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Eligibility for Filing ITR-2 in AY 2021-22

Non-Eligibility for Filing ITR-2 in AY 2021-22

Filing of Form ITR-2

Modifications of ITR-2 in AY 2021-22

Modifications of ITR-2 in AY 2020-21

Modifications of ITR-2 in AY 2019-20

Final Word

Frequently Asked Questions

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How To File Income Tax Return-2?

27 January 2022

Income Tax

The Income Tax Act, 1961 classifies taxpayers based on earnings, income source and age to ensure hassle-free compliance. Taxpayers having different sources of earnings must download and file separate Income Tax Return forms. For example, Form ITR-2 is applicable to HUFs and individuals not earning any income from business or profession.

If you need to file ITR-2 form, keep reading this page!

Eligibility for Filing ITR-2 in AY 2021-22

HUF and individuals with income from the below-mentioned sources can file ITR-2 form:

Income received from pension/salary
House property income
Earnings from other sources (such as bets on horse racing, winning in lottery and any legal form of gambling)
Capital gains earned on the sale of property/investments (both long-term and short-term)
Foreign income/assets
Income from agriculture (above Rs. 5,000)
A non-resident and RNOR (Resident Not Ordinarily Resident)

Note that a company’s director and a person investing in a company’s unlisted equity shares will have to file ITR-2 form.

Also Read – How To File Income Tax Return Online?

Non-Eligibility for Filing ITR-2 in AY 2021-22

The following cannot file ITR-2:

Taxpayers who qualify to file ITR-1 form
Any HUF or individual who earn from profession or business

Structure of Form ITR-2

ITR-2 consists of the following divisions:

Basic information in Part A
Information of salary income in Schedule S
Details of house property income in Schedule HP
Calculation of earnings from capital gains in Schedule CG
Selling a unit of business trust/equity-based fund or a company’s equity share for which STT is charged under Schedule 112A
Non-residents selling a unit of business trust/equity-based fund or a company’s equity share for which STT is charged under Schedule 115AD(I)b(b)(iii)
Calculating earnings from other sources in Schedule OS
Income statement on setting off of present year’s loss in Schedule CYLA
An income statement after setting off of previous years’ unabsorbed losses in Schedule BFLA
Schedule CFL consists of a statement of losses that are to be carry-forwarded to the upcoming years
ITR-2 Schedule VIA includes deductions from earnings under Chapter VIA
Donations eligible for deductions u/s 80G in Schedule 80G
Donations for rural development or scientific research in Schedule 80GGA
Calculation of alternate minimum tax liability u/s 115JC in Schedule AMT
Tax credit calculation u/s 115JD in Schedule AMTC
Schedule SPI covers earnings arising to son’s wife/minor child/spouse or any other individual or association to be added under the taxpayer’s income (in Schedules 0S, CG and HP)
Income having tax implications at exceptional rates in Schedule SI
Information about exempt earnings in Schedule EI
Details about pass-through earnings from an investment fund or business trust u/s 115UB and 115UA in Schedule PTI
Earnings arising or accruing outside the country in Schedule FSI
Information about taxes charged outside India in Schedule TR
Foreign income/assets outside India in Schedule FA
Portuguese Civil Code governed income apportionment between spouses in Schedule 5A
Liability and assets at the end of a year (when total income is above Rs. 50,00,000) in Schedule AL
Payments and deposits for claiming exemptions and deductions or investments with tax benefits (during the extended tenure of April 20 – July 31 2020) in Schedule DI
Total income calculation in Part B-TI
Calculation of tax payable on income in Part B-TTI
Information concerning self-assessment tax and advance tax payments under Tax payments
Information to be provided in case a Tax Return Preparer has prepared the return

Also Read – How To Save Income Tax On Salary?

Filing of Form ITR-2

You may submit your Income Tax Return-2 form through offline or online mode.

Offline mode

Taxpayers who are aged 80 years and above can file ITR-2 offline.

You can file a return offline in the following ways:

By filing a physical paper form
By furnishing a return having bar-code

The tax department will provide you with an acknowledgement after you submit the physical return form.

Online Mode

You can file a return online in the following manner:

On filing ITR-2 form electronically with a digital signature
By electronic transmission of data and submission of the return verification in ITR-V form

You will receive an acknowledgement in your email id if you have submitted ITR-2 electronically with a digital signature.

You can also download the ITR-2 form from the Income Tax portal. After filling in the details, you can send it to Bangalore’s CPC office within 120 days of ITR e-filing.

Modifications of ITR-2 in AY 2021-22

If you want to file ITR-2 for AY 2021-22, go through the following points:

IT department updates ITR-2 form to let taxpayers choose between new and old tax regimes (Finance Act 2020 u/s 115BAC introduced the new regime). If you are paying taxes under the new regime, you will have to submit Form 10E before filing a return. Form 10E’s acknowledgement number will be required in ITR forms.
An employee can defer the deduction or payment of tax on a start-up’s ESOP as per Section 80-IAC. Such a case must be mentioned in Part B, Schedule TTI.
Finance Act transfers tax implications of dividends from an entity’s hands to an investor’s hands. It amended Sections 115BBDA, 115-R, 115-O, 10(35) and 10(34). schedule OS has a new row ensuring cost deductions such as interest from dividend. This schedule also adds taxable dividends for a business trust’s unitholders.
Taxpayers must furnish their dividend income’s quarterly break-up to compute interest u/s 234C.
The new ITR forms will showcase surcharge computed after and before marginal relief.
Previous forms covered investments made during the extended tenure (April 20 – July 31 2020) under Schedule DI. This case is removed now.
Section 50C examines the sale consideration’s value for building, land or both. If the stamp duty value is more than the sale consideration, then stamp duty’s value will be the consideration value except for a 5% difference. The tolerance limit has been increased to 10% for AY 2021-22.
If you file ITR-2 now, you will have to separately disclose your cash contributions (with date) as per Section 80GGA.
The IT Act introduces a new column in Schedules 115AD(1)(b)(iii) and 112A for mentioning the nature of instruments moved. The schedules specify information such as the COA, FMV and sale price of the instruments.

Modifications of ITR-2 in AY 2020-21

Non-residents and RNORs will have to file ITR-2 form even if the total income is less than Rs. 50,00,000.
An assessee must mention the amount which exceeds Rs. 1 crore in current accounts. He/she should also disclose expenses above Rs. 2,00,00 incurred while travelling abroad and expenses above Rs. 1,00,00 incurred on electricity.
Indian residents who are owners of more than 1 house must file ITR-2 form.
Filing of Income Tax Return-2 is compulsory for residents whose total income is above Rs. 50,00,000.
Taxpayers having incomes from professions or businesses cannot file ITR-2.
If a person is a company’s director or keeps unlisted equity shares, the company type needs to be specified.
If a taxpayer obtains long-term or short term gains after selling a building, land or both, information such as address, name, share of ownership, Aadhaar or PAN card details needs to be furnished.
A new schedule 112A for computing long-term gains from the sale of shares or a business trust’s unit (wherein STT is charged)
Taxpayers should mention other income sources.
Individuals must specify the deductions from other income sources.
The IT Act amended Schedule VI-A to include tax benefits from Sections 80EEB and 80EEA.
Taxpayers having investment funds or business trusts should give information about dividends and capital gains.
Deduction claims for expenses, payments or investments from April 1 2020 to July 31 2020
While mentioning bank account details, if an assessee chooses different accounts for refund credit, the tax department will select any one bank account for processing the transaction.

Modifications of ITR-2 in AY 2019-20

Non-residents and RNORs will have to file ITR-2 form since they cannot file ITR-1.
ITR-2 is applicable for HUF and individuals (except for earnings from profession and business).
The section of residential status has been classified into HUF and individuals. There are 3 options under the ‘individual’ category, namely non-resident, resident and RNOR. A taxpayer will have to mention the number of days he/she has resided in India.
For non-residents, the Finance Act requires the jurisdiction of residence in the preceding year (they must provide Taxpayer Identification Number under the specific jurisdiction).
If taxpayers are Indian citizens, they must specify the tenure of residing in India during the preceding year and the preceding four years.
If a representative taxpayer files ITR-2, his/her capacity has to be mentioned.
Details about investing in unlisted shares and their movements during the fiscal year
In case of salary income, you should provide the following details:

Salary u/s 17(1)
Perquisites u/s 17(2)
Profit instead of salary u/s 17(3)

If a person receives a salary from more than 1 employer, he/she needs to mention the above salary break-ups along with gross salary (for every employment).
The tax department will deduct the following from gross salary:

Deductions u/s 16
Allowance exemption u/s 10

For house property income:

If there is a tax deduction u/s 194-IB, the tenant’s PAN is compulsory
When there is a deduction u/s 194-I, the tenant’s TAN is compulsory

If a taxpayer obtains long-term/short term capital gains after selling a building, land or both, information such as address, name, share of ownership, PAN card details needs to be given. He/she needs to provide PAN if a purchaser mentions PAN in documents or for TDS u/s 194-IA.
Interest (pass-through earnings) will come under income from other sources
Details of accrued income or income receipt (quarterly) under other sources and earnings from games, races, crossword puzzles and lotteries (for computing interest u/s 234C).
Under the section of loss (set off and carried forward)─ classification of long-term and short-term gains (having special tax rates) and other sources of net earnings (having applicable tax rates)
Introduction of deductions u/s 80TTB for senior citizens
Bifurcation of Section 80G donations (eligible for deductions) into different payments modes
Information about contributions for development and scientific research u/s 80GGA (providing details such as eligible amount, payment mode, PAN, address and name)
Schedule AMT and schedule AMTC
Individuals who require to file ITR-2 form should note that in schedule SPI, ‘Head of income’ has replaced ‘Nature of income’.
Schedule SI adds incomes with special rates:

Long-term and short-term gains
Other incomes with special tax rates
Pass through income (usually capital gains)

For schedule EI, the IT Act requires the following information if agricultural income is above Rs. 5,00,000:

District name with pin code
Measure of land (expressed in acres)
Whether the land is owned or leased
Rain-fed or irrigated land
Separate disclosure for each land

Under schedule EI, details about income having no tax liability as per DTAA (provide information such as whether TRC is available, head of income, DTAA Article, country code and name, nature and amount of income)
Pass-through income with no tax implications
For schedule FA, a taxpayer needs to furnish the following details for the accounting period:

Foreign Depository Accounts (including interest if applicable)
Information of Foreign Custodial Accounts
Foreign Debt and Equity Interest
Annuity Contract or Cash Value Insurance Agreement outside India (including beneficial interest)

Schedule Part B-TTI introduces calculation of tax liability u/s 115JC
Schedule TDS giving details about gross income and nature of income in case of claiming of TDS credit

Final Word

Individuals who are about to file ITR-2 form must know that it is annexure-less. This means you need not submit any documents while filing the return. A taxpayer’s residential status and source of income determine the type of ITR form required in a financial year.

Frequently Asked Questions

What are some of the modifications of ITR-2 in AY 2018-19?

The tax department made the following changes in AY 2018-19:

ITR-2 is applicable for HUF and individuals (except for earnings from profession and business).
The field mentioning earnings from professions or businesses under Part B-TI has been eliminated.
The Finance Act also removed Schedule-BP and Schedule-IF.
In Schedule TDS, taxpayers can give details of TDS on rent as in Form 26QC. They will have to mention the tenant’s PAN details in case of rental property.

Who can file ITR-1 form?

ITR-1 is a 1-page form for taxpayers earning up to Rs. 50,00,000 from the below-mentioned sources:

Pension or salary income
Earnings from 1 house property (except for situations when a loss has been carried forward from preceding years)
Other sources of earnings (other than lottery and horse racing)

If taxpayers earn above Rs. 50 lakh, which forms should they choose?

When a taxpayer’s income exceeds Rs. 50 lakh, he/she should select the following:

ITR-2 for salaried employees
ITR-3 for earnings from profession and business
ITR-4 in case of presumptive income under Sections 44AE or 44AD

Which incomes are eligible for exemption u/s 10?

An individual should file ITR-2 form if his/her exempted earning is above Rs. 5,000. Section 10 of the IT Act offers exemptions for the following incomes:

Income from agriculture
Long-term gains on listed securities u/s 10(38)
Pension, leave encashment and gratuity
LIC maturity sum u/s 10(10D)

What is form ITR-3?

HUF and individuals having gains and profits from profession and business can file ITR-3 form. The sources of income can be as follows:

Conducting a profession or business for both non-audit and audit cases
Returns can cover house property income, pension income, salary and income from other sources