Individual/HUF having all income of ITR 1 but >50L, more than 1 HP, Capital Gain, Foreign income but not having business profession income.
ITR-2 is an income tax return form that is applicable for individual taxpayers as well as Hindu Undivided Family (HUF) who are not engaged in any profession or business. Its applicability depends upon the category of the taxpayer and his/her source of income. Now that you know what ITR-2 is in income tax, here is its structure.
ITR-2 Structure
After assessing ITR-2 meaning, one must understand that the form consists of several components, namely the following:
Part A: It contains details of personal information and filing status
Part B: This component has two parts:
Part B-TI: It involves the computation of total income with respect to income chargeable to tax
Part B-TTI: This part involves computing the tax liability on total income
Furthermore, this form comprises a number of schedules, which are described below:
Schedule S: This section has details of income from salaries.
Schedule CG: It includes computing the income under the heading ‘Capital Gains’.
Schedule HP: A taxpayer must provide details of ‘Income from House Property’ in section HP.
Schedule OS: It calls for computing one’s income under the heading ‘Income from Other Sources.’
Schedule BFLA: This section holds a statement of income after setting off unabsorbed losses brought forward from preceding financial years.
Schedule CYLA: It has a statement of income after setting off losses in the current financial year.
Schedule 80G: This section has a statement of donations that are subject to deduction under Section 80G of the Income Tax Act.
Schedule CFL: It contains a statement of losses that will be carried forward to subsequent financial years.
Schedule VI-A: It is a statement of deductions from an individual’s total income as per schedule VI-A.
Schedule AMT: It includes computing one’s alternate minimum tax payable under Section 115JC of the Income Tax Act.
Schedule 80GGA: This section presents a statement of donations for rural development or scientific research.
Schedule AMTC: It includes the computation of an individual’s tax credit under Section 115JD.
Schedule SI: This section contains a statement of the income that is chargeable to taxation at special rates.
Schedule EI: It has details of exempt income, i.e., income that is not included in one’s total income.
Schedule SPI: It is a statement of income of a taxpayer’s spouse/minor child/son’s wife or any such person or association of persons, who are to be included in this individual’s income as per schedulesHP, CG, and OS.
Schedule TR: A taxpayer must furnish details of taxes paid outside India in schedule TR.
Schedule PTI: It contains details of income details from business trusts or investment funds as per Section 115UA, 115UB.
Schedule FSI: This presents a statement of income arising or accruing outside India.
Schedule AL: It indicates one’s assets and liabilities at the year-end. It is applicable only if the total income of a taxpayer exceeds ₹50,00,000.
Schedule FA: This section contains details of income from sources outside India as well as any foreign assets.
Schedule 5A: It presents a statement of apportionment of one’s income between spouses.
Schedule DI: This includes details of tax-saving investments, deposits, or payments entitled to deduction or exemption.
Now that you are familiar with the nitty-gritty of ITR-2, let’s find out if it is applicable for you.
Significant Changes in ITR-2 for AY 2022-2023
Listed below are the major changes in ITR-2 with respect to AY 22-23:
The taxpayer needs to provide additional disclosures under the Capital Gains Schedule. These disclosures pertain to the following:
Acquisition and transfer dates of building/land
Details of cost of improvement, year of improvement and indexed cost of improvement
Separate disclosures pertaining to cost and indexed cost of acquisition
If the property is located in a foreign country, then the country code and zip code
Taxpayers need to provide reports of interest accrued on Provident Fund upon which he would not be able to avail exemptions.
There is a provision of new schedule for reporting of deferred tax on ESOP. One has to disclose the following details:
Tax deferred in the ITR filed
Date of sale of the particular securities and the amount of payable tax on such sales
The amount of tax payable in the current assessment year
The date from which the assesse was no longer a part of the organization
The balance of the tax amount that would be carried over to the next assessment year
As per Section 89A, the assesee will receive relief from taxation of income from retirement benefits account that he has in a notified country. In the new ITR form, details of income from salary or Schedule S needs the following disclosures:
Income from the account of retirement benefits that is maintained in a notified country mentioned under Section 89A
Pensioners need to provide further classification of their nature of employment. The following options have been incorporated for pensioners:
Pensioners – CG
Pensioners – PSU
Pensioners – SC
Pensioners – Others
Schedule FA needs disclosure of foreign assets that one holds during a calendar year:
A resident taxpayer needs to disclose his foreign assets and all foreign income earned under Schedule FA in the new ITR forms.
Even if the taxpayer is the beneficial owner of a foreign asset or has any financial interest in a foreign entity, he needs to provide an adequate report in the ITR form.
Furthermore, the assessee needs to disclose the information if he holds foreign assets like foreign equity and debt interest in trusts that were created outside India. Additionally, information about Foreign Deposit Account, if applicable is required.
Significant changes in ITR-2 for AY 2020-21
ITR-2 underwent a number of significant changes for AY 2020-21, the most notable of which are highlighted below:
RNORs and NRIs have to compulsorily file ITR-2 even if their total income does not exceed ₹50,00,000. Thus, you may need to know how to file ITR-2 for NRI.
Individual taxpayers who owe more than one residential/house property will now have to file the ITR-2 form.
If an individual holds the position of director in a company or has unlisted equity investments, he/she must dis close the ‘Type of Company.’
A taxpayer who is liable to file ITR-2 must mandatorily disclose the following information:
Foreign travel expenses in excess of ₹2,00,000.
Cash deposits exceeding ₹1 crore in a current account.
Electricity expenses exceeding ₹2,00,000.
ITR-2 continues to be applicable to resident individuals with a total income of more than ₹50,00,000.
Schedule VI-A for tax deductions is amended. It now includes deductions under Section 80EEA and 80EEB.
That concludes our guide on ITR-2. You can now use this information to simplify the process of filing your income tax returns.
Documents Required to file ITR 2
A copy of last year's tax return
Bank Statement
TDS certificates
Savings certificates/Deductions
Interest statement showing interest paid to you throughout the year.
Balance Sheet, P&L Account Statement and other Audit Reports wherever applicable.
In case you earn from salary, you require Form 16 issued by your employer
In case you have earned interest from savings account or fixed deposit, and TDS was deducted, you require a TDS certificate
26 AS: - You will require Form 26AS for verification of TDS on your salary as well as their source of income.
HRA: - n case you are living in rented premises; you will require rent receipts for calculating HRA
In case you have capital gains in shares, you will need summary of profit or loss statement.
To calculate interest income, you will require bank passbook, Fixed Deposit Receipts (FDR)
In case you have incurred loss and wish to claim it, then you will need relevant documents to support it.
In case you wish to save tax under Section 80C/ 80G/ 80D or 80GG, then you will need relevant documents to support it.
15. In case you wish to claim any loss, you will require a copy of ITR-V
Who can file ITR-2
TR-2 form is for individuals and HUF receiving income other than income from ‘Profits and Gains from Business or Profession’. Thus, individuals with income from the following sources are eligible to file Form ITR-2:
Income from salary/pension
Income from house property (income can be from more than one house property)
Income from capital gains/loss on sale of investments/property (both short-term and long-term)
Income from other sources (including winning from lottery, bets on racehorses and other legal means of gambling)
Foreign income
Agricultural income of more than Rs 5,000
Resident not ordinarily resident and a non-resident
The total income from the above sources may exceed Rs 50 lakh.
Further, if you are a Director of any company and an individual invested in unlisted equity shares of a company, you must file returns in ITR-2.
Who cannot file ITR-2 for AY 2023-24
Any individual or HUF having income from business or profession
Individuals who are eligible to fill out the ITR-1 form (Sahaj)
