Guidelines for ITR-2 Filing

Who can e-file ITR-2?

-Individual or Hindu Undivided Family.
-Not eligible for ITR-1.
-Having Income under the head “Profits or gains of business.

Manner of Filing ITR-2 ?

Screenshot

Reference: Income Tax e-filing website.

If you are eligible for filing ITR-1 then sign up on Trutax and file your income tax returns within few minutes: ITR-2 Filing

Trutax Filing Process.

Every individual or HUF whose total income before allowing deductions under Chapter VI-A of the Income-tax Act, exceeds the maximum amount which is not chargeable to income tax is obligated to furnish his return of income. The maximum amount not chargeable to income tax in case of different categories of individuals is as follows

How to fill the ITR-2?

PART-A (GENERAL INFORMATION)

PART-A includes the details of assessee such as Name , PAN, Address information, Contact Information and relevant information to determine the assessee’s taxprofile.

PART B- TI Computation of Total Income.

PART B-TTI-Computation of Tax Liability on Total Income.

Under this section, the below details are available. 

·         Tax computation

·         Rebate u/s 87A

·         Relief u/s 89(1), 90, 90A and 91.

·         Interest Chargeable u/s 234A, 234B, 234C

·         Summary of Tax Payments like TDS, TCS, Advance Tax and Self-Assessment Tax. 

·         Net Tax Payable or Net Refund receivable.

·         Bank Account Details.

·         Resident individual or HUF has to select whether during the previous year they (i) hold, as beneficial owner, beneficiary or otherwise, any asset (including financial interest in any entity) located outside India or (ii) have signing authority in any account located outside India or (iii) have income from any source outside India?

·         Verification.

Schedule IT, TDS, TCS

Schedule-S:

·         Fill the details of salary as given in TDS certificate(s) i.e., Form 16 issued by the employer(s). 

·         In case there was more than one employer during the year, please furnish the separate details with respect to each salary received from different employers.

Schedule-HP:

·         This schedule is to be filled if you have a rental income. 

·         If there are more than two house properties, fill out the details for each property byØ selecting “Add Property” button. 

·         In case, a single house property is owned by the assessee, which is self-occupied andØ interest paid on the loan taken for the house property is to be claimed as a deduction then also this schedule shall be filled to claim deduction. 

·         In case the property is co-owned then the assessee needs to furnish the name of the co-owner, PAN and percentage of share of the other co-owner (s) in the property. In case of part ownership of property, the figure of annual value or rent receivable/received should be for whole of the property and only after computation of annual value the portion chargeable in own hands should be computed by multiplying such annual value with assessee’s percentage share in the property.

Schedule-IF:

This Schedule is to be filled if you are a partner in a firm. The below details of each firm in which you are partner are to be provided in this schedule: 

·         Name

·         PAN 

·         Whether liable for audit 

·         Whether section 92E is applicable?

·         Percentage share in the profit of the firm 

·         Amount of share in the profit.

·         Capital Balance as on 31st March in the firm.

Schedule- BP:

Capital gains are bifurcated into:

·         Short-term capital gain.

·         Long-term capital gain.

Schedule-OS:

In this schedule provide the below details: 

·         The gross income by way of dividend and interest which is not exempt.

·         Rental Income from hiring machinery, plant or furniture, building (where its letting is inseparable from the letting of the said machinery, plant or furniture), if it is not chargeable to income-tax under the head “Profits and gains of business o profession”. 

·         Any other income under the head other sources such as winning from lottery, crossword puzzles etc., income of the nature referred to in section 68, 69, 69A, 69B, 69C or 69D. The nature of such income is also required to be mentioned. 

·         Income from owning and maintaining race horses.

Schedule CYLA.

Schedule-BFLA

Schedule-CFL

Schedule- VI-A

Schedule-80G:

Mention the details of donations entitled for deduction under section 80G. Donations entitled for deductions have been divided in four categories, namely: 

·         Donations entitled for 100% deduction without qualifying limit

·         Donations entitled for 50% deduction without qualifying limit 

·         Donations entitled for 100 % deduction subject to qualifying limit

·         Donations entitled for 50% deduction subject to qualifying limit

Schedule-SPI:

Furnish the details of income of spouse, minor child, etc., if to be included in your income in accordance with provisions of Chapter V of the Income-tax Act. The income entered into this Schedule has to be included in the respective head.

Schedule-SI:

In this schedule, incomes which is chargeable to tax at special rates shall be auto-calculated from the appropriate columns in schedule BFLA/CYLA or schedule OS.

Schedule-EI:

Furnish the details of income like Agriculture Income, Interest, Dividend etc. which is exempt from tax.

Schedule-PTI:

Fill the below details from business trust or investment fund as per section 115UA, 115UB. 

·         Name of business trust or investment fund.

·         PAN of business trust or investment fund. 

·         Income from House property and TDS on such amount.

·         Income from short-term capital gain and TDS on such amount

·         Income from Long-term capital gain in column number 6 and TDS on such amount

·         Income from other sources in column number 6 and TDS on such amount

·         Income received from business trust or investment fund claimed to be exempt under section 10(23FBB), 10(23FD), etc.

Schedule FSI:

In this Schedule, fill the details of income, which is already included in total income, accruing or arising outside India.

Schedule TR:

In this schedule, fill the taxes paid outside India on the income declared in Schedule FSI which will be the total tax paid of schedule FSI in respect of each country and tax relief available which will be the total tax relief available in schedule FSI in respect of each country.

Schedule FA:

·         This schedule is to be filled up by a resident assessee and not to be filled up by a ‘not ordinarily resident’ or a ‘non-resident’. 

·         Mention the details of foreign bank accounts, financial interest in any entity, details ofØ immovable property or other assets located outside India. 

·         This should also include details of any account located outside India in which the assessee has signing authority, details of trusts created outside India in which you are settlor, beneficiary or trustee.  Under all the heads mention income generated/derived from the asset.

·         The amount of income taxable in your hands and offered in the return is to be filled out under respective columns.

·         Item G includes any other income which has been derived from any source outside India and which has not been included in the items A to F and under the head business of profession in the return.

Schedule 5A:

·         This Schedule is to be filled in case of assessee governed by Portuguese Civil Code. 

·         The share of income of the spouse should be filled in this schedule and the same shouldØ form part of the return of income of the spouse.

Schedule AL:

·         This Schedule is to be filled by individuals and HUFs giving details of properties held by the assessee and the corresponding liabilities. 

·         It is mandatory if your total income exceeds ₹50 lakh. 

·         The assets to be reported will include land, building (Immovable Assets); financial assets  viz. bank deposits, shares and securities, insurance policies, loans and advances given, cash in hand and Jewellery, bullion, vehicles, yachts, boats, aircraft etc. (Movable Assets) and interest held in the asset of a firm or association of persons (AOP) as a partner or member thereof. 

·         In the case of non-resident and resident but not ordinarily resident, the details of assets located in India are to be mentioned.

File your Income Tax Return and Get a call back from our expert for any query related to income tax filing or income tax filing assistance :  https://www.trutax.in/sign-in

Important Income Tax changes in Budget 2018

Feb 1, 2018, was the important day for every Indian taxpayer as our Hon'ble Finance Minister announced the budget 2018 and proposed many changes in personal finance. If you pay taxes then you should know about the latest income tax changes which the Government has announced in the Budget 2018.

Here is the list of important Income Tax updates announced in Budget 2018:

No changes in Income Tax Slabs for Salaried Individuals:

As everyone was expecting the change in Income Tax Slab but the government did not change the Income Tax slab for salaried employees or Individuals. Here is the income tax slab for FY 2018-19:

Hike in Cess on Income Tax from 3% to 4%:

The government has hiked the Cess on income tax from 3% education Cess to 4 % education and health Cess for all the categories of taxpayers.

Removal of Medical Reimbursement and Travel Allowance from Salary:

Budget 2018 has proposed the removal of Medical Reimbursement and Travel Allowance from the Salary. The Government has also announced the standard Deduction of Rs. 40,000 from Salary Income to employees.

10% tax on Long-Term Capital Gains:

This was the most important announcement in Budget 2018 about the Long-Term Capital Gain. The government has Introduced a 10% tax on LTCG (Long-term capital gains) if it exceeds more than Rs. 1 lakh.  Finance Minister also introduced a Dividend Distribution tax on equity oriented Mutual Funds at the rate of 10%.

Hike in Section 80D limit for Senior Citizens:

Finance Minister in Budget 2018 announced a hike in Section 80D limit to Rs. 50,000 from Current Rs. 30,000 for senior citizens.  There is also an exemption of interest income on fixed deposits and post office deposits from Rs. 10,000 to Rs.50, 000 for senior citizens.

Overall Finance Minister has introduced major changes in personal finance like long-term Capital Gain Tax, hike in Section 80D limit for Senior Citizens and exemption of interest income on fixed deposits.

Get a call back from our tax experts for any query related to Budget 2018 or Income Tax:  https://www.trutax.in/askexpert

Understand Defective Return Notice under Section 139 (9)

If you get the Notice under Section 139 (9) then it is about Defective Return Notice. You can get this Income Tax Notice under Section 139 (9) due to various reasons and mistakes done while filing your income tax returns. There is no need to panic about this notice as you just need to understand the reason behind it which you will get through mail by Income Tax Department.

In case if you will get the Defective Return Notice then you just need to correct your mistakes and provide the required information mention on mail while filing your return again within given deadline. You will get 15 days to rectify the errors and file your returns correctly. In case if you ignore this notice and fail to rectify the errors mention by the Income Tax Department then your return will be treated as invalid which can be resulted into serious consequences.

Reasons of Defective Return Notice under Section 139 (9):

- Proof of TDS, Advance Tax and Self Assessment Tax.

- Incorrect Income Details Information.

- Claiming Income Tax Refund without paying full taxes.

- Mismatch name on Income Tax Return and PAN Card.

- Fail to provide copy as proof in case of audit under Section 44AB.

- Incorrect income information under the head “profits and gains”.

- Failure to provide mandatory information in ITR form.

It is very important to rectify these errors and file your income tax return within given deadline.

How to rectify the errors under in Defective Return Notice u/s Section 139 (9)?

The process to submit the response to Defective Return under Section 139 (9) as follows:

-Login to Income Tax e-filing Website: http://www.incometaxindiaefiling.gov.in/.

-Click on “e-file in response to Notice u/s 139 (9).

-You will be redirected to the page where you can check the Defective Return Information.

-If the assesse agree with the specified defective return info then you need to select “Yes” under the column name “Do you agree with defect”. In other case Assess can also select “No” if assesse does not agree with the defective return and mention remarks also to provide information.

-If Assesse is agree with defective return and selected “Yes” then Assesse need to upload the relevant XML Return.

-On successful completion of the response to the defective return assesse can view the success screen and click on “View” link under response column. Assesse can also note down the acknowledge number and date while filing the Return.

Click here to know about the Income Tax notice under Section 143: https://www.trutax.in/income-tax-notice

Income Tax Refund Status

Income Tax Refund starts after processing of income tax returns complete by income tax department. Once taxpayer file the income tax returns and verify it then processing of income tax returns starts by the income tax department.

During the processing of income tax returns department checks whether there is any discrepancy in returns or not. Once it is verified by the income tax department then status of ITR would be “Successfully Verified” or “ITR processed”. You can check this status anytime on e-filing website of Income tax department.

During the processing of income tax returns if department finds any discrepancy in your ITR then it sends the notice to the particular taxpayer.

Read more about the income tax notice in detail here: https://www.trutax.in/income-tax-notice

If in case there is any discrepancy in your returns then you will get the notice under Section 143 which will clearly mention the reason behind it.

Important points to know about the income tax refund status:

1.Refunds are processed in two ways which are direct credit or cheque.

2. In case of direct credit account number and IFSC code mention is mandatory in ITR.

3. If account details are not correct then refund will be processed through cheque payable to the account mention in the ITR.

4. You can check the income tax refund status of your ITR anytime on Income Tax Department website.

5. You need to issue request again on income tax website if refund not credited.

6. You can check the paid refund amount in form 26AS.

How to check Income Tax Refund Status online?

Once you have filed the income tax returns and verify it then income tax department start processing of your ITR. If you want to check the current status of your ITR then you can easily check it on income tax department website.

Steps to check income tax refund status Online:

1. Click on ITR status on right hand side of income tax e-filing website.

2. Once you will click on the “ITR Status” then you will be redirected to new page. Now you need to fill your details on form like PAN number and Acknowledge number

3. After filling all the details, you will be redirected to new page and get your status as “Return Submitted and Verified”.

This is the simplest and easiest way to check your income tax refund status on income tax e-filing website.

Income Tax Return Verification

e-verify tax return is the last and important step of filing income tax returns. Once you file your income tax return then you get 120 days to e-verify your income tax returns. In fail to do so the income tax department will not consider your tax returns for processing and you will not be able to claim income tax refund status.

There should be no reason to not e-verify your returns which has serious consequences. You can e-verify your income tax return easily instead of sending physical ITR-V. But still you have the option of sending physical ITR-V if in case you don’t want to e-verify your returns.

There are 6 simplest and easy options to e-Verify your income tax returns:

1.e-Verify your return using net banking:

• Login to your net banking account.
• Click on income tax e-filing link provided by bank.
• Click on e-verify link against the return to be verified.
• Verified.

2.e-Verify Return using Bank ATM:

• Swipe your ATM card in Bank ATM.
• Click on pin for e-filing.
• EVC received on registered mobile number.
• Login to e-filing portal & select the option to e-verify return using bank ATM.
• Enter your EVC on e-filing portal.
• Verified.

3.e-Verify Return using Bank account number:

• Go to e-filing portal- http://incometaxindiaefiling.gov.in/
• Pre-validate your bank account number.
• Bank account details validated successfully. Click e-verify link, select option to e-verify using bank account details and generate OTP.
• EVC received on registered mobile number.
• Enter your EVC on e-filing portal.
• Verified.

4.e-Verify Return using Aadhaar OTP:

• Go to e-filing portal- http://incometaxindiaefiling.gov.in/
• Link Aadhaar number with PAN.
• Aadhaar successfully linked. Click e-verify link on the screen & select option to e-verify return using Aadhaar OTP.
• Generate OTP. EVC received on registered mobile number.
• Enter your EVC on e-filing portal.
• Verified

5.e-Verify Return using Demat Account Number:

• Go to e-filing portal
• Pre-validate your Demat account number
• Demat account details validated successfully. Click e-verify link, select option to e-verify using Demat account details and generate OTP.
• EVC received on registered mobile number.
• Enter your EVC on e-filing portal.
• Verified

6.e-Verify Return using registered mobile number and mail id. (total Income <=5 lakhs)

• Go to e-filing portal
• Generate EVC
• EVC received on registered mobile number.
• Enter your EVC on e-filing portal.
• Verified.

For more details:https://www.trutax.in/income-tax-return-verification

What is ITR-3 form?

ITR-3 Form:

ITR-3 is a new form introduced this year by the income tax department and substitute of old ITR-4 form which is to be used by individuals and HUFs for filing income tax returns.

Eligibility of ITR-3 Form:

This income tax return form is used by HUFs and individuals which comes under these following categories:

·         Partnership in a firm.

·         Income by a means of interest, salary, bonus, remuneration, commission as a partner.

·         Income through Profits or Gains of business or profession.

Structure of ITR-3 Form:

Part-A: General Information

Part-A-BS: Balance Sheet as on 31^st day of March,2017 of the proprietory business or profession.

Part-A-P & L: Profit and Loss Account for the financial year 2016-17

Part-A-OI: Other Information

Part-A-QD: Quantitative Details

Part-B-TI: Computation of Total Income

Part-B-TTI: Computation of tax liability on total income.

Verification

SCHEDULES OF THE RETURN FORM:

Schedule S: Details of Income from Salary

Schedule HP: Details of Income from house property

Schedule BP: Details of Income from business or profession.

Schedule DPM: Depreciation of plant and Machinery

Schedule DOA: Depreciation on other assets.

Schedule DEP: Summary of depreciation on assets.

Schedule DCG: Deemed Capital gains on sale of depreciable assets

Schedule ESR: Deduction under Section 35 or 35CCC or 35CCD

Schedule CG: Capital Gains

Schedule OS: Income from other sources.

Schedule CYLA: Details of income after set-off of current years losses

Schedule BFLA: Details of income after set-off of brought Forward losses of earlier years.

Schedule CFL: Details of losses to be carried forward to future years.

Schedule UD: Unabsorbed depreciation and allowance under section 35(4)

Schedule ICDS: Effect of income computation Disclosure standards on profit.

Schedule 10A: Deduction under Section 10A

Schedule 10AA: Deduction under Section 10AA

Section 80G: Details of donations entitled for deduction under Section 80G.

Schedule 80-IA

Schedule 80-IB

Schedule 80-IC or 80-IE

Schedule VI-A

Schedule AMT: (Computation of Alternate Minimum Tax payable under section 115JC)

Schedule AMTC: (Computation of tax credit under Section 115JD

Schedule SPI

Schedule SI: (Income chargeable to tax at special rates)

Schedule IF: (Information regarding partnership firms in which you are partner

Schedule EI: Details of Exempt Income

Schedule PTI: Pass through income details from business trust or investment fund as per section 115UA,115UB

Schedule FSI: Details of income from outside India or tax relief

Schedule TR: Summary of tax relief claimed for taxes paid outside India

Schedule FA: Details of foreign assets from any source outside India

Schedule 5A

Schedule AL: Asset and Liability at the end of the year (other than those included in Part-A-BS) (applicable in a case where total income exceeds Rs.50 lakh)