ITR-2

ITR-2 Form

A comprehensive guide to understanding the ITR-2 Form

What is the ITR-2 Form?

The ITR-2 Form is the Income Tax Return form for Individuals and HUFs who do not have any income from Business or Profession.

The due date of filing the ITR-2 form for the Financial Year 2015-16 is 31 July, 2016 .

Who is eligible to file the ITR-2 Return?

This Return Form is to be used by an individual or a Hindu Undivided Family whose total income for the assessment year includes:

Income from Salary/Pension
Income from House Property
Income from Capital Gains (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

Who is not eligible to file the ITR-2 Return?

Any individual or HUF with income wholly or partially earned from Business or Profession
Individuals who are eligible to fill out the ITR-1 Form
Individuals who are partners in a Partnership Firm

Made a profit from selling a house property or a large asset?

Good news. The Income Tax Department allows tax relief under two sections when the capital gains are reinvested.

Click here to read more.

What is the structure of the ITR-2 Form?

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 IT: Statement of payment of advance-tax and tax on self-assessment.
Schedule TDS1: Details of tax deducted at source on salary.
Schedule TDS2: Statement of tax deducted at source on income other than salary.
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 Portuguese Civil Code.

My only income is from selling shares

Do you need to pay tax if your only income is from selling shares? Its a complicated question but the experts have a simple answer.

How do I fill out my ITR-2 Form?

Here are a few general guidelines to keep in mind while filling your ITR-2 form:

If any schedule is not applicable to you, strike it out and write —NA— across it
If any item is not applicable to you, write NA against it
Indicate nil figures by “Nil”
Put a “-” sign before negative figures
All figures are to be rounded off to the nearest one rupee except figures for total income/loss and tax payable. Those are to be rounded off to the nearest multiple of ten.
If you are an individual, under the Employer Categoryyou should tick Government if you are a Central/State Government employee. You should tick PSU if you work in a public sector company of the Central/State Government.

The ITR-2 Form can also not be used if you are claiming double taxation relief under Section 90/90A/91.

What is the best sequence to fill it out?

The easiest way to fill out your ITR-2 Form is to follow this sequence:

Part A
All the schedules
Part B-TI and Part B-TTI
Verification

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

Nature of Income	Section	Rate of Tax	Section Code
Tax on accumulated balance of recognised provident fund	111	To be computed in accordance with rule 9(1) of Part A of fourth Schedule	1
Short Term Capital Gains	111A	15	1A
Long term capital gains (with indexing)	112	20	21
Long term capital gains (without indexing)	112	10	22
Dividends, interest and income from units purchase in foreign currency	115A(1)(a)	20	5A1a
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 Act	50	FA
Income from royalty & technical services	115A(1)(b) if agreement is entered on or before 31.5.1997	20	5A1b1
Income from royalty & technical services	115A(1)(b) if agreement is entered on or after 31.5.1997 but before 1.6.2005	20	5A1b2
Income from royalty & technical services	115A(1)(b)if agreement is on or after 1.6.2005	10	5A1b3
Income received in respect of units purchase in foreign currency by a off-shore fund	115AB(1)(a)	10	5AB1a
Income by way of long-term capital gains arising from the transfer of units purchase in foreign currency by a off-shore fund	115AB(1)(b)	10	5AB1b
Income from bonds or GDR purchases in foreign currency or capital gains arising from their transfer in case of a non-resident	115AC(1)	10	5AC
Income from GDR purchased in foreign currency or capital gains arising from their transfer in case of a resident	115ACA(1)	10	5ACA
Profits and gains of life insurance business	115B	12.5	5B
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 whatsoever	115BB	30	5BB
Tax on non-residents sportsmen or sports associations	115BBA	10	5BBA
Tax on income from units of an open – ended equity oriented fund of the Unit Trust of India or of Mutual Funds	115BBB	10	5BBB
Anonymous Donations	115BBC	30	5BBC
Income by way of long term capital gains	115E(a)	20	5Ea
Investment Income	115E(b)	10	5Eb
Double Taxation Agreement			DTAA

How do I file my ITR-2 Form?

You can submit your ITR-2 Form either online or offline. It is mandatory to file Income Tax Returns electronically (either through Mode 3 or Mode 4) for the following assesses:

those who earn more than Rs. 5 lakhs per year
those having any assets outside India (including financial interest in any entity) or signing authority in any account outside India
those claiming relief under Section 90/90A/91 to whom Schedule FSI and Schedule TR apply

Offline:

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.

Frequently Asked Questions

How do I file ITR-2 when I have sold a house?

Yes you can.

I am supposed to file ITR-2 and not ITR-1 if my maximum exempted income exceeds Rs. 5000. I am confused – what qualifies as exempt income?

Certain income are exempt under section 10 of the Income Tax Act. Exempt income includes – Allowances which may be exempt to a certain extent for example HRA, LTA, transport allowance etc. Gratuity, leave encashment, pension may be exempt under section 10 of the Act.

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