New
January 18, 2023
By
Jasmine John

What is ITR 2 and How Can You File it?

To guarantee simple compliance, the ITR2 should be implemented according to the category of the source of income and the taxpayer. In reality, only HUFs and people who do not earn a living from a profession or company can submit the ITR 2. To file ITR2 online, go to an e-filing platform or just fill out an excel utility. This page will inform you about the facts of the ITR 2 form and its subsequent process. If you want to learn more about it, keep reading.

What Is ITR 2?

The ITR-2 is a form used to file tax returns with the Income Tax Department of India by both Indian nationals and non-resident Indians. Filing Income Tax in India necessitates the completion and submission of various forms based on the assessee's category. The ITR-2 form is one of the forms that must be completed throughout the tax filing procedure.

Who Is Qualified To Submit ITR-2 For The Fiscal Year 2022-23?

Individuals and HUFs who receive income other than 'Profits and Gains from Business or Profession' must use the ITR-2 form. Individuals earning income from the following sources, therefore, are qualified to file Form ITR-2:

1. Salary/pension income

2. House property income (income can be from more than one house property)

3. Income from capital gains/losses on investment/property sales (both short-term and long-term)

4. Other sources of income (including winning from the lottery, bets on racehorses, and other legal means of gambling)

5. Foreign earnings

6. More than Rs 5,000 in agricultural revenue

7. Non-resident and resident not ordinarily resident

The total income from the aforementioned sources potentially reaches Rs 50 lakh.

Furthermore, if you are a Director of any company and a person who has invested in a firm's unlisted equity shares, you must file ITR-2 forms.

Who Is Ineligible To File An ITR 2 Return?

Individuals or Hindu Undivided Families having income obtained entirely or partially through a company or profession Individuals who are partners in a Partnership Firm Individuals who are partners in a Partnership Firm

What Are The ITR-2 Form's Components?

The ITR-2 Form is broken down into the following sections:

Part A: Basic Information

Part B-TI: Total Income Calculation

Part B-TTI: Calculation of total income tax liability

Schedule S: Salary income details

Schedule HP: Income from house property details

Schedule CG: Income from capital gains computation.

Schedule OS: Income from other sources computation.

Schedule CYLA: Income after deducting current-year losses

Schedule BFLA: Income after Setoff of Brought Forward Losses from Previous Years

CFL Schedule: Losses to be carried forward to subsequent years.

Schedule VIA: Chapter VI-A Deductions (Section)

Schedule 80G: Information on donations eligible for a tax deduction under Section 80G.

Schedule SPI: Income of certain people (spouse, minor child, etc.) is includible in the assessee's income (income of the minor child, over Rs. 1,500 per child, to be included)

Schedule SI: Income subject to special taxation.

Schedule EI: Exempt Income Details (Income not to be included in Total Income)

Schedule IT: Payment of advance tax and self-assessment tax statement.

TDS1: Details of tax deducted at source from pay.

Schedule TDS2: Statement of tax deducted at source on non-salary income.

Schedule FSI: Information on income earned outside of India and tax benefits

Schedule TR: A summary of the tax breaks sought for taxes paid outside of India.

Schedule FA: Information on foreign assets and income earned outside of India.

Schedule 5A: Information on income allocation between spouses under the Portuguese Civil Code.

How To File ITR 2

You can file your income tax return either offline or online. However, only taxpayers aged 80 and over are qualified for ITR 2 offline filing. These persons can submit returns promptly by employing a hard copy of the ITR-2 form and a bar-coded return of income earned. Furthermore, the IT department acknowledges receipt when an assessee submits this paper form.

Follow the steps below to file your ITR online:

Step 1: Navigate to the IRS's official e-filing website.

Step 2: Enter your password and user ID (PAN).

Step 3: Fill in the captcha that appears on the screen.

Step 4: Select 'e-File' from the menu.

Step 5: Select "Income Tax Return."

Step 6: Your PAN information will be instantly updated on the income tax return page.

Step 7: Select 'Assessment Year,' then 'ITR Form Number.'

Step 8: Select 'Filing Type,' followed by 'Original/Revised Return.'

Step 9: Select the "Continue" option.

Step 10: Carefully read the instructions. Then, fill out the ITR-2 form by entering information in all relevant and required fields.

Step 11: To avoid losing data due to session time-out, use the 'Save Draft' option frequently.

Step 12: Select an acceptable verification option in the 'Taxes Paid' and 'Verification' sections.

Step 13: Select an appropriate option to validate your ITR.

Step 14: Select the 'Preview and Submit' option.

Step 15: Verify that your ITR information is correct.

Step 16: Click 'Submit'.

How To File An ITR Offline

Step 1: Navigate to the IRS e-filing website.

Step 2: Go to 'e-Nivaran' and choose 'Downloads' from the top bar.

Step 3: From the drop-down menu, select the evaluation year.

Step 4: Save the Microsoft Excel file as a zip file. After you've extracted it to your computer, open it.

Step 5: Select 'Enable Content' and then click the 'Enable Macros' button.

Step 6: Once the excel file is opened, remember that the red fields must be filled out and the green fields are for data entry. Data should also not be 'cut' or 'pasted.'

Step 7: Fill out the information under each tab and then click 'Validate.'

Step 8: Before computing the tax, validate all of the tabs on this ITR form.

Step 9: Create and save an XML-formatted file.

Step 10: Access the income tax e-filing portal.

Step 11: Follow the same procedures as before.

Step 12: Click on the 'Submission Mode' option after selecting 'Original/Revised Return'.

Step 13: Submit the excel file by selecting 'Upload XML'. Now, file ITR 2 as advised earlier.

Significant Adjustments In ITR-2 For The Fiscal Year 2022-23.

Schedule of Foreign Assets (FA):

The word 'accounting period' has been substituted with 'calendar year ending on December 31, 2021'. It implies that the taxpayer must provide information on any overseas assets owned between January 1, 2021, and December 31, 2021. This adjustment will make it easier for taxpayers to register their overseas assets throughout the reporting period.

Schedule of capital gains (Schedule CG):

Fair Market Value (FMV) disclosure of capital assets and payment received in a slump sale deal

A year-by-year breakdown of land/building improvement costs

Separate disclosure of purchase cost and indexed acquisition cost

Schedule of other sources (OS):

  1. Reporting of taxable interest earned on the provident fund
  2. Section 2(22)(e) requires separate disclosure of considered dividend income.

To determine residence status, the taxpayer must select among descriptions relevant to several sections of the Income Tax Act.

A new 'Schedule Tax Deferred on ESOP' section has been added: Details about employee stock options (ESOPs) received from qualifying start-ups are necessary to track the amount of tax-deferred and the year it should be taxed.

Related Blog Post