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What is a Form ITR 2?

Form ITR-2 is essential for Indian individuals and HUFs not in business or profession. It's used to file income tax returns, including non-resident Indians. This form streamlines tax filing procedures in India.

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Overview

    • The eligibility for filing Income Tax Returns (ITRs) and the procedures involved have undergone changes recently, based on the information you provided. Here's a summary of the points you mentioned:

    1. ITR Applicability and Categories: The type of ITR to be filed is determined by the taxpayer's category and source of income. HUFs (Hindu Undivided Families) and individuals without income from business or profession are eligible to file ITR 2.

    2. Filing Methods: Taxpayers can fill out ITR 2 using an Excel utility or prepare it online through an e-filing platform.

    3. Exclusion of Senior Citizens from ITR 1: Under the Union Budget 2021, senior citizens are excluded from filing ITR 1. This could be due to their income sources being limited to pension and interest income.

    4. Section 194P: A new section (Section 194P) was introduced, obligating banks to withhold tax from senior citizens over the age of 75 who receive pension and interest income from the bank.

    5. New IRS E-filing Website: On June 7, 2021, the Internal Revenue Service (IRS) released a new e-filing website. This new website aims to replace the existing portal and offers a user-friendly experience for simplified and quick e-filing.

    6. ITR Availability on New Portal: The new IRS e-filing portal provides access to ITR-1, ITR-2 (offline), and ITR-4 (online and offline). In June 2021, the new IT portal will also offer free ITR preparation software.

    7. Fast Processing and Refunds: The use of the new portal is expected to result in faster processing of ITRs and, subsequently, quicker income tax refunds for taxpayers.

    8. Single Dashboard: The new portal aims to streamline tax-related interactions for taxpayers by consolidating all interactions onto a single dashboard.

    Please note that the specific details provided are based on the information you've given, and I recommend verifying any updates or changes with the relevant tax authorities or official sources, as the tax laws and regulations can evolve over time.

Who is qualified to file ITR 2 for the 2020-21 fiscal year?

For the fiscal year 2020-21, the following individuals and Hindu Undivided Families (HUFs) are eligible to file Income Tax Return (ITR) Form 2 (ITR-2):

1. Income Sources:
- Income from a salary or pension
- Earnings from a residential property
- Other sources of income (including income from lottery winnings or racehorses)

2. Aggregate Income:
- If the individual or HUF has an aggregate income exceeding Rs 50 lakh during the financial year from the following sources:
- Pension or Salary
- Residential property
- Other sources of income

3. Agricultural Income:
- If the taxpayer has earned more than Rs 5,000 from agriculture during the fiscal year.

4. Foreign Assets or Overseas Income:
- If the taxpayer owns foreign assets or earns income from overseas sources, they are required to declare and pay taxes on such income.

5. Directorship in a Corporation:
- If the taxpayer serves as a director in a company.

6. Residential Status:
- If the taxpayer is an RNOR (Resident but Not Ordinarily Resident), Not Ordinarily Resident, or Non-Resident during the fiscal year.

7. Capital Gains:
- If the taxpayer has earned gains from capital investments, such as the sale of property, stocks, etc.

8. Investment in Unlisted Equity Shares:
- If the taxpayer has invested in unlisted equity shares during the fiscal year.

9. Clubbing of Income:
- If the taxpayer's income is clubbed with the income of another assessee (like spouse, child, or relatives), and that other assessee's income falls under the categories specified for ITR-2.

It's important to note that tax laws and regulations can be complex and subject to changes, so it's advisable to consult with a tax professional or refer to the official tax authority guidelines to ensure accurate and up-to-date information for your specific situation.

To prepare and file an ITR-2, follow the steps below:

    • - Access the official Income Tax e-Filing website.
    - Login using your PAN, password, and captcha code.
    - Select 'e-File' from the main menu and click 'Income Tax Return.'
    - Your PAN will be auto-populated. Choose 'Assessment Year' and 'ITR Form Number' from dropdowns.
    - Select 'Original/Revised Return' as the 'Filing Type.'
    - Choose 'Prepare and Submit Online' as submission mode.
    - Click 'Continue' to proceed.
    - Follow instructions carefully, filling all required fields in the Online ITR Form.
    - To prevent data loss, use 'Preserve Draft' option regularly.
    - Choose the appropriate verification option on 'Taxes Paid and Verification' page.
    - Select e-Verify option within 120 days or mail signed ITR-V to designated address.
    - Review entered data, then click 'Preview and Submit.'
    - Finally, click 'Submit' to finalize ITR submission.

    This format provides a concise overview of the steps involved in filing your income tax return on the e-Filing website. If you need more detailed information about any step, please let me know.

How to Use Excel to File ITR 2 Forms for AY 2020-21?

Preparing and Submitting ITR Online:

- You can prepare and submit your ITR either online on the e-filing portal or offline using an Excel tool.
- Both methods involve filing ITR online through the e-filing portal.
- The difference is whether the ITR is prepared online or offline using an Excel application.
- Download the appropriate ITR form and fill it out offline using an Excel tool.
- Save the resulting XML file after filling out the form.
- Upload the saved XML file on the e-filing portal.

Steps for Offline Preparation and Online Submission using Excel Utility:

1. Download ITR Form:
- Go to the IRS e-Filing website and download the relevant ITR form.
- Choose the assessment year from the dropdown options.
- Download the Microsoft Excel file in the form of a zip file.

2. Extract and Open Utility:
- Extract the downloaded zip file to access the Excel utility.
- Open the Excel file and click 'enable content' to activate it.
- Select 'enable macros' from the dropdown menu.

3. Entering Data:
- Fill data in the green cells; red fields are mandatory.
- Use CTRL X and CTRL V instead of copy-pasting.
- Navigation options include Previous, Compute Tax, Print, and Help.

4. Filling ITR Form:
- Fill all required information under each tab and verify.
- Fill in all relevant fields on the ITR form.

5. Validating and Saving XML:
- Validate all tabs of the ITR form before calculating tax.
- Create the XML file and save it.

6. Submitting Online:
- Go to the e-Filing portal.
- Enter your PAN, password, and captcha to log in.
- Select 'Income Tax Return' under 'e-File' option.
- PAN will be auto-populated on the Income Tax Return Page.
- Choose Assessment Year and ITR Form Number.
- Select 'Original/Revised Return' under 'Filing Type.'
- Choose 'Upload XML' as the 'Submission Mode.'

These steps provide a detailed guide on how to prepare your ITR offline using an Excel utility and then submit it online through the e-filing portal. Always ensure accuracy and follow the official instructions for a successful filing.

Filing Mode

    • Certainly, here's the information presented in bullet points:

    Filing Options: Online and Offline
    - Taxpayers can file Form ITR-2 either online or offline.
    - For offline filing, use the JSON tool available on the tax department's e-filing portal.
    - Complete details offline and then submit to the income tax website.

    Downloading ITR-2 Form
    - Download ITR-2 Form from the government's income-tax e-filing portal or other authorized tax filing websites.
    - Online mode provides pre-filled information including taxpayer details, salary income, dividend income, interest income, capital gains, etc.

    Utilizing Pre-filled XML
    - Download prefilled XML from the income-tax website.
    - Use the JSON tool to import the XML for further offline form modification.
    - Double-check pre-filled details both online and offline due to potential website issues.

    Feel free to use this format for your reference. If you have more questions or need further assistance, don't hesitate to ask.

FAQ

Frequently Asked Questions

Individuals with capital gains, more than one house property, international assets or income from foreign assets, and other sources of income in FY 2020-21 should file their income tax returns using form ITR-2.
Any individual or HUF whose total income for the year includes income from profit and gains from a business or profession and pay in the form of interest or wage cannot file ITR-2.
Part A and Part B of the ITR 2 Form are the two components. Part B computes total income and the tax due on total earnings, while Part A contains general information.
Yes, a non-resident Indian can fill out the ITR 2 form.
Individuals or HUFs who do not have income from a business or profession and for whom the ITR-1 does not apply must file the ITR-2. It comprises agricultural revenue over Rs 5,000, capital profits, and international income.
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