ITR-2 Form Filing

The ITR-2 Form is an important Income Tax Return form used by Indian citizens, as well as Non Residents to file their Tax Returns with the Income Tax Department of India. Individuals who are not eligible to use ITR-1 can use the ITR-2 Form.

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Who is eligible to file ITR 2 for AY 2018-19?

ITR Form 2 is for Individuals and HUF receiving income other than income from “Profits and Gains from Business or Profession”. Thus Persons having income from 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 Race Horses and other legal means of gambling)
  • Foreign Assets/Foreign Income
  • Agricultural Income more than Rs5000
  • Resident not ordinarily resident and a Non resident

Who cannot file ITR 2 for AY 2018-19?

  • Any individual or HUF having income  from Business or Profession
  • Individuals who are eligible to fill out the ITR-1 Form

What is the Structure of ITR 2?

ITR-2 is divided into:

  • Part A: General Information
  • Part B-TI: Computation of Total Income
  • Part B-TTI: Computation of tax liability on total income
  • Details to be filled if the return has been prepared by a Tax Return Preparer
  • Schedule S: Details of income from salaries
  • Schedule HP: Details of income from House Property
  • Schedule CG:. Computation of income under Capital gains.
  • Schedule OS: Computation of income under Income from other sources.
  • Schedule CYLA: Statement of income after set off of current year’s losses
  • Schedule BFLA: Statement of income after set off of unabsorbed loss brought forward from earlier years.
  • Schedule CFL: Statement of losses to be carried forward to future years.
  • Schedule VIA: Statement of deductions (from total income) under Chapter VIA.
  • Schedule 80G: Statement of donations entitled for deduction under section 80G.
  • Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or any other person or association of persons to be included in the income of assessee in Schedules-HP, CG and OS.
  • Schedule SI: Statement of income which is chargeable to tax at special rates
  • Schedule EI: Details of Exempt Income
  • Schedule PTI : Pass through income details from business trust or investment fund as per Section 115UA , 115UB
  • Schedule FSI: Statement of income accruing or arising outside India.
  • Schedule TR: Details of taxes paid outside India.
  • Schedule FA: Details of Foreign Assets.
  • Schedule 5A : Statement of apportionment of income between spouses governed by Portugese Civil Code
  • Schedule AL: Asset and liability at the year end(applicable in case where income exceeds Rs 50 lakhs)

How to file ITR 2?

You can submit your ITR-2 Form either online or offline.

Offline:

Only following persons can file their ITR offline :

  1. Individual who are of the age 80 years or more.
  2. Individual whose income is less than Rs 5 lakhs per year and who do not have to claim refund in the return.

Return can be filed offline by :

  • By furnishing a return in a physical paper form
  • By furnishing a bar-coded return

The Income Tax Department will issue you an acknowledgment at the time of submission of your physical paper return.

Online/Electronically:

  • By furnishing the return electronically under digital signature
  • By transmitting the data electronically and then submitting the verification of the return in Return Form ITR-V

If you submit your ITR-2 Form electronically under digital signature, the acknowledgment will be sent to your registered email id. You can also choose to download it manually from the income tax website. You are then required to sign it and send it to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing.

Remember that ITR-2 is an annexure-less form i.e. you do not have to attach any documents when you send it.
Major changes introduced in ITR 2 for AY 2018-19

  1. Given that ITR-1 is not applicable for the RNORs and the non-residents, they have to necessarily go with ITR-2 for filing their return of income
  2. The applicability of ITR-2 has been made more clear in as much as now it is applicable for individuals and HUF having income other than income under the head “Profits and Gains from Business or Profession”
  3. The field of “Profits and Gains from Business or Profession” which was earlier featuring under Part B – TI has now been removed.
  4. Following this, Schedule-IF (Income from Firm) and Schedule-BP have also been removed. This now means, anyone  earning income from a partnership firm, now has to file ITR-3 and not ITR -2
  5. Additionally, under Schedule AL, the field pertaining to “Interest held in the assets of a firm or association of persons (AOP) as a partner or member thereof”  has been done away with

This means, a partner in a firm who could file his return in ITR 2 until AY 2017-18(specifically made available in ITR -2 for AY 2017-18) has to now file his return in ITR 3 for AY 2018-19

Similar to ITR -1, even in ITR-2, under the Schedule on TDS, there is also an additional field for furnishing details of TDS as per Form 26QC for TDS made on rent. Also, provision for quoting of PAN of Tenant For such rent cases has also been made.

What are the codes which prescribe special rates of tax, to be filled in Schedule SI?

Nature of IncomeSectionRate of TaxSection Code
Tax on accumulated balance of recognised provident fund111To be computed in accordance with rule 9(1) of Part A of fourth Schedule1
Short Term Capital Gains111A151A
Long term capital gains (with indexing)1122021
Long term capital gains (without indexing)1121022
Dividends, interest and income from units purchase in foreign currency115A(1)(a)205A1a
Income from royalty or technical services where agreement entered between 31.3.1961 to 31.3.1976 in case of royalty and between 29.2.1964 and 31.3.1976, and agreement is approved by the Central Government.Paragraph EII of Part I of first schedule of Finance Act50FA
Income from royalty & technical services115A(1)(b) if agreement is entered on or before 31.5.1997205A1b1
Income from royalty & technical services115A(1)(b) if agreement is entered on or after 31.5.1997 but before 1.6.2005205A1b2
Income from royalty & technical services115A(1)(b)if agreement is on or after 1.6.2005105A1b3
Income received in respect of units purchase in foreign currency by a off-shore fund115AB(1)(a)105AB1a
Income by way of long-term capital gains arising from the transfer of units purchase in foreign currency by a off-shore fund115AB(1)(b)105AB1b
Income from bonds or GDR purchases in foreign currency or capital gains arising from their transfer in case of a non-resident115AC(1)105AC
Income from GDR purchased in foreign currency or capital gains arising from their transfer in case of a resident115ACA(1)105ACA
Profits and gains of life insurance business115B12.55B
Winnings from lotteries, crosswords puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever115BB305BB
Tax on non-residents sportsmen or sports associations115BBA105BBA
Tax on income from units of an open – ended equity oriented fund of the Unit Trust of India or of Mutual Funds115BBB105BBB
Anonymous Donations115BBC305BBC
Income by way of long term capital gains115E(a)205Ea
Investment Income115E(b)105Eb
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