Taxpayers who are used to filing their Income Tax returns will find some differences when they sit down to file their returns for the assessment year 2018-2019. The income tax department has made these changes in line with the recent amendments to the income tax laws. And a few other changes as well. Before you file ITR-2, it is important to be aware of the recent changes.
- It is not mandatory to file your returns online.
- If you have sold any property(s) during the assessment year 2018-2019, you are required to furnish the details of the buyer of the property(s) in Form ITR-2. And it is now mandatory to deduct TDS where the sale value of property exceeded INR 50,00,000.
- Taxpayers who own more than one property, need to declare their income in ITR-2. In the event that there are some rent arrears, it must also be declared as a part of ITR-2 along with the property details.
- Unlike previous years, you are now required to disclose any unlisted company’s shares that you hold. And the same must be done with extensive details such as PAN of the company, the number of shares, the name of the company, the price of shares during acquisition, the date of purchase, face value of shares and so on.
- One of the more interesting additions to ITR-2 2018-19 is the residential status of a taxpayer. Taxpayers now must declare their residential status as a resident, non-resident or resident but not ordinarily resident. Apart from this, they must provide information related to the number of days they were in India or the tax identification number in case they are non-residents.
- Directors of a company are now required to provide their Director Identification Number along with company details, PAN of company and any shares that they own, either listed or unlisted.
The requirement for providing DIN, for example, would eliminate any inactive directors who should not be on the board. Similarly, other changes are done to accommodate the amendment as well as curb tax invasion.
Individuals/ HUFs who are not income from business/ profession during a financial year can file ITR-2.
Who can file ITR-2:-
Individuals/HUFs who are having following sources of income are eligible to file ITR-2 form-
- Income from salary,
- Income from house property,
- Income from other sources like interest from savings A/c., interest from fixed deposits, casual incomes like lottery, card games, income from race horse etc.
- Income from capital gains from sale of shares, property, etc.
- Foreign source income,
- Having Foreign asset such as shares, property, etc. outside India.
Who cannot file ITR-2:-
Taxpayers having following incomes are not eligible to file ITR-2 form-
- Income from business/ profession,
- Taxpayer who is partner in a partnership firm.
If you want to refer format of ITR-1 in pdf format,
If you want to refer instructions for filing ITR-1 in pdf format,
Checklist of documents required to fill ITR-2
Following documents are required to fill-up ITR-2:-
- If you have salary income, you will need Form 16 issued by your employer to enter salary details.
- If you have earned interest on Fixed deposits or saving bank A/c. and TDS has been deducted on the same, you will need TDS certificates i.e. Form 16As issued by deductors to enter interest details.
- You will need Form 26AS to verify TDS on salary as well as TDS other than salary. Form 26AS could be downloaded from incometaxindiaefiling.gov.in.
- If you are living in rented premises, then you will need rent paid receipts for calculation of HRA (in case you forgot to submit the same to your employer within time).
- If you have any capital gain transaction in shares, you will need summary or Profit/loss statement of capital gain transactions of shares or securities during a year, if any for computation of capital gain.
- In case you have sold out any property, you will need sale & purchase deed or property for computation of capital gain.
- You will need your bank passbook, fixed deposit receipts (FDRs) to calculate amount of interest income.
- If you have received rent from your rented house property, then you will need rental receipts to calculate rental income.
- In case you want to claim any loss incurred during current year, then you will need document exhibiting the loss.
- In case you wish to claim previous year's loss, you will need copy of ITR-V pertaining to previous year disclosing said loss.
- You will also need documents or proofs for claiming tax saving deductions U/s. 80C, 80D, 80G, 80GG such as life & health insurance receipts, donation receipts, rent receipts, receipts for tuition fees etc, if the same were not considered in your Form 16.
Remember the due date for filing ITR-2 is 31st July, 2016 for F.Y. 2015-16.
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Contents of ITR-2 (Images from pdf ITR form are to be inserted as per each schedule)
ITR-2 form is divided into following sections. Taxpayer needs to fill the applicable sections.
- Personal details:-
Taxpayer need to provide personal details like PAN (Permanent Account Number), Name, Address, Gender, Date of birth, Contact details, etc.
- Total Income:-
Aggregate of all incomes like salary, house property and other sources is treated as "Gross Total Income". Details related to incomes are required to be filled in respective income schedule. Thereafter total tax saving deductions are deducted from Gross Total Income to compute Total Income.
Taxpayer need to enter income and tax saving deduction details.
- Tax computation:-
Here, tax liability will be computed as per incomes and taxpayer can claim taxes paid by him viz. TDS, advance tax, self assessment tax, etc.
Tax status is referred as Nil tax, tax payable or tax refundable.
Taxpayer needs to sign the return with description that information furnished by him is correct.
At the end, taxpayer is required to fill-up the schedules such as Salary details, house property details, other sources details, taxes paid details, tax saving deduction details, losses details, details of exempt incomes, incomes of specified person, etc.
ITR-2 comes up with 20 schedules.
Refer below to know what is to be filled in a particular schedule-
- Schedule IT- Details of advance & self-assessment tax paid by you pertaining to current financial year.
- Schedule TDS/ TCS-
- Details TDS from salary as mentioned in Form 16 issued by employer.
- Details of TDS other than salary such as TDS on interest from Fixed deposits as per Form 16A issued by tax deductors.
- Details of TCS (tax collected at source) as per Form 27D issued by tax collectors.
- Schedule S- Details of salary, allowances, perquisites, etc. as per your Form 16.
- Schedule HP-
- Self-occupied property: Provide details of property and interest paid on housing loan, if any.
- Let-out property: Provide details of property such as address, rent received during year, municipal taxes paid and interest paid on housing loan, if any.
- Deemed-let out property: Provide details of property such as address, notional rent of similar property in that area, municipal taxes paid and interest paid on housing loan, if any.
- Schedule CG-
- Shares & securities: Provide acquisition and sale details.
- Property: Provide acquisition and sale details. Also details of any improvement made to property. And details of purchase of any other other capital asset to claim exemption.
- Schedule OS- Provide details of other incomes received by you during financial year such as FDR interest, saving bank interest, gifts, dividend from co-operative banks, casual incomes such as lottery winnings, etc.
You can claim expenses too if you have incurred it to earn such income.
- Schedule CYLA- If you have incurred any loss during financial year, you need to provide details of such loss like house property loss or capital loss.
- Schedule BFLA- This schedule will show you the income remained after set-off of losses pertaining to previous year/s'.
All the figures are auto-generated. No manual entry is required in this schedule
- Schedule CFL- If you wish to carry forward any loss to next financial year, you need to enter details of such loss here.
- Schedule VI-A- Details of tax saving deductions are to be entered here.
These deductions are given under various sections of Income Tax Act.
Some of the frequently used tax saving deductions are as follows-
- Sec. 80C- Life insurance, PPF, PF, NSC, tuition fees, specified mutual funds, etc.
- Sec. 80CCC & CCD- Investment in pension funds and schemes of Central Government.
iii. Sec. 80D- Health insurance & preventive medical check-up.
- Sec. 80E- Interest payment of higher education loan.
- Sec. 80G- Donation made to various funds and charitable institutions.
- Sec. 80TTA- Savings bank & post office A/c. interest.
- Schedule 80G- If you have contributed to any charitable trust or fund, you need to enter details here. Enter name of trust, full address, PAN of trust and amount of donation.
This schedule is bifurcated into 3 sections as-
- 100% deduction without qualifying limit- If the donation is made to specified funds of Government like Prime Minister National Relief Fund, Swatch Bharat Fund etc., then enter details here.
- 50% deduction with qualifying limit- If the donation is made to any registered charitable trusts such as tirupati balaji trust, any registered trust working for poor people, etc.
iii. 100% deduction subject to qualifying limit- If the donation is made to some institutions of Government like Rajiv Gandhi memorial trust, Indira Gandhi memorial trust, etc., then enter details here.
- Schedule SPI- If income of your spouse, minor son/ daughter, etc. are included in your income, then you need to mention details here. These provisions are known as "Clubbing of income".
Click here to know more about Clubbing provisions.
- Schedule SI- Generally incomes are taxed as per slab rates. However, some incomes given in Income Tax Act are taxable at special rate.
E.g. Short term capital gain on listed shares is taxed at 15% will be mentioned here.
- Schedule EI- Enter incomes which are not taxable i.e. exempt.
Exempt incomes includes interest, dividend from listed companies, Agricultural income, etc.
- Schedule PTI- If you have invested in business trust or investment fund, income received from such trust or fund is to be entered here alongwith TDS, if any.
- Schedule FSI- If you have earned any income from foreign source, then you need to enter details of the same here.
Following details are required-
- Country name.
- Taxpayer Identification number of that country (similar to PAN in India).
- Income earned in that country like salary, capital gains, etc.
- Taxes paid or deducted, if any in that country to earn such income.
- Tax payable in India if foreign income is treated as Indian income.
- Amount of relief will be auto-calculated as lower of tax paid in foreign country and tax paid in India.
- Schedule TR- This schedule is auto-calculated on the basis of data entered in foreign income schedule. You just need to mention the section for claiming relief as Sec. 90/90A/91 of Income Tax Act.
- Schedule 5A- This schedule is for Portugese Civil Code. If you are governed under this code, then you need to mention PAN of your spouse. As per code, 50% of your income and TDS thereon will be apportioned in the return of your spouse.
- Schedule FA- If you are having any foreign asset or any foreign income, this schedule will be applicable to you.
However, in case of Non-residents, this schedule is optional.
This schedule will be applicable to you if you are having-
- Foreign bank A/c.- Enter details like country, Bank name, A/c. holder's name, ownership status, peak balance during F.Y., etc.
- Financial interest in foreign entity- Enter details like country, Entity name, nature of interest and investment amount, etc.
- Immovable property outside India- Enter details like country, date of purchase, ownership status, investment amount, income earned from property, etc.
- Any capital asset like shares, etc. outside India- Enter details like country, date of purchase, ownership status, investment amount, etc.
- Foreign A/c. for which you are having signing authority- Enter details like country, Name of institution, Name of A/c. holder, A/c. No., Peak balance during F.Y., etc.
- Foreign trust in which you are trustee- Enter details like country, Name of trust, names of other trustees, names and address of settlers, etc.
- Foreign source income (not covered above)- Enter details like country, source of such income, amount of income, etc.
Some important terms
You may come across some tax terms while filing your tax return that you should about-
- Income tax ward/ circle- Income tax ward/ circle is determined on the basis of PAN and jurisdiction. You may view your ward/ circle by clicking here.
- Revised return- After filing your return if you notice any mistake or addition to the return, then your may file a revised return by making necessary corrections. Original return will be replaced by Revised return.
- Defective return- If you file a return containing any defect, then return will be treated as defective. IT department will issue a notice to correct the defect within time specified in notice.
- Notice number- If you are filing a return in response to any notice, you need to mention the notice number mentioned in the notice.
- Advance tax- Tax paid in advance i.e. before the end of financial year are referred as Advance tax. Advance tax is required to be paid in quarterly instalments if total tax liability exceeds Rs. 10,000/-.
- Self-assessment tax- After filling all the income & deduction details in your return and considering all TDS and advance tax payments, if tax is payable, then the same shall be paid before filing of return. This tax is computed by taxpayer himself hence it is referred as Self-assessment tax.
- TCS (tax collection at source)- At the time of sale of some specific goods, tax is collected by purchase of goods. This tax is known as TCS (tax collection at source). You can claim this TCS in your return on the basis of Form 27D issued by purchase i.e. tax collector.
Why to choose myITreturn to file your Income-tax return
- No need to go to a Tax Expert. myITreturn asks you simple questions and by answering them you can easily file your return within minutes.
- You dont have to worry about choosing correct ITR form( ITR 1/2 etc). myITreturn will automatically choose the correct ITR form for you.
- Our helpdesk will assist you with any of your filing as well as post filing queries.
- Our team of tax experts can help and guide you with any of the tax related queries as well as complying with any of the Income-tax related letters and notices.
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The above is a simple ITR-2 Guide. It will help you understand the need for the form and how to fill the necessary details. One of the first steps towards a hassle-free tax filing season is to understand the need for all the documents and be ready with them before time.
You can submit the ITR-2 Form 2 either online or offline. The only difference between the previous years and current year would the addition of a lot more details. Should you be confused regarding the filing of ITR-2, you can seek Expert Service for ITR that myITreturn offers. Our in-house experts will ensure filing returns is as easy as it can get.
- Do I have to file my ITR-2 online?
You can file your ITR-2 either online or offline. But the offline mode is open for senior citizens who are above 80 years old or individuals whose annual income does not exceed INR 5,00,000 or they don’t expect any returns.