The Central Board of Direct Taxes (CBDT) has recently introduced the ITR-2A form as an addition to the form list comprising ITR-1 and ITR-2 forms. Here’s an attempt to clarify the applicability of each form to enable a smoother tax filing and processing:
- This form is for those who draw a fixed salary income and own one house property. If an individual earns income from other sources such as capital gains or from lotteries, this form won’t be applicable. It’s also not for a person with an agricultural income of over Rs. 5,000.
- This form is for salaried individuals owning more than one house and those who have earned capital gains during the financial year. It’s quite widely applicable, in that it can be also used by people with agricultural income exceeding Rs. 5,000 and with capital gains during the year. Even those with capital losses brought forward or with income from race horses and lotteries can use this form. The only exclusion is income from a business or partnership.
- This new form aims to provide relief to those who draw salaries, own more than one house property but have not incurred capital gains. Earlier, they were required to file taxes using the lengthy ITR-2 even if they did not earn any capital gain. Although the new form excludes people having made capital gains, it includes those taxpayers having earned long-term capital gains from sale of shares provided they have duly paid the Securities Transaction Tax (STT) on the share sale. ITR-2A does not apply to resident Indians drawing income from sources outside India or having assets outside India.