Key takeaways
- Filing an Income Tax Return (ITR) is a crucial task for every individual who earns a taxable income.
- 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.
- 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.
- ITR-2 form is bifurcated into two parts, that is, Part A and Part B.
- The ITR-2 Form has 22 components.
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 apply 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?
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. The ITR-2 form is filed by individuals and Hindu Undivided Families (HUFs) who are not engaged in any business or profession. 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.
ITR-2 form Eligibility
ITR-2 form is applicable to individuals and HUFs who have income from the following sources:
Salary/Pension
This includes income from salary, allowances, pension, etc.
House Property
Income earned from house property, such as rent received from tenants, is also included in this form.
Capital Gains
This includes income earned from the sale of assets such as property, stocks, mutual funds, and gold.
Other Sources
Income from other sources, such as interest earned from a savings bank account, fixed deposits, winnings from lotteries, horse races, etc., is also included in this form.
Foreign Assets
If an individual or HUF has assets outside India, such as foreign bank accounts or immovable property, then they are required to file ITR-2 form.
However, ITR-2 form cannot be used by individuals and HUFs who have income from business or profession is required to file ITR 3 Form.
It is important to note that individuals and HUFs whose total income for the financial year is above ₹50 lakhs are required to disclose their assets and liabilities in the ITR-2 form.
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.
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.
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 advances 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 income apportionment between spouses per the Portuguese Civil Code.
Instructions to Fill Out the ITR-2 form
The Income Tax Return (ITR) 2 form is used by individuals and Hindu Undivided Families (HUFs) who have income from various sources, including salary, house property, capital gains, and other sources. If you are required to file an ITR-2 form, you must know the instructions on how to fill out the form. In this article, we will provide you with a step-by-step guide to help you fill out the ITR-2 form.
Step 1: Download the ITR-2 form
The first step is to download the ITR-2 form from the official website of the Income Tax Department or from the e-filing website of the department. You can download the form in PDF format and take a printout.
Step 2: Fill Out Personal Information
The next step is to fill out your personal information, such as your name, address, PAN (Permanent Account Number), and Aadhaar number. If you do not have an Aadhaar number, you can leave this section blank.
Step 3: Fill Out Income Details
In this section, you need to provide details of your income from various sources, such as salary, house property, capital gains, and other sources. You need to provide accurate information, as any mistakes can lead to penalties or legal action. You also need to provide details of any tax deducted at source (TDS) from your income.
Step 4: Fill Out Details of Tax Payments
In this section, you need to provide details of any tax payments you have made during the financial year. This includes advance tax, self-assessment tax, and any tax paid on regular assessment.
Step 5: Fill Out Details of Tax Deducted at Source (TDS)
In this section, you need to provide details of any TDS deducted from your income, such as TDS on salary, TDS on interest income, TDS on rent, etc. You need to provide accurate information, as any discrepancies can lead to penalties or legal action.
Step 6: Fill Out Details of Foreign Assets and Income
If you have any foreign assets or income, you need to provide details in this section. This includes details of foreign bank accounts, foreign investments, foreign properties, etc.
Step 7: Fill Out Bank Account Details
In this section, you need to provide details of your bank account, including the bank name, account number, and IFSC code. You also need to provide details of any other bank accounts you have.
Step 8: Calculate Your Tax Liability
Once you have provided all the necessary details, you need to calculate your tax liability for the financial year. You can use the income tax calculator on the Income Tax Department’s website to calculate your tax liability.
Step 9: Verify and Submit the Form
After calculating your tax liability, you need to verify and submit the ITR-2 form. You can verify the form online using any of the following methods:
- Aadhaar OTP
- Net banking
- Bank account
- Demat account
- EVC (Electronic Verification Code)
Methods of filing the ITR-2 form
Filing an Income Tax Return (ITR) is a crucial task for every individual who earns a taxable income. ITR-2 form is one of the forms that can be used to file the return. This form is applicable for individuals and Hindu Undivided Families (HUFs) who have income from more than one source other than the income from their salary.
Offline Method
The offline method of filing the ITR-2 form involves the submission of the physical copy of the form to the Income Tax Department. Here are the steps to file ITR-2 form offline:
Step 1: Download the ITR-2 form from the official website of the Income Tax Department.
Step 2: Fill in the required details in the form.
Step 3: Take a printout of the form and sign it.
Step 4: Submit the physical copy of the form at the nearest Income Tax Department office.
Online Method
The online method of filing the ITR-2 form is a quick and convenient way to file the return. Here are the steps to file ITR-2 form online:
Step 1: Go to the Income Tax Department’s e-filing website.
Step 2: Register yourself by providing the necessary details such as PAN, name, and date of birth.
Step 3: Once you have registered, log in to the portal using your credentials.
Step 4: Select the ITR-2 form and fill in the required details.
Step 5: Verify the details entered in the form and click on ‘Submit’.
Step 6: After submission, the system will generate an acknowledgement, which should be downloaded and saved for future reference.
E-Verification
E-Verification is the process of electronically verifying the ITR-2 form after it has been filed. Here are the methods of e-verification:
a) Aadhaar OTP Verification
If your Aadhaar is linked to your PAN, you can use the Aadhaar OTP method to verify the ITR-2 form. An OTP will be sent to your registered mobile number, which you can enter to complete the verification.
b) Net Banking Verification
You can use the net banking facility of your bank to verify the ITR-2 form. Log in to your net banking account and select the option to e-verify your ITR. Follow the instructions to complete the verification.
c) Demat Account Verification
If you have a demat account, you can use it to verify the ITR-2 form. Log in to your demat account and select the option to e-verify your ITR. Follow the instructions to complete the verification.
Major changes in Form ITR 2 for AY 2023-24
The Income Tax Return (ITR) form is an important document that taxpayers in India need to fill out and submit every year to the Income Tax Department. The ITR form contains information about the taxpayer’s income, tax liabilities, and tax payments. For the assessment year 2023-24, the Central Board of Direct Taxes (CBDT) has made some major changes in Form ITR 2.
Form ITR 2 is applicable to individuals and Hindu Undivided Families (HUFs) who have income from salary, house property, capital gains, and other sources. The following are the major changes in Form ITR 2 for AY 2023-24:
New Schedule DI
Schedule DI has been added to Form ITR 2, which requires taxpayers to disclose their investments in government securities, notified bonds, and deposits with banks or post offices. This schedule has been added to enable the tax department to verify the taxpayers’ claims of tax exemptions and deductions.
Separate Schedule for Salary Income
The salary income schedule has been separated from the schedule for other sources of income. This change has been made to make it easier for taxpayers to report their salary income separately from their other sources of income.
New Schedule for TDS on Cash Withdrawals
A new schedule has been added to Form ITR 2 for taxpayers who have made cash withdrawals of ₹1 crore or more during the financial year. Taxpayers need to report the TDS deducted on such cash withdrawals in this schedule.
Changes in Capital Gains Schedule
The capital gains schedule in Form ITR 2 has been revised to include separate columns for long-term and short-term capital gains. Taxpayers need to report their gains or losses separately in these columns.
New Schedule for Foreign Assets and Income
A new schedule has been added to Form ITR 2 for taxpayers who have foreign assets or income. Taxpayers need to provide details of their foreign assets and income in this schedule, including the country where the asset is located, its value, and the income earned from it.
Changes in Schedule for Income from Business or Profession
The schedule for income from business or profession has been revised to include separate columns for income from specified professions and income from other businesses or professions.
Changes in Schedule for Deductions and Taxable Income
The schedule for deductions and taxable income has been revised to include separate columns for the standard deduction, deduction under sections 80C, 80D, and other deductions. Taxpayers need to report their taxable income after claiming all the deductions in this schedule.
Documents Required to File ITR-2 form
The ITR-2 Form is a crucial document for taxpayers who have income from various sources, including capital gains and foreign assets. Filing an ITR-2 Form requires gathering several documents and information related to your income, deductions, and investments. In this article, we will discuss the documents required to file an 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
Final Thoughts
The ITR-2 form is an important document required by the Income Tax Department of India. It is used to report income from various sources, including salary, pension, capital gains, and more. This form must be filled out accurately and submitted by the deadline to avoid penalties and other legal consequences.
As discussed in this complete guide, it is essential to understand the eligibility criteria for filing ITR-2, the various sections of the form, and the documents required to fill it. Additionally, taxpayers should be aware of the changes and updates to the ITR-2 form as announced by the Income Tax Department from time to time.
FAQs
1. What is an ITR-2 form?
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 the ITR-2 form be Filled Out 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.
5. Is a Balance Sheet Necessary For ITR 2 Filing?
Individuals and HUFs engaged in any type of business or profession must provide a balance sheet detailing their assets and liabilities. Taxpayers submitting ITR-2, including those with income over ₹50 lakh, are required to provide the schedule AL.
6. Who Cannot Use ITR 2?
ITR-2 cannot be used by any individual taxpayer who earns money from a business or profession. The “kind of company” should also be declared if a person holds unlisted equity investments or serves as a director for a firm.
7. Is Audit Compulsory for ITR 2?
If a taxpayer’s sales, turnover, or gross receipts for the entire fiscal year surpass ₹1 crore, a tax audit must be conducted. In several additional situations, a taxpayer could need to have their accounts audited.
8. What Happens if I Don’t File ITR 2?
An individual may incur a fine of up to ₹10,000 if they forget to file their ITRs. In addition, a stop or delay in completing your income tax returns subjects you to interest charges on the taxable amount you owe the government.
