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

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In most countries, Tax is a major source of revenue for the government and the same is true for India as well. As people begin to realize that paying taxes is a mandatory task, they also have an obligation to file income tax returns. All Indian taxpayers are covered under the Income Tax Act of 1961. Section 139(1) specifically says that all individuals whose total income during the previous year exceeds the maximum slab not chargeable to tax, need to file their income tax returns.

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 for from different categories for Tax Filers. For example, the ITR-2 form is meant those Individuals and Hindu Undivided Family (HUFs), whose source of income is anything other than their own business or profession. In this article, we would try to mention the different aspects of who should file 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 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 filling this form. Please note that for the current financial year 2018-2019, this date is 31st July 2019.  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 and HUFs who have earned any form of profit from their business or profession, are not eligible to fill ITR Form 2. Additionally, those tax filers who are considered eligible to fill the ITR-1 Form are not required to fill 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 in 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

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.

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 do not have any refund in the given year.

Income Tax Return through Online mode and Composition of ITR 2 Form

As mentioned above ITR 2 Form is a detailed form and it 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. These points should be while filing income tax return online for the Assessment Year 2018-19.

  • 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 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 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 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 c Summary of tax relief claimed for taxes paid outside India
  • Schedule FA covers information on individuals or HUF’s Foreign Assets like information of Foreign Bank Accounts, Financial Interest in any Entity, Capital Asset, etc
  • Schedule 5A covers 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 HUF’s 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

Changes in ITR 2 Form for Assessment Year 2018-19

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

  • The segment under Schedule AL is related to Interest held in the assets of a firm or association has been deleted.
  • The segment under Schedule-IF (Income from Firm) has been completely deleted. It said that the person with an income from a partnership firm, then he/she is required to submit the Form of ITR-3 instead of ITR-2.
  • ITR-2 form requires that details related to TDS are also included. Therefore a separate field as per Form 26QC is introduced that would mention TDS filing in case of rent, PAN of Tenant, etc.
  • In case of filing an income tax return, online if the ITR-1 is not filed by the non-residents and RNORs, they also need to submit furnish ITR-2.

Income Tax Return through Online mode

While filing Income Tax Return, ITR-2 form can be downloaded from the official site or 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 would receive the receipt of acceptance in 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 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.

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