Income Tax Return Filing: Who should file the ITR-2 Form? How to file it online?

The Income Tax Department has not only implemented various types of filing returns but has also classified taxpayers into various categories, namely Individual, Hindu Undivided Family, Company, Body of Individuals, Income, Source of Income, and others. For the purpose of standardization and compliance, different Income Tax Return forms are available from different categories for Tax Filers. For example, the ITR-2 form is meant for Individuals and Hindu Undivided Families (HUFs) whose source of income is anything other than their own business or profession. In this article, we will try to mention the different aspects of who should file the ITR-2 Form and how to file it online.

Description of ITR 2 Form

As mentioned in the introduction, ITR-2 form is nothing but a type of form designed by the Income Tax Department of India. It is specifically meant for Individuals and HUFs (Hindu Undivided Family), who have no source of income whatsoever, either from their own business or professional occupation. Like any other Income Tax form, there is a stipulated last date for completing and filing this form.  Here, we must apprise you about the fact that Income Tax ITR 2 Form is not a detailed form that has many segments and fields. Hence you must take extra care to ensure it is filled accurately.

Eligibility or Who Should File ITR-2 Form

We have already informed you that any Individuals or HUFs who have earned any form of profit from their business or profession are not eligible to file ITR Form 2. Additionally, those tax filers who are considered eligible to file the ITR-1 Form are not required to file Form ITR 2. Therefore, people eligible to fill Form ITR 2 are those who have received any income from one or more of the following sources:

• Income from Salary (Covers both Salaried people or Pensioners)

• Income from Capital Gains on the sale of property (Covers both Short Term Capital Gains and Long Term Capital Gains)

• Income from House Property (Covers both Income from single or multiple properties)

• Income from Agricultural sources with a minimum limit of Rs. 5000

• Income from Other Sources (e.g., Income earned by placing bets on the Race Course, winning a Lottery, or Income from legalized gambling)

• Income from Foreign Assets or Income earned in a Foreign Country

• Professionals or Businessmen, provided they also have an income from a partnership firm

• Resident not ordinarily resident and a Non-resident Indians

• Resident Indians, but classified under not ordinarily resident

Who Cannot File ITR 2

• Individuals or HUFs earning income from any profession or business

• Individuals eligible for filing ITR 1 form are not eligible for ITR 2.

Filing of Income Tax Returns Using ITR 2

Broadly speaking, our Income Tax Department accepts two types of filing income tax returns, namely, Manual Filing and eFiling.

1. Income Tax Return through Offline mode

   The ITR-2 Form is mainly available online because of its complexity and classification. However, the Income Tax Department has also allowed specific Individuals who can file their ITR offline. They are:

   • Individuals who have crossed the age of 80 years.

   • An individual whose total income is computed to be less than Rs 5 lakh per annum and who also does not have any refund in the given year.

2. Income Tax Return Through Online Mode and Composition of ITR 2 Form

   As mentioned above, the ITR 2 Form is a detailed form and is further divided into 2 divisions and 19 schedules. The below mentioned points are going to throw light on these divisions in a more detailed manner. 

   • Part A covers all the basic or general information like Name, Address, Date of Birth, PAN number, Aadhar number, Telephone Number

   • Return filing details

   • Part B-TI covers total income and other details used in the calculation of total income

   • Part B-TTI covers the estimation of tax liability on the individuals or HUF’s total income after considering surcharge, education cess, rebate under section 87A, etc.

   • Schedule S covers income from salaries (both Salaried and Pensioner) like Name and Address of Employer, Deduction u/s 16, etc.

   • Schedule HP covers income from House Property (both Single or Multiple Properties) like Name and Address of property 1, property 2, Name of Co-owner, etc

   • Schedule BFLA covers Statement of income after offsetting any unabsorbed loss brought forward from previous years

   • Schedule CG covers the calculation of income under Capital Gains (both Short-term and Long-term) like profit from the sale of land, building, equity share, or unit of an equity oriented Mutual Fund, etc.

   • Schedule CFL covers Statement of losses to be carried forward to future years

   • Schedule CYLA covers Statement of income after offsetting the current year’s losses

   • Schedule OS covers the calculation of income under Income from other sources

   • Schedule VIA covers Statement of deductions (from the individuals or HUF’s total income) under Chapter VIA

   • Schedule 80G covers Statement of donations which are permitted for deduction under section 80G, like all donations permitted for 50% or 100% deduction with or without any qualifying limit

   • Schedule SPI covers the Statement of income specified for the minor child (i.e., income over and above Rs. 1,500 per child), spouse, son’s wife, or any other person or persons required to be included in the income of the Assessees, under Schedules-HP, CG and OS

   • Schedule SI covers Statement of that income which is chargeable to tax at concession or special rates under section 111A, 112 111A, 115AC, 115AD, 112, 112(1)(c)(iii), 115AC, 115ACA, 115AD, 115E, 115BB, 115BBDA, 115BBE, 115BBF, 115BBG, Income chargeable under DTAA rate

   • Schedule EI covers Details of Income, explicitly exempted

   • Schedule PTI covers Income from any business trust or investment fund as per Section 115UA, 115UB like the name of trust/ investment fund, PAN, etc  

   • Schedule FSI covers Statement of income completely earned outside India like Income from outside India with Country Code, Taxpayer Identification Number, Head of income, Tax payable, or already paid for such income under regular provisions in India

   • Schedule TR covers taxes paid entirely outside India

   • Summary of tax relief claimed for taxes paid outside India

   • Schedule FA covers information on individuals or HUF’s Foreign Assets like information on Foreign Bank Accounts, Financial Interest in any Entity, Capital Asset, etc

   • Schedule 5A covers the Statement of sharing of income between spouses administered by the Portuguese Civil Code

   • Schedule AL covers all Assets and Liabilities computed at the year-end (This is only required for those Individuals or HUFs whose total income exceeds Rs 50 lakhs) 

   • Schedule IT covers information on self-assessment tax payments and advance tax payments if any

   • Schedule TDS1 covers information on TDS (both Tax deducted at source and Tax collected at source)

   • Schedule TDSS2 covers information on the source of income apart from regular salary or pension

   • The last 3Schedules, namely IT, TDS1 and TDS2 and are also known as Supplementary Schedules

   

3. Changes in ITR 2 Form for Assessment Year 2022-2023

   The Income Tax Department has introduced a few changes on how to file online with the help of the ITR-2 Form. They are mentioned in the below points.

   • A declaration to choose between the old tax regime or the new tax regime needs to be made as per the Finance Act 2000 under Section 115BAC.

   • Deferred payment or tax deduction on ESOPs is allowed under the Finance Act.

   • Quarterly break up needs to be prompted for the dividend income interest calculation under Section 234C.

   • Schedule DI extended till 31st July 2020 for investments made is now removed from all the ITR forms.

   • Any cash donations under Section 80GGA need to be filled in the form.

Income Tax Return through Online mode

While filing Income Tax Return, ITR-2 form can be downloaded from the official site of the Income Tax department and other authorized portals. You must identify or verify yourself electronically with the help of a digital signature. Since all the data digitally linked you need to input the necessary details electronically and submit the verification of the ITR-V form.

After you have filled in the income tax return online and verified using the digital signature, you will receive the receipt of acceptance at your registered email address. Your next step should be to download the physical receipt from the official website and sign the form manually. Your last step should be to post the signed receipt to the CPC office of the Income Tax Department in Bangalore. You need to be aware that the same should be submitted within a time frame of 120 days, starting from the date of e-filing.