Introduction 

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

The due date of filing the ITR 2 form for the Financial Year 2016-17 is 31st July 2017.

This article focuses mainly on ITR 2, Categories of taxpayers eligible/not eligible to file ITR 2, Structure of the ITR 2 Form, key terms related to ITR 2  and major changes made in the ITR 2 Form.

Eligibility to File ITR 2

ITR 2 is applicable for those Individuals or HUFs whose total income for the assessment year includes:

  • Income from Salary/Pension
  • Income from House Property (Multiple)
  • Income from Capital Gains (Short Term and Long Term)
  • Income from Business or Profession carried under a Partnership Firm (where the Individual/ HUF is a partner)
  • Income from Other Sources (Including Winning from Lottery, bets on Race Horses and other legal means of gambling)
  • Foreign Assets

Not Eligible to file ITR 2

  • Any Individual or HUF with income earned from Proprietorship Business/ Profession. In such case, he is required to file ITR 3.
  • Individuals who are eligible to fill out the ITR 1 Form.

Structure of the ITR 2 Form

ITR 2 is divided into two parts and 19 Schedule

  • Part A: General Information
  • Part B-TI: Calculation of Total Income
    Part B-TTI:  Calculation of tax liability on total income
  • Schedule IT: Details of Advance Tax and Self Assessment Tax Payments
  • Schedule TDS1: Details of Tax Deducted at Source and Tax Collected at Source.
  • Schedule TDS2: TDS details of Income other than Salary (As per Form 16A, issued by Deductor(s))
  • Supplementary Schedules TDS1, TDS2 and IT

Modes to file ITR 2 Form

All the taxpayers earning an income more than Rs. 5 lakhs shall mandatorily furnish their Income Tax Returns by online mode. After the submission of the return, the Income Tax Department provides an acknowledgment/response to the taxpayer in Form ITR V. Individual can also download it manually from the income tax website. You are required to sign it and send it to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing or e-verify the return.

Procedure of filing the ITR 2 Form

You can use either online or offline mode to file the ITR 2 Form for the FY 2016-17 by the following ways.

It is mandatory to file ITR 2 electronically  for the following assesses:

  • who earns more than Rs. 5 lakhs per year
  • having any signing authority in any account outside India or assets in outside India
  • claiming relief under Section 90/90A/91 to whom Schedule FSI and Schedule TR apply

Important changes made in ITR 2 (AY 2017-18)

1. Statement of value of assets and liabilities 

Earlier in 2016, the taxpayers were required to declare the value of assets and liabilities if their total income exceeds Rs.50 lakhs and mention the cost of immovable property and assets, But Now taxpayers are also required to give the description of movable assets in new ITR Forms and disclose the address of the immovable property.

2. Income as a partner in a Firm or Association of Persons

F0r disclosure of Interest held in a Partnership firm or Association of persons as a partner or member new field has been introduced in ITR Forms. Such members/partners are also required to disclose the name, address, PAN of the Firm or AOP.

3. Aadhaar Number

It is mandatory for everyone to quote Aadhaar number in the return of income. If any person does not possess the Aadhaar Number but he had applied for the Aadhaar card then he can quote Enrollment ID of Aadhaar Application Form in the ITR.

4. Disclosure of unexplained income and Dividend Income 

New fields inserted in Schedule ‘OS’ to declare unexplained credit or investment and dividend received from domestic companies above Rs 10 lakhs. Such persons cannot opt for ITR 1 (Sahaj).

5.Disclosure of Cash deposits during Demonetisation

This is introduced in all ITR Forms to report on cash deposited by taxpayers in their bank accounts during the demonetization period, i.e., from November 9, 2016, to December 30, 2016.

It is mandatory to fill this column if the taxpayer has deposited Rs 2 lakh or more during the demonetization period.

For any help on ITR Filing feel free to consult the tax experts at LegalRaasta. You can file ITR yourself via our ITR software or get CA’s help on filing income tax return. You can also use the option of Business Return, Bulk Return or Revised Return Filing.