What is a Form ITR 2?

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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 "accounting period" 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

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.

How to File ITR 2 Form Online for AY 2020-21?

The ‘Prepare and Submit Online’ option is available. You have to enter the necessary information immediately into the e-filing page and submit it.

To prepare and file an ITR-2, follow the steps below:

• Firstly, go to the IT e-Filing website.
• Enter your user ID (PAN), password, and captcha code, then click ‘Login’ to access the e- Filing portal.
• Select the ‘Income Tax Return’ link under the ‘e-File’ option.
• PAN will be auto-populated on the Income Tax Return Page. Choose ‘Assessment Year’ and ‘ITR Form Number’ from the dropdown menu.
• Select ‘Original/Revised Return’ as the ‘Filing Type.’
• Select ‘Prepare and Submit Online’ as your submission mode.
• Continue by clicking the ‘Continue’ button.
• Go through the instructions carefully and follow them to the letter. Fill in all required and appropriate fields on the Online ITR Form.
• To avoid losing data or having to redo work due to a session timeout, click the ‘Preserve Draft’ option regularly to save the ITR details as a draught. The stored draught will be available for 30 days from the saving date until the return is filed or until the notified ITR’s XML schema is not changed (Whichever is earlier).
• Select the appropriate Verification option on the ‘Taxes Paid and Verification’ page.
• To know your Income Tax Return, select one of the following options: I’d like to e-Verify my application within 120 days after filing.
• I do not wish to use e-Verify and instead prefer to mail a signed ITR-V to "Centralized Processing Center, Income Tax Department, Bengaluru – 560 500′′ within 120 days after filing.
• Verify all data entered in the ITR by clicking the ‘Preview and Submit’ button.
• Finally, click on ‘Submit’ the ITR.

The methods below will assist you in e-verifying your income tax return after it has been submitted:

• When selecting the ‘I’d want to E-Verify’ option, e-Verification can be completed using any of the methods below by providing the EVC/OTP when prompted. EVC can be generated at a bank ATM or using the Generate EVC option in My Account Aadhaar OTP, Prevalidated Bank Account, Prevalidated Demat Account.
• The ITR will be submitted if you choose one of the other two verification choices, but the process of filing the ITRs could not be complete until it is validated. The signed ITR-V should be delivered to CPC, Bengaluru, or the submitted ITR should be e-Verified later using the ‘My Account > e-Verify Return’ option.
• Otherwise, the Income Tax Return (ITR) will be auto-submitted if the EVC/OTP is not entered within 60 seconds. Using the ‘My Account > e-Verify Return’ option or by providing a signed ITR-V to CPC, the filed ITR can be confirmed.