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Major changes introduced in ITR 2 for AY 2020-21

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*Major changes introduced in ITR 2 for AY 2020-21*

ITR  2  for AY 2020-21 is available for e-Filing. Other ITRs will be available shortly, ITR 1 & ITR 4 Already Live*

RNORs and non-resident individuals have to file their income tax return in ITR-2 even in case of total income below Rs 50 lakh.

The taxpayer should disclose 

(a) the amount of cash deposits above Rs 1 crore in the current accounts with a bank,

(b) expenditure incurred above Rs 2 lakh on foreign travel

(c) expenditure incurred above Rs 1 lakh on electricity.

  • Resident individuals who own more than one house property should also file their income tax return in ITR-2.
  • ITR-2 continues to apply to resident individuals who have total income exceeding Rs 50 lakh.
  • Any individual taxpayer having income from business or profession cannot use ITR-2.
  • In case an individual is a director in a company or holds unlisted equity investments, the ‘type of company’ should also be disclosed
  • In case of short-term or long term capital gains from sale of land or building or both, the details of the buyer(s) i.e. name, PAN or Aadhaar, percentage share of ownership and address have to be given.
  • A separate schedule 112A for the calculation of the long-term capital gains on the sale of equity shares or units of a business trust which are liable to STT.
  • Under ‘income from other sources’, a taxpayer should provide the details of ‘any other income’.
  • The details of the deductions against ‘income from other sources’ should be provided.
  • The ‘Schedule VI-A’ for tax deductions is amended to include deduction under section 80EEA and section 80EEB.
  • In the case of a business trust or investment fund, the details of ‘capital gains’ income and ‘dividend’ income should be provided.
  • The details of tax deduction claims for investments or payments or expenditure made between 1 April 2020 until 30 June 2020.
  • While providing the details of bank accounts, if a taxpayer selects multiple bank accounts for credit of refund, the income tax department may choose any account for processing the refund.

*Eligible persons to file ITR 2 for AY 2020-21?*

ITR Form 2 is for Individuals and HUF receiving income other than income from “Profits and Gains from Business or Profession”. Thus persons having income from following sources are eligible to file Form ITR 2:

➡️Income from Salary/Pension

➡️Income from House Property(Income Can be from more than one house property)

➡️Income from Capital Gains/loss on sale of investments/property (Both Short Term and Long Term)

➡️Income from Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling)

➡️Foreign Assets/Foreign Income

➡️Agricultural Income more than Rs 5000

➡️Resident not ordinarily resident and a Non-resident

➡️A Director of any company and an individual who is invested in unlisted equity shares of a company will be required to file their returns in ITR-2.


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