ITR 2 Applicability for FY 2024-25 – Easy Guide

ITR 2 Applicability Guide – Each year, as income tax season approaches in India, many taxpayers find themselves puzzled over which ITR form they need to file. With multiple forms available for different types of assessees—be it individuals, HUFs, companies, or others—the decision is not always straightforward. It is not just your taxpayer classification that matters; your income sources, residential status, and certain financial transactions also influence the choice. In this article, we will break down the specifics of ITR 2 for the financial year 2024-25, helping you understand who should use it and under what circumstances.

Table of Contents

ITR 2 Applicability

In essence, all the individuals and HUFs who were ineligible to file ITR 1 can file ITR 2. Moreover, even in case of clubbing of income of spouse, minor children, the assessee can file ITR 2. Therefore, the assessees under the following categories can file ITR 2 –

Total income exceeds Rs. 50 lacs,
Agricultural income exceeds Rs. 5,000,
Income from house property,
Income from Capital Gains
Income from foreign sources,
Investment in unlisted equity shares,
Director in a company,
TDS of the assessee has been deducted u/s 194N,
The assessee has deferred income tax on ESOP received from employer being an eligible start-up,
The assessee has any brought forward loss or has to carry forward any loss under any head of income,
Ownership of assets outside India,
Signing authority in any account outside India.

Who is not eligible to file ITR 2?

Any individual or HUF having income from business or profession such as interest, salary, bonus or commission or any remuneration by any other name called from any partnership firm, cannot file ITR 2. The assessee will have to further navigate through the other ITR forms to choose the correct form.

Documents Required for filing ITR 2

The assessee must have the documents available for filing ITR 2 –

Form 16 – Required if you have salary income; issued by your employer.
Form 16A – Needed if TDS has been deducted on interest from FDs or savings accounts; issued by banks or other deductors.
Form 26AS – Used to verify all TDS (on salary and other income); downloadable from the income tax e-filing portal.
Rent Receipts – Needed for HRA claims if not submitted to the employer.
Capital Gains – Provide a summary of gains/losses from shares or securities for the financial year.
Interest Income – Keep bank passbooks and FD receipts handy for calculating interest earned.
Rental Income – Maintain records of tenant details, municipal tax payments, and interest on home loans, if any.
Current Year Loss – Keep documentation that shows any financial loss you want to claim.
Carry Forward Loss – Provide the previous year’s ITR-V if you are claiming earlier losses.
Tax Deductions (80C, 80D, 80G, 80GG, etc.) – Collect proof for investments, insurance premiums, donations, tuition fees, rent, etc., if not already included in Form 16.

Mandatory Columns to be filled in ITR 2

The assessee fulfilling the criteria for ITR 2 applicability must ensure that the following mandatory requirements have been fulfilled –

Details such as PAN, permanent address, contact details, bank account details, are correct in the pre-filled data,
Status of PAN is active,
Pre-validate your bank account for receiving refunds without any errors,
PAN and Aadhaar are linked.

Structure of ITR 2

The ITR 2 Form is organized into the following sections:

Part A: Basic personal and general information.
Part B-TI: Calculation of total income.
Part B-TTI: Calculation of tax liability based on the total income.

Income Schedules

Schedule S: Information on income earned from salary.
Schedule HP: Details regarding income from house property.
Schedule CG: Computation of capital gains.
Schedule 112A: Income from the sale of equity shares.
Schedule 115AD: Sale of equity shares by non-resident individuals.
Schedule OS: Income from other sources.

Loss and Set-Off Schedules

Schedule CYLA: Adjustment of current year’s losses against income.
Schedule BFLA: Set-off of losses carried forward from previous years.
Schedule CFL: Losses to be carried forward to upcoming years.

Deductions and Contributions

Schedule VIA: Deductions claimed under Chapter VI-A.
Schedule 80G: Donations qualifying for deduction under Section 80G.
Schedule 80GGA: Contributions made towards rural development or scientific research.

Tax Computation and Relief

Schedule AMT: Calculation of Alternate Minimum Tax under Section 115JC.
Schedule AMTC: Tax calculations under Section 115JD.
Schedule SI: Income taxed at special rates.
Schedule SPI: Clubbing of income belonging to spouse, minor child, etc.
Schedule EI: Declaration of tax-exempt income.
Schedule PTI: Earnings from investment funds or business trusts.

Tax Payments and Deductions

Schedule IT: Advance tax and self-assessment tax payments.
Schedule TDS1: TDS deducted on salary.
Schedule TDS2: TDS deducted on income other than salary.

Foreign Income and Assets

Schedule FSI: Foreign income details and applicable tax relief.
Schedule TR: Summary of tax relief for taxes paid outside India.
Schedule FA: Foreign assets and income details.

Special Schedules

Schedule 5A: Split of income between spouses governed by Portuguese Civil Code.
Schedule AL: Disclosure of assets and liabilities as on year-end.
Schedule: ESOP Tax Deferral: Details of deferred tax on Employee Stock Option Plans.

Other Components

Part B: TI: Summary of total income.
Part B: TTI: Summary of tax liability.
Tax Payments Section: Details of advance tax and self-assessed tax payments.
Declaration: Statement by the taxpayer confirming the accuracy of the return.
Tax Return Preparer Details: Information about the individual assisting with the return filing, if any.

FAQs on ITR 2

Q1. Is there ITR 2 applicability for non-residents ?

A1. Yes, a non-resident can file his return in Form ITR 2, if they have income in India such as capital gains, rental income, or interest income. However, they must ensure correct disclosure of their residential status and global income, if applicable.

Q2. Who should file ITR 2 instead of ITR 1?

A2. ITR 2 applicability is meant for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. It should be filed if you have income from sources like capital gains (sale of shares/property), more than one house property, foreign assets or income, or if your total income exceeds Rs. 50 lacs.