ITR 2 Form – Complete Guide
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ITR 2 Form – Complete Guide

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ITR 2 Form – Complete Guide

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 and different forms are applicable to individuals as per their status and salary. 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?

In order to file income tax in India, an assessee must fill and submit various forms, depending on the type of category in which the assessee fits. The ITR-2 form is one such form that must be completed as part of the tax filing procedure. ITR 2 Form is filed by individuals and Hindu Undivided Families (HUFs) who are not engaged in any business or profession. Both Indian nationals and non-resident Indians can use it to file tax returns with the IT Department.

If you intend to file your income tax returns, you must submit the ITR-2 form. It is not available to partners in Partnership Firms, HUFs, or individuals who are qualified and eligible for the ITR 1 form.

What is the structure of the ITR 2 Form?

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

What are the components of the ITR-2 Form?

The ITR-2 Form has 22 components:

1. Part A

This section enquires about general information.

2. Part B-TI

This section provides information on the computation of the total income.

3. Part B-TTI

This provides information regarding the tax liability on total income.

4. Schedule S

This includes income details from your salary.

5. Schedule HP

This includes income details from house property.

6.Schedule CG

This includes capital gains related income computation.

7. Schedule OS

This includes income computation from other sources.

8. Schedule CYLA

Income information post set-off of current year losses.

9. Schedule BFLA

Income information post set-off of brought forward losses of the year prior.

10.Schedule CFL

Losses that will be carried forward into the future.

11. Schedule VIA

This covers the exemptions/deductions under section VI-A.

12. Schedule 80G

This includes the details regarding the donations that are eligible for deduction under Section 80G.

13. Schedule SPI

This includes details about the income of specified persons like minors, spouses, etc.

14. Schedule SI

This has information on tax chargeable income under special rates.

15. Schedule EI

This includes details on Exempt income.

16. Schedule IT

This has the statement of tax on self-assessment and advance tax payments.

17. Schedule TDS1

This includes TDS or tax deducted at source on the salary.

18. Schedule TDS2

This includes the tax deducted at source on income other than salary.

19. Schedule FSI

Information on tax relief or income from outside India.

20. Schedule TR

This has the summary of tax relief claimed for taxes paid outside India.

21. Schedule FA

This section includes information on foreign assets and any source outside India.

22. Schedule 5A

This includes details on income apportionment between spouses as per the Portuguese Civil Code.

Who can file ITR 2 Form?

The form is for those individuals and HUFs who receive earnings apart from the income from ‘Profits and Gains from Business or Profession’. Hence, those 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

Who cannot file ITR 2 Form?

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 2022-23?

  • Taxpayers eligible for ITR-1.
  • Taxpayers eligible for ITR-1.

Documents required to file ITR 2 Form

Here is a list of documents that you need to have while filling the ITR 2 Form:

  • 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 to file ITR 2 Form?

A taxpayer can file the ITR 2 Form either offline or online.

How to file ITR 2 offline?

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 on paper or through a bar-coded form. The Income Tax Department will give you an acknowledgement slip when you submit the return.

How to file ITR 2 online?

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 acknowledgement on your email ID. Also, it is possible to download the form manually, sign it, 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 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.

Methods of filing the ITR 2 Form

You can fill out 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.

Modifications in ITR 2 for assessment year AY 2021-22

  • 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 the 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.

Major changes in Form ITR 2 for AY 2021-22

  • Residents but Not Ordinarily Residents (RNORs) and non-residents have to use ITR Form 2 to file their income tax returns.
  • 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.

FAQs

1. What is an ITR 2 Form?

In order to file income tax in India, an assessee must fill and submit various forms, depending on the type of category in which the assessee fits. The ITR-2 form is one such form.

2. What is the structure of the ITR 2 Form?

ITR 2 Form has two parts, that is, Part A and Part B. While Part A contains general information, Part B comprises the computation of total income and the tax payable on the total earnings.

3. Can ITR 2 Form be filled online?

Yes, ITR 2 Form can be filled in both online and offline mode.

4. Who is not eligible to file ITR 2 Form?

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

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