MAJOR CHANGES INTRODUCED IN ITR- 2 IN 2020-21

FORM NO. 2

1. Resident but Not an Ordinary Resident and Non Resident Individuals have to file their income tax returns in ITR -2 even in case total income is below Rs.50 lacs.
2. The Assessee should disclose in case he is filing return other than Proviso 1 to Section 139(1)
a. Cash deposit above Rs. 1 crore in the current Accounts in bank
b. Expenditure incurred above Rs. 2 lacs for every travel for himself or for others.
c. Expenditure incurred above Rs. 1 Lacs on .account of house only

3.  Resident individuals having house property more than one ………. shall also file ITR-2
– ITR-2 continues to apply to resident individual having income exceeding Rs. 50 lacs
– Individuals having income from profit and gains of business, cannot file ITR 2
– In case an individual is a director in a Company or holds unlisted Company’s equity shares, following should also be disclosed
– Name of the company, type of Company, PAN number, listed or unlisted DIN
– In case of short-term / long-term capital gains from sale of land / building or both, the details of buyer’s, name, PAN, Aadhaar No., share of ownership, and address has to be given.

4. A separate Schedule 112A for the calculation of the long-term capital gains on the sale of equity shares or units of Business Trusts which are liable to be taxed.
5. Under other source a taxpayer should provide the details of “any other income’.
6. The details of deduction against income from other sources should be provided.
7. Deduction under section 57:-
a. Expenses (in case other than family Pension)
b. Deduction under section 57 (ii)(a) (in case of family Pension only)
c. Depreciation (available only if income offered in i c of schedule OS)

8. Schedule VI A for tax deduction amended to include deduction under section 80EEA and 80EEB.

9. In case of business trust or investment fund the details of ‘capital gains’ income and ‘dividend’ income should be provided.
10. The details of tax deduction claim for investment or payments or expenditure made between 1st April, 2020 to 30th June, 2020 in schedule d “D I” of part “B” should be mentioned.


10.  Long term capital gains –

Payments / acquisitions / purchase consideration for the purpose of claiming deduction under section 54 / 54 CB

 Amount utilized out of capital gains account (as per SL B10 a of schedule CCs specially amount utilized between 1st April, 2020 to 30th June, 2020.

11. Short term capital gain-

 Under section 54B account utilized out of capital gain account as per SL No. A 6a of schedule “CG” and amount utilized between 1st April, 2020 to 30th June, 2020 separately

12. While providing the details of bank account if a taxpayer selects multiple bank accounts for credit of refund, the Income Tax Department may choose any account for processing the refund.

 Details of bank account for refund -to be given

FORM2

Who can file ITR 2 – ITI 2 is to be filed by an individual or H.U.F. who does not have income from profit from business or profession and not suitable to file SAHAJ that is ITR Form No. 1

ITR 2 is in more details than ITR 1. More information is required, if filed under Seventh Provision to section 139(1) of Income Tax Act, 1961.

In case of Companies “Type of Company’ is removed.
Part A General information as above in Form No. 1


SALARIES

After filing annual information as in SAHAJ as mentioned in earlier article an individual has to mention (one has to fill fully) his gross salary and then the amount of exempt allowances, perquisites and profit in lieu of salary shall be deducted or added to arrive at the taxable figure of salary income. Further the new ITR forms seeks separate reporting of all deductions allowable under section 1 b, i.e.,  standard deduction, entertainment allowances, professional tax.
1. Name of employer
2. Address
3. TAN number (in case tax deducted at source)
4. Nature of employment- government, public enterprise, private       or pensioners
5 gross salary –
i. Basic DA and all allowances under section under section 17(1) of Income Tax Act, 1961.
ii prerequisites (all types)
iii. Profit in lieu of salary as per terms of employment, for employee or PF superannuation fund other than employer contribution and interest there on.

Deductions:-

6. Less allowance under section 10

  • travel concession, gratuity, pension, earned leave, retrenchment compensation or voluntary retirement.
  • House rent allowance
  • Conveyance allowance to meet expenses in employment
  • Deduction under section 16- standard deduction, professional tax, entertainment allowance

Schedule HP

House Property

i. Address of the property, town, State, PIN
ii. In case of co-owner property- Name, PAN of the co-owner, percentage of share
iii. Self-occupied / let out or deemed to be let out U/s 23 (4)
iv. In case of letout- Name, PAN / TAN of the tenant
v. Gross rent received / else lettable value
vi. Local taxes paid
vii. Interest payable on borrowed capital maximum upto 2 lacs in case of self occupied or Rs.30,000/- as the case may be.
viii. Arrear of rent less 30% (All the above details are to be filled for each house property separately)
ix. Pass Through in case of Business trust / Investment trust under section 115 UA / 115 UB

Schedule CG Capital Gains

1. Consolidate the capital gain arising from same type of capital assets.
2. In LTCG on equity share or units of mutual fund where STT (Securities Transaction Tax)T has been paid separate computation to be made for each script separately.
3. Net Capital Gain should be aggregated.
4. Thereafter tax shall be charged at the rate 10% on the aggregate LTCG reduced by Rs.100,000/- or in case of indexed cost, rate is 20%.
5. Schedule B4 is for residents and B7 is for non residents.
6. In case of STCG schedule A3 and A4 are for non residents.
7. Valuation of unlisted shares by registered valuer u/s 115 UA.
8. Capital gain on immovable property in schedule A or B to mention.

  • Name of the buyer
  • PAN number
  • Details of immovable property for each property transferred separately
  • Stamp duty valuation in each property

9. Long Term Capital Loss shall be ignored to set off and carried forward to next year and shall not be adjusted with Short Term CapitalGain.


10. In part D- Deduction under section 54 / 54F , 54EC etc can be claimed in Part D as applicable. Details of new investment has to be furnished.


11. In part E- Intra head adjustments as per law shall be made and final Capital Gain shall be made at the specific rate of 10% , 20% or 15% or DTAA of other countries. suitable balances shall be carried to Schedule CYLA  and CFL for reporting of losses to be carried forward.


12. Report the quarter wise detail of accrual or receipt of income which is to be given in Part F

Property wise-STCG

A.1.  Full value of consideration (in case of immovable property)
2. Value of property as per valuation authority.
3. Full value of consideration adopted as per section 50C for the purpose of capital Gain in case it doesn’t exceed 1.05 % times.

B. Deduction

  •  Cost of acquisition
  • Cost of improvisation, if any.
  •  Expenditure wholly and exclusively in connection with transfer
  • Capital Gain (A – B)
  • Deduction under section 54B

Schedule 112A inserted to report individuals script wise details on long term shares which was earlier exempt from Tax and eligible for grand fathering.

In case of Non-Residents for Similar Provisions, Schedule 115AD(i) (b)

(iii) inserted to report individuals script wise details.

Note: Wait for the residual part of the returns to be uploaded soon.

 

 

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