Overview of ITR-2 Return Filing Online in India

The applicability of ITR 2 is determined by the taxpayer's category and the source of income. HUFs and individuals who do not have any income from a business or profession are only eligible for ITR 2. ITR 2 can be filled by filling out an excel utility or preparing it online on an e-filing platform.

Senior citizens would be excluded from filing ITR 1 under the Union Budget 2021. Pension and interest income are the only sources of income for such senior citizen taxpayers. Section 194P was recently added to oblige banks to withhold tax from elderly citizens over 75 who receive a pension and interest income from the bank.

On June 7, 2021, the Internal Revenue Service released its new e-filing website. This new e-filing website will shortly replace the present portal. The new portal is user-friendly to make the entire e- filing process simple, quick, and painless. The new portal now offers the ITR-1 and ITR-4 (online and offline) and the ITR-2 (offline). For June 2021, the new IT portal will offer free ITR preparation software. Taxpayers will receive speedy income tax refunds if ITRs are processed quickly. All tax- related interactions will be represented on a single dashboard.

Who is qualified to file ITR 2 for the 2020-21 fiscal year?

Individuals and HUFs are both eligible to file ITR 2. During the financial year, such individuals and HUFs must have earned the following income:

Income from a salary or pension
Earnings from a residential property
Other sources of income (including any income arising from winning lottery or racehorses)
The following sources of income that bring in more than Rs 50 lakh in total:
Pension or Salary or
Residential property
Other sources of income
More than Rs 5000 is gained from agriculture.
If a taxpayer owns a foreign asset or earns overseas income, they are liable to pay taxes on it.
A taxpayer serves as a director of a corporation.
The assessee is an RNOR citizen, not ordinarily resident and non-resident
Gains on capital investments
During the fiscal year, a taxpayer has an investment in unlisted equity shares.

Furthermore, if the taxpayer's income is combined with that of another assessee, and that assessee's income comes under one of the following categories, the taxpayer must file an ITR-2. Another assessee could be the taxpayer's spouse, kid, or other relatives whose income is combined with the taxpayer's.

For the AY 2020-21, who is not required to file ITR 2?

ITR 2 does not apply to the taxpayer in the following circumstances:

Individual taxpayers and HUFs both have a source of income from a business or profession. Depending on other factors, the individual taxpayer or HUF will be required to file ITR 3 or ITR 5.
Individual taxpayers or HUFs eligible to file ITR 1 are not permitted to file ITR 2.

The following significant adjustments have been made in ITR-2 for AY 2022-23:

Schedule of Foreign Assets (Schedule FA): The word "accountingperiod" has been replaced by "calendar year ending on December 31, 2021." The taxpayer must report all overseas assets owned between January 1, 2021, and December 31, 2021. This adjustment will make it easier for taxpayers to understand the foreign asset reporting period.
Schedule CG: 1. Disclosure of Fair Market Value (FMV) of capital assets and consideration received in a slump sale transaction Year-by-year details of the land/building upgrade cost. 2. The purchase cost and the indexed acquisition cost will be stated separately.
Other sources schedule (Schedule OS): Interest on the provident fund, which is taxable, is reported. Section 2(22) (e) requires a separate report of considered dividend income.
To ascertain residence status, the taxpayer must select from a list of descriptions relevant to several sections of the Income Tax Act.

A new section called 'Schedule Tax-Deferred on ESOP' has been added: To maintain track of the tax-deferred amount and the year it should be taxed, details on ESOPs of employees received from qualifying start-ups are required.

What is the ITR 2 Form's structure?

Part A and Part B of the ITR 2 Form are divided into two sections; part B computes total income and the tax due on total earnings, while Part A contains general information. The form also includes numerous schedules, such as payment data, income from a house or property, revenue from capital gains, and income from other sources, among other things.

The ITR-2 Form is made up of 22 parts:

Part A: General information is sought in this area.
Part B-TI: This section contains information on how to calculate total revenue.
TTI Part B: This is where you may find out how much tax you owe on your whole income.
Schedule S: This includes information about your earnings from your job.
HP Schedule: This provides information about the income generated by the house.
Schedule CG: This involves calculating capital gains income.
Schedule OS: Involves calculating revenue from other sources.
Schedule CYLA: Income after current-year losses has been taken off.
Schedule BFLA: Income after set-off of the previous year’s brought-forward losses.
Schedule CFL: Losses that will continue to be incurred in the future.
VIA Schedule: Section VI-A exclusions and deductions are covered here.
80G Schedule: This section contains information on the donations that are tax-deductible under Section 80G.
Schedule SPI: This includes information regarding the earnings of specific individuals, such as minors, spouses, etc.
Schedule SI: Contains information on income subject to special rates of taxation.
Schedule EI: Contains information on exempt income.
Schedule IT: Contains the self-assessment and advance tax payment tax statement.
Schedule TDS1: This includes TDS or tax deducted at source on the salary.
Schedule TDS2: Contains the tax deducted at source on non-salary income.
FSI schedule: Information on tax exemptions and income earned outside of India.
TR schedule: This document summarises tax relief claims for taxes paid outside of India.
FA Schedule: This section contains information on foreign assets and data from any other source outside of India.

5A Schedule: This covers information on how the Portuguese Civil Code divides money between couples.

Filing Mode of ITR-2

A taxpayer has the option of filling out Form ITR-2 online or offline. To complete the filing process offline, utilize the JSON tool (available on the tax department's e-filing portal) to fill in the details before submitting them to the income tax website.

ITR-2 Form can be downloaded from either the government's income-tax e-filing portal or other tax filing websites in the online mode, and it comes with certain pre-filled information such as the taxpayer's details as well as more information on salary income, dividend income, interest income, capital gains, and so on.

Prefilled XML can be downloaded from the income-tax website and imported using the JSON tool to make further changes to the form in the offline mode. However, due to problems on the government's income tax website, the tax filer should double-check the pre-filled information online and offline.

Frequently Asked Questions

What exactly is ITR-2?

Individuals with capital gains, more than one house property, international assets or income from foreign assets, and other sources of income in FY 2020-21 should file their income tax returns using form ITR-2.

Who is eligible to file an ITR-2?

Individuals or HUFs who do not have income from a business or profession and for whom the ITR-1 does not apply must file the ITR-2. It comprises agricultural revenue over Rs 5,000, capital profits, and international income.

Is ITR-2 only for salaried employees?

Any individual or HUF whose total income for the year includes income from profit and gains from a business or profession and pay in the form of interest or wage cannot file ITR-2.

Is it possible to file ITR 2 online?

Registered users of the e-Filing portal can use the ITR-2 pre-filling and filing service. Individual taxpayers can use this service to file ITR-2s electronically through the e-Filing site.

If you solely have income from the sale of stocks or mutual funds, which ITR should you file?

You can file ITR-2 if your only source of income is the selling of stocks, bonds, or mutual funds.

Which is the best way to get a pre-filled ITR 2?

Note: Pre-filled XML can be downloaded from 'My Account > Download Pre-Filled XML' after logging into the e-Filing site and imported into the programme to prefill personal and other available details. Validate all of the ITR form's tabs before calculating the tax. Create the XML and save it.

What is the ITR 2 structure?

Part A and Part B of the ITR 2 Form are the two components. Part B computes total income and the tax due on total earnings, while Part A contains general information.

Is it possible for a non-resident of India to file the ITR 2 form?

Yes, a non-resident Indian can fill out the ITR 2 form.

ITR 2 Return Filing