Income Tax Return-Form 2

Income Tax Return-2 Form

Income tax Department has categorized taxpayers on the basis of income, source of income and many other factors to ensure easy compliance. Taxpayers having incomes from different categories, thus, have to download and fill different Income Tax Return forms. For instance, the ITR-2 Form is for taxpaying persons and HUFs who do not earn from and independent profession or business.

When filing income tax returns, each category of persons, has a different form that must be used. The government has issued ITR 2 form for individuals and HUF’s who derive income from other sources, including their salary or pension. The previously used ITR 2A has been removed and now only ITR 2 form only exists, to be used by individuals meeting the requirements outlined in this guide.

• Given that ITR-1 is not applicable for the RNORs and the non-residents, they have to necessarily go with ITR-2 for filing their return of income
• The applicability of ITR-2 has been made more clear in as much as now it is applicable for individuals and HUF having income other than income under the head “Profits and Gains from Business or Profession”
• The field of “Profits and Gains from Business or Profession” which was earlier featuring under Part B – TI has now been removed.
• Following this, Schedule-IF (Income from Firm) and Schedule-BP have also been removed. This now means, anyone earning income from a partnership firm, now has to file ITR-3 and not ITR -2
• Additionally, under Schedule AL, the field pertaining to “Interest held in the assets of a firm or association of persons (AOP) as a partner or member thereof”  has been done away with
• Similar to ITR -1, even in ITR-2, under the Schedule on TDS, there is also an additional field for furnishing details of TDS as per Form 26QC for TDS made on rent. Also, provision for quoting of PAN of Tenant for such rent cases has also been made

Who is eligible to file ITR 2 for AY 2018-19?

ITR Form 2 is for Individuals and HUF receiving income other than income from “Profits and Gains from Business or Profession”. Thus persons having income from following sources are eligible to file Form ITR 2:

• Salary/pension
• House property from one or more
• Capital Gains/Loss on sale of investments/property (both short-term and long-term)
• Other sources (lottery, gambling and other legal channels)
• Being a partner in the firm (earlier there was separate ITR form 3 for this, the ITD has discontinued that form and merged into ITR 2)
• Foreign Assets/Foreign Income
• Dividend income exceeding Rs 10 lakhs taxable u/s 115BBDA
• Unexplained credit or unexplained investment taxable at 60% u/s 68, 69, 69A, etc.
• Share of profit of partner from a partnership firm
• Agricultural income exceeding Rs 5,000

When to file ITR Form 2

ITR-2 form is to be used when the assessee has income that falls into the below category:

1. Accrued income through the sale of assets or property (Capital Gains)
2. Income from more than one housing property
3. Income from countries outside of India
4. Income as a partner in any firm (not proprietorship)
5. Income from agriculture above Rs 5,000
6. Income from any windfall such as lotteries or horse racing
7. Income from Salary/Pension, Housing Property, Other sources that exceeds Rs. 50 Lakhs

What is the Structure of ITR 2?

ITR-2 is divided into:

• Part A: General Information
• Part B-TI: Computation of Total Income
• Part B-TTI: Computation of tax liability on total income
• Details to be filled if the return has been prepared by a Tax Return Preparer
• 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 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 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
• 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 income exceeds Rs 50 lakhs)

Who can use ITR Form 2?

ITR-2 must be filed by individuals and HUFs who are not eligible to file ITR-1 Sahaj form, because of following reasons:

1. Income exceeding Rs. 50 Lakhs
2. Having foreign assets / income
3. Having agricultural income which is more than Rs. 5,000,
4. Having taxable capital gains
5. Having income from business or profession as a partner
6. Having more than one house property

How to file ITR 2?

You can submit your ITR-2 Form either online or offline.

Offline:

Only following persons can file their ITR offline:

• Individual who are of the age 80 years or above.
• Individual whose income is less than Rs 5 lakhs per year and who do not have to claim refund in the return.

Return can be filed offline by:

• By furnishing a return in a physical paper form
• By furnishing a bar-coded return

The Income Tax Department will issue you an acknowledgment at the time of submission of your physical paper return.

Online/Electronically:

• By furnishing the return electronically under digital signature
• By transmitting the data electronically and then submitting the verification of the return in Return Form ITR-V

If you submit your ITR-2 Form electronically under digital signature, the acknowledgment will be sent to your registered email id. You can also choose to download it manually from the income tax website. You are then required to sign it and send it to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing.

Remember that ITR-2 is an annexure-less form i.e. you do not have to attach any documents when you send it.

How do I fill out my ITR-2 Form?

Here are a few general guidelines to keep in mind while filling your ITR-2 form:

• If any schedule is not applicable to you, strike it out and write —NA— across it
• If any item is not applicable to you, write NA against it
• Indicate nil figures by “Nil”
• Put a “-” sign before negative figures
• All figures are to be rounded off to the nearest one rupee except figures for total income/loss and tax payable. Those are to be rounded off to the nearest multiple of ten.
• If you are an individual, under the Employer Category you should tick Government if you are a Central/State Government employee. You should tick PSU if you work in a public sector company of the Central/State Government.

The ITR-2 Form can also not be used if you are claiming double taxation relief under Section 90/90A/91.

Who cannot file ITR 2 for AY 2018-19?

• Any individual or HUF having income from Business or Profession
• Individuals who are eligible to fill out the ITR-1 Form

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