and file your returns under ITR 2 if you fall into this category before the due date.

Instructions to fill out the ITR 2 Form

You can start filing ITR 2 in the following sequence:

  • Part A followed by all the other schedules
  • Part B-TI and Part B-TTI.
  • Mention N/A against the schedules that are not applicable.
  • After filling up the form, verify your return.

Manner of filing the ITR 2 Form

You can fill the form:

  • Physically by using the paper form.
  • Electronically by using a digital signature, return form ITR-v, or electronic verification code.
  • Using a bar-coded return.

FAQs

1. Major changes introduced in ITR 2 for AY 2019-20

  • Non-residents have to mention their country of residence.
  • Taxpayers who are directors in a company have to mention the name of the company, PAN, Director Identification Number (DIN), and information on the company’s shares.
  • In the case of foreign assets, details on foreign depository, equity, custodial accounts, and debt interest should be mentioned.

2. Major changes introduced in ITR 2 for AY 2018-19

  • ‘Profits and Gains from Business or Profession’ has been removed.
  • Schedule-IF and Schedule-BP have been removed.
  • ‘Interest held in the assets of a firm or AOP as a partner or member thereof’ has been removed.

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