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Form ITR 2

 

The filing of ITR 2 Form is a crucial income tax return form that is used by both Indian citizens and NRIs to file returns with the Indian Income Tax Department. Taxpayers who are not qualified to file ITR 1 may nevertheless do so in order to submit their income tax returns. Individuals and Hindu Undivided Families may file an ITR 2 if their income for the fiscal year came from a variety of sources, including wages, pensions, multiple properties, capital gains, foreign assets, business income, income from a partnership, winning the lottery, owning racehorses, and legal gambling.

Additionally, a person who is not qualified to submit using ITR 1 because their income exceeds Rs. 50 lakh might do so using

ITR 2 Form.

 

Who may file a Form ITR-2?

If an individual or HUF receives income from "earnings and gains from business or profession," they may file an ITR form 2 even though they are not entitled to file an ITR-1. In order to file Form ITR 2, individuals must come from one of the following sources:

  • Revenue from a Job or Pension

  • Bringing in money from a residence is ( can be from more than one house property)

  • Receiving capital gains income

  • Having additional income (Lottery, bets on horses, and other gambling)

  • Assets and income from abroad

  • More than Rs. 5000 is earned from agriculture.

  • An NRI and a resident are two different things.

  • Furthermore, everyone who owns unlisted equity shares of a corporation or serves as a director of a firm must file their taxes in ITR-2.

 

Those who are ineligible to file Form ITR-2.

  • Anyone who makes their entire or a portion of their living from their job or business, including Hindu Undivided Families.

  • Those who are qualified to file ITR 1 Form.

  • Partners in a partnership firm are particular people.

 

ITR 2 filing documentation requirements

What paperwork is needed to submit ITR 2 returns?

  • A replica of the tax return for the prior year

  • Finance Statement

  • Deductions/Savings Certificate/TDS Certificate

  • Interest Statement that lists all of the interest payments made over the course of the year.

  • Insofar as they are relevant, balance sheet, P & I, account statement, and other audit reports.

How should Form ITR 2 be filed?

The ITR 2 Form may be submitted in person or online to the Income Tax Department:

  • Giving the refund on paper is one option. When paper returns are filed, the assessee receives an acknowledgment from the Income Tax Department at the moment the paper returns are submitted.

  • Employing   the digital signature to submit the return electronically. Utilizing a digital signature certificate, the assessee submits ITR 2 forms electronically. A confirmation message is delivered to the registered email address.

  • It can also be done by electronically delivering the return's data under an electronic verification code.

  • To accomplish this, submit the return's data electronically, then submit Form ITR V with the return's verification.

  • Providing a bar-coded return.

 

Instructions for submitting Form ITR 2

 

To file an ITR-2 form, you must adhere to the following instructions and guidelines:

It's crucial to fill out the form in the correct sequence.

Part A

All of the plans

TTI and TTI Verification are parts of Part B.

It is important to strike out the schedule and include NA if it does not apply to the assessee (Not Applicable)

If an item does not apply to the assessee, the assessee must indicate NA.

All numbers must be rounded to the nearest one rupee, with the exception of the total income/loss and the amount of tax due, which must be rounded to the nearest multiple of 10.

People who fit the criteria for

If a person is a Central or a State government employee, they should select Government from the list of employers.

People should select "PSU" if they work for a public company.

The assessee cannot utilise ITR Form 2 if they are requesting Section 90/90A/91 relief from double taxation.

Annexes are not included with ITR 2. When submitting, there is no requirement for any attachments.

 

ITR-2 Form ITR-2 is composed of the following sections:

  • Part A: Background Data

  • Schedule S: Compensation information

  • Schedule HP: Income from House Property details

  • Schedule CG: Income Calculation for Capital Gains

  • Income computation for Schedule OS's "Income from Other Sources" section

  • Statement of income after deducting losses from the current year, Schedule CYLA

  • Schedule BFLA: Statement of income after set-off of retroactively carried forward unabsorbed loss from prior years

  • Statement of losses to be carried forward to subsequent years, Schedule CFL

  • Schedule VIA: Statement of deductions under Chapter VIA (from total income

  •  Schedule 80G: List of donations eligible for section 80G deductions

  • Schedule 80GGA: Donations for rural development or scientific research

  • Schedule AMT: Calculating the Alternate Minimum Tax due in accordance with Section 115JC

  • Tax credit calculation according to section 115JD: Schedule AMTC

  • Schedule SPI is a statement of income that is due to a husband, minor child, son's wife, or any other individual or group of individuals that must be included in the assesses income on Schedules HP, CG, and OS.

  • Statement of income subject to taxation at special rates, Schedule SI

  • Detailing Exempt Income in Schedule EI

  • Schedule PTI: Details of pass-through income from business trusts or investment funds according to Sections 115UA and 115UB.

  • Statement of income arising or accruing outside of India is contained in Schedule FSI.

  • Schedule TR: Taxes Paid Outside of India in Detail

  • Schedule FA: Information regarding foreign assets and earnings from any source outside of India

  • Schedule 5A: Income allocation statement in accordance with the Portuguese Civil Code

  • Assets and liabilities at year's end are listed in Schedule AL (applicable in case the total income exceeds Rs 50 lakhs)

  • Schedule DI: Schedule of tax-saving investments, deposits, or payments to claim a deduction or exemption for the extended period of time beginning on April 1, 2020, and ending on June 30, 2020

  • Compute Total Income in Part B-TI.

  • Part B-TTI: Calculation of tax due on gross income

 If a tax return preparer has completed the return, certain information must be filled out.

 

The ITR 2 Form underwent significant revisions for AY 2021–2022

 

The ITR 3 Form now reflects the following changes:

The Finance Act's Section 115BAC requires that the declaration of choosing between the old and new tax regimes be included on the 2020 ITR Forms. Form 10 E must be submitted as well if the assessee is paying taxes under the new tax regime.

ESOPs from qualifying start-ups covered under section 80-IAC are now permitted, thanks to the Finance Act 2020, to be paid or deducted from tax at a later date. For further information on this deferred tax, see Part B of the Schedule TTI.

The corporation shifts the tax responsibility associated with the dividend income.

 

Since the Finance Act of 2020, the tax responsibility for the company's dividend income has been transferred to the investor. The amendments to Sections 10(34), 10(35),  115-O, and 115 BBDA. To enable the deduction of costs like interest from the dividend income, a new row is introduced to schedule OS. To include the specifics of the dividend income that is taxable in the hands of the business trust's unit holders, one additional new row is included under Schedule OS.

In order to calculate interest under Section 234C, the quarterly breakdown of dividend income must be provided.

By displaying the surcharge calculated both before and after the marginal alleviation, one must take into account the marginal impact of the latter. No such requirement existed in the past.

 

The value of the purchase price for either the structure or the land is taken into account under Section 50 C. If the selling consideration is less than the amount due in stamp duty, the difference of 5% between the two amounts is deducted from the stamp duty amount and it is then regarded to represent the entire value of the consideration. In addition to the ITR adjustments, the tolerance level has been raised from 5% to 10%.

A separate disclosure of a monetary donation together with the date must be made in the ITR Form in accordance with schedule 80 GGA.

 

A new column that contains information on the type of transferred securities is added to the ITR 2 form in accordance with Schedule 112A and 115 AD (1)(b)(iii). Additionally, by allowing for the mention of information like the Sale price, FMV, and COA of the securities, both schedules are revised to give the grandfathering clause effect.

 

Form 16 - List of   Documents Needed To File ITR-2 Return

  • Money Statement

  • Financial information about other sources of income

  • Repayment schedule for mortgage loans

  • Receipts for rentals

  • Gift Receipts

  • The cost of insurance

  • An investment in a mutual fund

  • Medical Bills

  • University or College Bills

  • Salary stubs.

 

ITR-2 Return Filing FAQ 

 

1. Do I need to file a balance sheet for my ITR-2 return?

A balance sheet must be used to detail the assets and liabilities of individuals and HUFs who are engaged in business or practise. In order to cover taxpayers earning more than Rs. 50 lakh, schedule AL must be included with ITR 2.

 

2. ITR 2 submissions online are permitted?

Individuals and HUFs without any source of business or professional income must use ITR 2. Both the internet e-filing site and the excel tool are available for ITR 2 filing.

 

3. How many pieces does ITR 2 have?

Part A and Part B make up ITR 2's two sections.

 

4. What is contained in ITR 2's Part A?

The general data is all contained in Part A of Form ITR 2.

 

5. What is contained in Part B of Form ITR 2?

The computation of total income and the tax obligation based on the computation of total income are included in Part B.

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