ITR-2 : Who can File ITR-2 | Who cannot file | How to file ITR?
Income Tax Return Form : ITR-2 is used by the Individual or a HUF for filing the statement of Income earned in a Financial Year under the Income Tax Act,1961. The due date for filing ITR-2 of AY 2020-21 is 30th November 2020.
Who are eligible to file ITR-2 for AY 2020-21?
Form ITR-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-
- Income from-
- House Property (Income Can be from more than one house property)
- Capital Gains/loss on sale of investments/ property (Both Short Term and Long Term)
- Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling)
- Foreign Assets/Foreign Income
- Agricultural Income more than Rs 5000
- Resident not ordinarily resident and a Non-resident
- A Director of any company
- An individual who is invested in unlisted equity shares of a company
Thus, it can be filed by Individual or HUF having Income more than Rs. 50 lakh from Salary or Pension, House Property, Capital Gains, Other Sources, Agriculture Income exceeding Rs. 5000 or Director of any company or Resident and not Ordinary Resident/Non Resident or any Individual who has invested in unlisted equity shares of a company.
Who cannot File ITR-2?
This return form should not be used by any person-
- who are eligible to file ITR-1, or
- have income from Profit or Gain from Business or Profession (PGBP).
What are the Steps to File ITR-2?
The user can file the Income Tax Return (ITR) in two ways:
- Offline through Excel Utility or Java Utility
- Online directly at e-filling portal
However, Only ITR-1 and ITR-4 can be filed online directly from e-filing Income Tax Website. ITR-2 is required to file through offline mode.
Offline through Excel Utility or Java Utility
Step-1: Go to Income tax efiling website
Step-2: Download the Appropriate ITR utility under ‘Downloads > IT Return Preparation Software’.
Step-3: Extract the downloaded utility ZIP file and Open the Utility from the extracted folder.
Step-4: Fill the ITR form, validate all tabs and calculate tax.
Step-5: Generate and save the XML.
Step-6: Next step is to either register yourself, if new to e-filing or if you are registered user then you can login in the portal. For login, enter user id which is nothing but your PAN number, password and captcha.
Step-7: Select e-file tab and click on Income tax Return link. Then Select A.Y., ITR-2 form, filling type which is Original or Revised and submission mode i.e. prepare and submit online or through xml file.
Step-8: Choose documents such as Digital signature certificate, Aadhar OTP, etc. to verify Income tax return.
Step-9: Click Continue and attach ITR XML file.
Step-10: On choosing a valid option in step-8, attach or enter the respective option details.
Step-11: Submit ITR.
Details Required in Income Tax Return Form 2
Part-A General Information
Part A of ITR-2 require details such as PAN, Name, Date of Birth, Aadhar number, Nature of employment, Return filed in response to notice then some details related to that has to be provided.
Further, a new check point has been inserted to cross confirm the applicability of seventh proviso to section 139(1) i.e.
- Details of Electricity bills of over Rs. 1 lakh in a year
- Deposit of Rs. 1 crore in bank account
- Expense of Rs. 2 lakh on foreign travel, etc.
In case of Individuals/HUF, Residential status has to be provided such as Resident/Resident but not ordinary resident/Non Resident. In case of Non Resident details of Jurisdiction of residence has to be provided. Further, it requires details of representative assesse such as name, capacity, address and PAN if return has been filed by such person.Also, if person is a director in a company then details such as Name of Company, Type of Company, PAN, etc has to be provided.
- If any person has held unlisted equity shares at any time during the year even if not holding at the year end, then details with respect to number of shares, name of company, cost of acquisition, shares transferred during the year, etc. shall be provided in ITR-2.
- Schedule-S is for Details of Income from Salary. Here, details of Salary income is filed from Part-B of form 16. Before inserting such details, assesse has to confirm that tax deducted on salary shown in 26AS (now New AIS) shall match with that in form 16. Details of salary required in ITR has to fill as such form Part-B in Form 16.
- Schedule-HP is for details of Income from House Property. Here, income is calculated from House property with other details such as Address of property, town, state, self-occupied or let-out, percentage of share in property if in partnership, etc.
- Schedule-CG is for Capital Gains.This schedule is divided into 2 sections with respect to Short term and Long term Capital gains which is further bifurcated into following categories.
1. Short term Capital Gain
- Capital Gain from Sale of Land/Building/Both.
- Gain from sale of Equity shares, units of equity oriented mutual fund or unit of a business trust on which STT is paid.
- Capital Gain from Sale of Shares or Debentures of an Indian company in case of Non Resident except FII i.e. Financial Institutional Investors.
- Capital Gain from Sale of Securities in case FII i.e. Financial Institutional Investors.
- Capital Gain from Sale of Asset other than above.
2. Long term Capital Gain
Capital Gain from sale of-
- Bonds/Debentures (other than Capital Indexed Bonds).
- listed securities or Zero Coupon bonds and GDR of Indian Company.
- Equity shares, units of equity oriented mutual fund or unit of a business trust on which STT is paid.
- Shares or Debentures of an Indian company in case of Non Resident.
- Unlisted securities, Bonds/GDR or Securities by FII.
- Equity shares, units of equity oriented mutual fund or unit of a business trust on which STT is paid in case of Non Resident.
- Foreign Exchange asset by Non Resident Indian.
- Other Assets not mentioned above.
It further requires details to be provided of current year Capital Gain, short term/ long term Capital losses and Net amount of Gain after deducting Losses. Also information has to be provided for accrual/receipt of Capital Gain quarterly under various tax rates applicable for Capital Gain.Also, the last date for claiming capital gain exemption for F.Y. 2019-2020 stand extended to 30th September, 2020.
- Schedule-OS is for Income from Other Source like Interest, Dividend, Unexplained Money/Investment/Expenditure, Race horse, etc.
- Schedule-CYLA provides Income after Set off of Current year Losses under various heads of Income.
- Schedule-BFLA provides details of brought forward losses of Earlier Years under various heads of Income.
- Schedule-CFL provides details of Losses to be carried forward to Future years.
- Schedule-VI-A provides details of various deductions like expense based and Income based.It requires Details of Investment to be provided allowing taxpayers to make certain tax saving investments from 1st March 2020 to 31st July 2020.
- Schedule-AMT & AMTC shows the amount of tax payable as per AMT i.e. Alternate Minimum Tax and AMT credit.
- Schedule-SPI & SP is for Income of specified person includible in assesse Income and Income chargeable to tax at special rates respectively.
- Further details has to be provided such as details of Exempt income in Schedule- EI, Pass through Income from business trust or Investment fund in Schedule-PTI, Income from Outside India and Tax relief in Schedule-FSI, Tax relief claimed for taxes paid outside India, details of Foreign assets or income from any source outside India, details of asset and liabilities at year end if Total income exceeds Rs. 50 lakhs.
Part-B: Total Income
In Part B of ITR-2, all Incomes get accumulated and Total taxable Income after all deductions is calculated and tax liability is computed on Total Income. It also provides details of taxes paid like Advance tax, TDS/TCS, Self-Assessment tax,
Further, details of Bank accounts are to be provided for claiming any refund. However, now we have option to choose more than one bank account to claim refund as against option to choose only one bank account earlier. However, in case of details provided of more than one bank account then refund will be credited to such bank account as decided by the CPC.
Finally, Assessee has to verify the ITR-2 with sign and date and if return has been prepared by TRP then details of TRP is also to be provided.
- Read Also: Depreciation Rates for AY 2020-21 : New rates – Section 32
- Tax on Pension : Income from Pension and Family pension in India
- Gift – Tax Liability – Income Tax on Gift in India
For any questions, you may reach us at Discussion Forum
The author of above article is CA Rahul Gaur.
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