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ITR 2

itr 2

The ITR2 should be applied as per the category of the source of income and the taxpayer to ensure easy compliance. As a matter of fact, the ITR 2 can be filed only by HUFs and individuals who do not generate any earnings from profession or business. One can visit an e-filing portal to file ITR2 online or just by filling an excel utility. This article is presented to make you know about the facts of the ITR 2 form and its further process. If you want to know more about it, you can keep on reading.  

What is ITR 2?

ITR 2 means Income Tax Return form which is used by non-resident Indians and Indian citizens to submit their tax returns with the Income Tax Department of India. It is an assessee who needs to fill up the different forms as per the category of the assessee that falls under. If we talk about the ITR-2 form, it is a form that needs to be filled and submitted during the process of tax filing. 

Who can file ITR 2?

The registered taxpayers who are HUFs and individuals can file ITR2 but they should gain income during the assessment year which is as follows. 

  • Earnings from house property (income more than Rs. 50 lakhs)
  • Pension or salary income (income more than Rs. 50 lakhs)
  • Earnings from other sources (comprising any earnings generating from racehorses or winning the lottery – income more than Rs. 50 lakhs)
  • A taxpayer who is a director in a company
  • A taxpayer who earned any foreign income or owns any foreign asset.
  • Agricultural earnings that exceed Rs. 5000
  • Registered taxpayer possessing an investment in unlisted equity shares during the financial year.
  • Earnings from capital gains

Major Changes in ITR 2 in 2021-2022

Check out the new changes made in ITR 2 in the assessment year 2021-2022 which are as follows:

  • One of the major changes in ITR forms is to involve a declaration of selecting among new or old tax regimes presented by Finance Act 2020 under section 115BAC. Before submitting ITR, form 10IE should be submitted to the department of ITR if the assessee prefers to pay tax as per the new tax regime. 
  • As per Finance Act 2020, a shift of dividend income taxability has been made from the hands of the company to the investor. Sections 115BBDA, 115-R, 115-O, 10 (35), 10 (34) have been amended. Moreover, a new row has been included in Schedule OS to enable deduction of expenses such as interest from the dividend income and one more row is to accumulate data of dividend income taxable in the trustable unitholder’s hands. 
  • Deduction of tax on ESOPs assigned by an eligible startup appeared under Section 80-IAC has been allowed by Finance Act 2020. The Part B of Schedule TTI allows the disclosure of the deferred tax if the above condition is applied. 
  • As per Section 50C, if the consideration of sale is lower than the value of stamp duty, then it would be regarded as the full value of consideration except for a 5% difference. The tolerance limit has been increased from 5% to 10% by Finance 2020 and reflected the changes in the ITR. 
  • A new column has been added under schedule 112A and 115AD (1)(b)(iii) proviso to offer the information of the transferred nature of securities. In addition, both the schedules have been given ‘grandfathering clause’ effect by letting to add the data like FMV, Sale price, and COA of the securities. 
  • The ITR forms have been added with the effect of marginal relief by exhibiting ‘after marginal relief’ as well as ‘surcharge calculated ‘before marginal relief’. 
  • Separate cash donation disclosure is needed under schedule 80GGA along with the date in the ITR form.
  • Every ITR form brings about the return filers to render a quarterly breakup of income of dividend for interest calculation under section 234C.
  • Any investment made for the extended period of 1st April 2020 to 31st July 2020 under Schedule DI in the old ITR forms has now been removed from all the ITR forms. 

How to file ITR 2?

Below is given certain steps to file ITR 2 via the online portal:

Step 1: Visit the e-filing portal and log in using your user ID and password

Step 2: Once you get into the dashboard, press e-File, click Tax Returns, and then File Income Tax Return. Choose Assessment Year as 2021-22 and press Continue. You have to choose Mode of Filing as Online and then hit Proceed. Choose Status as per the requirement and press Continue to move ahead further.

Step 3: At this point, you have to choose any of the two options of Income Tax Return:

  • If you are unsure about filing ITR, you can choose to Help me to determine which ITR form to submit and hit Proceed. Once you know about the eight ITR, you can go ahead with issuing your ITR. 
  • If you are sure about filing the right ITR, you can choose I know which ITR form I need to file. Then choose the applicable ITR from the dropdown list and press Proceed with ITR.

Step 4: Note the list of essential documents and hit Let’s Get Started.

Step 5: Tick the applicable checkboxes and hit Continue.

Step 6: You can check your pre-filled details and edit them if required. Fill in the remaining details if necessary. Press Confirm at the end of every section. 

Step 7: Provide your deduction as well as income data in a separate section. After you confirm each and every section, hit Proceed. Again, there would be two options at this point which you have to choose as per your condition.

  • You will get the options of Pay Now and Pay Later at the end of the page if there is tax liability payable based on the computation.
  • Once you pay the tax, you can click Preview Return and if there is a refund or no tax liability payable based on tax computation, you will be redirected to the Preview and Submit Your Return page.

Step 8: You have to enter a location, choose the declaration checkbox, and hit Proceed to Validation. Press Proceed to Verification once validated.

Step 9: Once you land on the Complete your Verification page, choose your applicable option and hit Continue.

Step 10: Once you get into the e-verify page, you can choose your preferred option for return e-verification and press Continue. 

Difference between ITR 1 and ITR 2 

Check out distinguish between ITR1 and ITR 2 forms given below in a tabular format


FORM

ITR 1

ITR 2

Earnings from Property

A person gets income from only one house property.

A person generates income from more than one house property.

Earnings from Other Sources

An individual does not earn from other sources like gambling, lottery, etc.

An individual earns from other sources like gambling, lottery, and so on.

Losses from Property

A person faces losses from other income sources.

A person has brought forward the losses under earnings from other sources.

Tax-free Income

A person gets a tax-free income such as agricultural income that is less than Rs. 5000

A person gets a tax-free income such as agricultural income that is more than Rs. 5000

FAQs on ITR 2

1. What changes have been made in ITR 2 as compared to previous years?

In ITR2 of the financial year 2021-22, you can opt for the new tax regime as per section 115BAC. However, it should be noted that this option would only be available till the last date of the ITR 2 filing.

2. What earnings are payable taxes under the head Capital Gains?

Any gain or profit that is generating from a capital asset transfer during the AY year is payable taxes under the head Capital Gains.

3. Can I claim a rebate u/s 87A if I am a non-resident?

Not possible as rebate u/s 87A is accessible only to a person who is living in India. 

4. Can anyone claim rebate u/s 87A other than an individual (HUF/Firm)?

No. Only an individual can access a rebate under section 87A. Therefore, HUF/Firm cannot claim rebate u/s 87A. 

5. How to download an ITR copy?

There are several steps to have a copy of ITR 2 download from the online portal which are as follows:

Step 1: Visit the Income Tax India portal and log in using valid credentials.

Step 2: Choose the ‘View Returns/Forms’ option to view e-filed tax returns

Step 3: Press the acknowledgement number to download your ITR 2.

Step 4: Choose ‘ITR 2/Acknowledgement’ to start the download. 

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