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ITR 2 e-form asks for complete salary break-up; more details required than before

, ET Online|
Updated: Jul 19, 2019, 12.27 PM IST
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A drop down menu giving 17 options such as basic salary, dearness allowance, house rent allowance (HRA), gratuity and so on is provided in the form.

Highlights

  • If the new Form 16 does not provide the break-up, then individuals will have to do a lot of number crunching and collection of figures from various sources such as salary slips etc.
  • If you have invested in the real estate investment trust (REIT) then income from such source will be required to mentioned under the head,'Income from house property'.
The income tax department has released the software utility in excel format for filing ITR2 for FY2018-19. ITR2 is the second most used form to file ITRs (income tax return). It is to be used by individuals having capital gains or more than one house property but not by those individuals having income from business and profession.

The format in which salary details are required to be filled in ITR2 are in sync with the salary heads given in Form 16 (the source of salary information). However, ITR2 asks for salary break up in much more detail than earlier and also in greater detail than given in the Form 16 up till now. It is also not clear as to whether the new Form 16 format will provide such a detailed break up.

If the new Form 16 does not provide the break-up, then individuals will have to do a lot of number crunching and collection of figures from various sources such as salary slips etc. All the allowances received by salaried individuals have to be filed in separately. For this purpose, a drop down menu giving 17 options such as basic salary, dearness allowance, house rent allowance (HRA), gratuity and so on is provided in the form.

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(ITR2 form as available on the Income Tax e-filing website)

Chartered Accountant, Naveen Wadhwa, DGM, taxmann.com says, "Form 16 and Salary Schedule in ITR Forms have been modified with an objective to bring them in sync with each other. The return filing utility of ITR-2 requires the details of most commonly used components of salary, i.e., basic salary, HRA, LTA, Children Education Allowance, etc. However, the notified Form 16 contained only one field for the aggregate amount of salary taxable under Section 17(1). Whether an employer will also be required to provide the details of all these components in the Form 16 shall be cleared when the tax department releases the utility for TDS return for Quarter 4."

Similarly, if you have invested in the real estate investment trust (REIT) then income from such source will be required to mentioned under the head,'Income from house property'.

Wadhwa says, "REIT predominantly earns the rental income and it enjoys pass through status under the Income-tax Act, 1961, whereby income of a REIT is exempt in its hands. However, if such income is distributed by REIT to its unit-holders, then it shall be charged in the hands of the unit-holders and the nature of income shall be the same as in the hands of REIT. Under new ITR forms, the schedule house property has been consequently amended for reporting of pass through income chargeable to tax in the hands of unit-holders. The income will be taxable at the rate applicable to you."

Also Read

E-ITR forms updated post the extension of deadline to file ITR

ITR filing last-minute checklist

ITR filing: Prefilled ITRs now available for all individuals

Prosecution norms eased for TDS, ITR filing defaults

CBDT’s norms for manual ITR scrutiny

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