How to File ITR-2 or ITR-2A Online (AY 2016-17)

DISCLAIMER: This guide is for Assessment Year (AY) 2016-17. Although the information has been checked for correctness, no guarantees are made to that extent. Please verify the information with other sources as well.

For the last several years, I have been writing about how to file your income tax return online with emphasis on ITR-1 (the most common tax return). This year I will be explaining how to file ITR-2 and ITR-2A as well.

As you may know by now, ITR-2A must be filed by those who have the following sources of income:

  • Income from salary
  • Interest income from savings accounts and/or fixed deposits
  • Home loan and/or rental income from one or more house property

However if you have any of the following sources of income or assets, then you must file ITR-2 instead.

  • Capital gains from sale of shares, mutual funds or property
  • Foreign assets, irrespective of whether any income is earned from them or not

Note that if you have any income from a business or profession, then you must file ITR-4 regardless of other sources of income.

The following is the procedure to file ITR-2/2A tax return form. It is assumed that the reader already has an account on the Income Tax Department’s E-filing website.

1. Download and unzip the ITR-2/2A utility

You need to download the appropriate return preparation utility (ITR-2 or 2A) from the Income Tax Department E-filing website based on your source(s) of income. On the home page, click on the appropriate ITR form under the Downloads panel on the right to get to the download page.

You may use either the Excel- or Java-based utility for filing your return. In my blog post I will use the Java-based utility as it is easier to use.

The following are the contents of the ITR-2 Java utility ZIP file (ITR-2A has the same files as well). You need to extract the ZIP file in a folder as shown below, and then double-click on ITR.bat file to launch the Java program (or ITR-*.jar on Linux or Mac OS X).

ITR-2 Utility

2. Open the ITR-2/2A form

The ITR-2/2A return preparation utilities consist of the following tabs:

  • Instructions – Basic instructions to use the utility (pretty much useless!)
  • Home – List of all tabs in the utility. If you are sure that certain provisions or sources of income do not apply to you, you may disable those tabs here to simplify the menu.
  • Part A (General) – All your personal information such as name, PAN number, address, etc. goes here.
  • Part B (TI) * – Your total income computation is displayed here for reference purposes. You do not need to fill anything here.
  • Part B (TTI) – The tax computation for your income is displayed here. You need to enter your bank account details here (excluding dormant ones) and also verify that all the particulars are correct to the best of your knowledge.
  • IT – Any advance tax or self assessment tax paid by you via Challan ITNS-280 must be entered here (one entry per row).
  • TDS – Details of TDS debited from your salary income by your employer as well as TDS debited on your savings accounts and fixed deposits must be entered here (one per row).
  • TCS ** – Details of tax paid by you while purchasing gold bullion or jewellery of value above the specified limit.
  • Schedule S – Details of income from salary
  • Schedule HP – Details of income or loss from house property
  • Schedule CG *** – Details of income from capital gains on sale of shares or mutual funds or property
  • Schedule OS – Details of income from other sources (interest from savings accounts and fixed deposits, etc.)
  • Schedule CYLA * – Details of income after set-off of current year’s losses from capital gains and other sources. You do not need to fill anything here.
  • Schedule BFLA * – Details of income after set-off of brought forward losses of previous years from capital gains and other sources. You do not need to fill anything here.
  • Schedule CFL – Details of losses from capital gains and other sources to be carried forward to future years
  • Schedule VI-A – Deductions under Chapter VI-A. These details would be available in your Form 16.
  • Schedule 80-G – Details of donations made by you to specified charities that qualify for tax benefit under Section 80G.
  • Schedule SPI – Details of income of spouse, minor children, etc. to be included in your income.
  • Schedule SI * – Details of income chargeable at special rates. You do not need to fill anything here.
  • Schedule EI – Details of exempt income (income from interest on PPF accounts, dividends for which DDT has been paid, long term capital gains on which STT is paid, etc.)
  • Schedule PTI – Details of pass-through income from a business trust or investment fund
  • Schedule FSI *** – Details of income from outside India and claim tax relief on the same
  • Schedule TR *,*** – Details of tax relief for tax paid on income outside India. You do not need to fill anything here.
  • Schedule 5A * – Related to taxation of individuals governed under Portuguese Civil Code. I will not be covering this.
  • Schedule FA *** – Details of foreign income or foreign capital assets or financial interest in foreign firms.
  • Schedule AL – Details of movable and immovable assets and liabilities for persons with aggregate income over Rs. 50 lakhs.

* All fields on this tab will be auto-filled. You do not need to fill anything here.
** This tab is not present in ITR-2
*** This tab is not present in ITR-2A

On several tabs, there will be some fields that need to be filled in by you and others that are greyed out or green in color. You only need to fill the white fields. The grey and green fields will be filled in automatically depending on the values entered in other fields.

ITR-2 menus

3. Fill the ITR-2/2A form

Before we start filling the form, we can auto-fill the known fields in the ITR by clicking on the Pre-fill button on the top panel. This will fill the known fields such as your personal details (from your PAN records or previous ITR filed) and your salary and TDS details from your Form 26 AS. Do check and confirm that the details and figures entered are correct, however.

ITR-1 prefill

You can also save the data entered if you wish to quit and continue later. To do so, click on the “Save” or “Save draft” buttons at the top and save the XML or .draft files generated.

Now let’s see how to fill each tab one by one.

a. “Part A – General” tab:

In the Personal Information section, fill in the requested personal details. Do ensure that your PAN number, mobile number and E-mail ID are entered correctly. You can leave the “Income Tax Ward/Circle” field blank. You may provide your Aadhaar and Passport number if applicable. Also select your employment category (Govt./PSU/Others).

Fill the Filing Status section appropriately as follows:

  • Select Return filed as “11 – On Or Before Due Date” assuming you are filing the return before the due date. Otherwise select “12 – After Due Date”. If you are filing a return in response to a tax notice, select the appropriate option and mention the notice number below.
  • If you are filing tax returns for the first time this year then select “Original” return, otherwise select “Revised” return and mention the original return’s acknowledgement number and date.
  • Specify your residential status (Resident/NRI).

b. “Part B – TI” tab:

Nothing to be filled here.

c. “Part B – TTI” tab:

In the Refund section, enter the total number of bank accounts held by you (excluding dormant ones) and specify the IFSC code, account numbers and account type of all of them. The first account should be the one where you wish to receive your tax refund (if applicable).

In Row 15, enter “Yes” if you have any foreign assets and/or income. This will enable entries in Schedule FA.

In the Verification section, acknowledge that all particulars entered by you are accurate.

d. “IT” tab:

Here, enter the details of any advance tax or self-assessment tax paid by you (one entry per row). The details should match with that in your Form 26 AS. This section will be auto-filled if this option is selected.

e. “TDS” tab:

Here, enter the details of TDS deducted by your employer or banks on your salary and interest income respectively. The details should match with that in your Form 26AS. This section will be auto-filled if pre-fill option is selected.

f. “TCS” tab:

Here, enter the details of tax paid by you while purchasing gold bullion or jewellery of value above the specified limit (as per the Form 27D issued by the shopkeeper/seller). This section will be auto-filled if pre-fill option is selected. Note that in ITR-2 this table is part of TDS tab itself.

g. “Schedule S” tab:

Here, enter the details of your employer (name, PAN and address) and your income from salary, excluding perquisites listed in Form 12BA (given along with Form 16) and allowances under Section 10 (HRA, conveyance allowance, medical reimbursement, etc.) and professional tax under Section 16. The total should come up to your “Income chargeable under the head ‘salaries'” as per your Form 16.

Then enter the exclusions individually in the respective fields. The individual amounts would be listed in your Form 16.

h. “Schedule HP” tab:

Here, enter your income or loss from one or more house property owned by you.

  • The income would include earnings from rent for properties that are let out:
    • Enter rental income earned in 1(a)
    • Enter rental income due but not received in 1(b)
    • Enter property tax paid to the municipal corporation in 1(c) as this expense qualifies for tax deduction in case of rented properties.
  • The loss would include interest outgo on any home loan taken on the property:
    • Enter interest component of home loan in 1(h) (up to Rs. 2 lakhs for self-occupied and actual value for let out properties). Principal component of home loan need not be entered here as it would be covered under Section 80C.

Repeat this for all properties owned by you.

You can get the interest and principal components of your home loan repayment from your Final Home Loan Interest Certificate for the last year which you can get from the bank.

i. “Schedule CG” tab:

Here, enter the details of short term and long term capital gains earned by you on the sale of property, shares, mutual funds, etc. The details are to be entered as follows:

  • Short term capital gains (STCG) on sale of property to be entered in A1
    • Purchase value to be entered in (bi)
    • Expenses on home improvement and/or renovation in (bii)
    • Expenses on sale of property (legal fees, taxes, transfer charges, etc.) in (biii)
    • Sale value to be entered in (ai)
  • STCG on sale of listed shares or equity-oriented mutual funds to be entered in A2
    • Purchase value to be entered in (bi)
    • Sale value to be entered in (a) (excluding brokerage, commission, etc.)
  • STCG on sale of unlisted shares (e.g. RSUs, ESOPs or shares listed on foreign stock exchanges) to be entered in A5
    • Purchase value (converted to Indian Rupees) to be entered in (bi)
    • Sale value (converted to Indian Rupees) to be entered in (a) (excluding brokerage, commission, etc.)
  • Long term capital gains (LTCG) on sale of property to be entered in B1
    • Purchase value (with indexation) to be entered in (bi)
    • Expenses on home improvement and/or renovation (with indexation) in (bii)
    • Expenses on sale of property (with indexation) in (biii)
    • Sale value to be entered in (ai)
  • LTCG on sale of debt-oriented mutual funds to be entered in B2
    • Purchase value to be entered in (bi)
    • Sale value to be entered in (a) (excluding brokerage, commission, etc.)
  • LTCG on sale of unlisted shares to be entered in B7
    • Purchase value to be entered in (bi)
    • Sale value to be entered in (a) (excluding brokerage, commission, etc.)

NOTE:

  • Listed shares are those that are listed on Indian stock exchanges and on whose sale Securities & Transaction Tax (STT) is paid. These could be RSUs/ESOPs given by your employer or shares purchased by you directly on foreign stock exchanges.
  • Unlisted shares are those that are not listed on Indian exchanges and whose sale does not attract STT. These may be shares of Indian or foreign companies.

The tax slab for various instruments is as follows:

Type of assetPeriod for attracting LTCGTax on STCG
Tax on LTCG
Listed shares1 year15%0% (tax free)
Equity mutual funds1 year15%0% (tax free)
Debt mutual funds3 yearsAdded to taxable income20% with indexation
Unlisted shares3 yearsAdded to taxable income20% with indexation
Property3 yearsAdded to taxable income20% with indexation

The above table is only for reference purposes. As long as you enter the values in the appropriate fields, the utility will take care of calculating the tax and you do not need to do anything. For more details, refer to this link.

For details on what expenses can be deducted from sale price of property or shares or bonds while calculating capital gains, refer to this link.

j. “Schedule OS” tab:

Here, enter details of your income from other sources such as:

  • Dividend income which is not tax-free in 1(a) (such as dividends from foreign shares)
  • Interest income from savings accounts and fixed deposits in 1(b)
  • Other income such as income from royalty, technical services rendered, lotteries, etc. in 1(c) or 1(d). Even Google AdSense income can be declared here provided it is not substantial (if so, use ITR-4 instead)

As for interest income, you can get the details from your bank statements and Form 16A. You can also get the details from your Form 26AS in case TDS has been deducted on this income.

You must add the total interest earned on all your bank accounts plus fixed deposits and enter it here. Note that you will get a deduction of up to Rs. 10,000 on interest earned on savings accounts under Section 80TTA (to be declared in “Schedule VI-A” tab later).

You may also claim deductions towards any expenditure incurred on earning the above income in 1(hi) and 1(hii).

h. “Schedule CYLA” tab:

This tab has details of total income after set-off of any losses from capital gains and other sources in the current year. You do not need to fill anything here.

i. “Schedule BFLA” tab:

This tab has details of total income after set-off of losses from capital gains and other sources brought forward from previous years. You do not need to fill anything here.

j. “Schedule CFL” tab:

This tab has details of losses from capital gains and other sources to be carried forward to future years. This tab would also be filled automatically if the pre-fill option is chosen.

k. “Schedule VI-A” tab:

Here, you must enter the details of deductions under Chapter VI-A as listed in your Form 16. In case you have forgotten to claim a deduction through your employer, you may claim the same now.

Some notable deductions are:



  • 80C – EPF/PPF contribution, life insurance premium, home loan principal, etc.
  • 80D – Premium paid for medical / health insurance
  • 80G – Donation to specified charities (populated automatically from Schedule 80G)
  • 80TTA – Deduction up to Rs. 10,000 on interest earned on savings bank accounts

For a complete list of deductions, please refer to this link.

l. “Schedule 80G” tab:

Here, you need to declare any donations made by you to notified charities or entities that enjoy tax exemption under Section 80G of the IT Act. Depending on the nature of the entity, you may be eligible for tax deduction on 50 – 100% of the amount contributed. To determine the degree of exemption your contribution qualifies for, refer to this link. If still doubts persist, call the entity and check.

You must enter the donation details in one of the four tables (A, B, C or D) based on the exemption category that it qualifies for. Most private NGOs/charities fall under Table D (50% exemption with qualifying limit). Govt. run funds like Prime Minister’s Relief Fund, etc. fall under Table A (100% exemption without qualifying limit).

NOTE: You are eligible for tax benefit on donations only up to 10% of your gross total income. Any amount exceeding this limit will not be tax deductible. Refer to this link for details.

m. “Schedule SPI” tab:

Under certain conditions, your spouse and/or minor child’s income must be added to your income. For details, refer to this link. I will skip this part.

n. “Schedule SI” tab:

Details of incomes claimed by you that are chargeable to tax at special rates will be listed here. You do not need to fill in anything here.

o. “Schedule EI” tab:

Details of income earned by you that is fully exempt from income tax must be entered here. This includes:

  • Interest income from specified instruments (such as PPF) in 1
  • Dividend income (on which Dividend Declaration Tax has been paid) in 2
  • Long Term Capital Gains on sale of listed shares and equity mutual funds in 3

For the complete list of incomes that are fully tax exempt, click here.

p. “Schedule PTI” tab:

I will skip this tab. Please refer to alternate sources for details.

q. “Schedule FSI” tab:

Details of income earned outside India from salary, capital gains, house property, etc. and tax paid abroad on the same must be entered here (in Indian Rupees).

r. “Schedule TR” tab:

Details of tax relief claimed on tax already paid on foreign incomes will be shown here. You do not need to enter anything here.

s. “Schedule 5A” tab:

This is applicable only for individuals governed by Portuguese Civil Code. I will skip this tab.

t. “Schedule FA” tab:

Details of all foreign assets and any foreign income earned from business or sale of assets should be reported here as follows:

  • Details of foreign bank accounts to be reported in A
  • Details of RSUs granted/vested, ESOPs exercised and/or ESPPs purchased must be listed in B (Details of Financial Interest in any Entity) as follows:
    • There must be one entry for each purchase, exercise or grant. If RSUs/ESOPs/ESPPs are acquired in batches then there must be one entry per batch.
    • “Total investment (at cost)” must be purchase cost of shares. This is the market price at the time of vesting/exercise/purchase of RSUs/ESOPs/ESPPs respectively, multiplied by number of shares granted/exercised/purchased.
    • If not sold yet, then “Income derived from asset” must be 0 and subsequent fields must be “Not applicable” or blank.
    • If sold, then “Income derived from asset” and “Income taxable and offered in this return” must be the sale value (in Indian Rupees), “Schedule where offered” must be “Schedule CG” and “Item number” must be A5 or B7 (based on whether the sale qualifies for STCG or LTCG).
  • Details of immovable property owned abroad must be listed in C
  • Details of other capital assets owned abroad must be listed in D
  • Foreign income from business or profession as well as any other foreign income must be listed in G

Schedule FASchedule FA

NOTE: For more details on how to declare income or loss foreign shares/RSUs/ESOPs, refer to this blog post.

u. “Schedule AL” tab:

Details of movable and immovable assets and liabilities for persons with aggregate income over Rs. 50 lakhs must be declared here.

4. Check if additional taxes are due

After all the details are entered, you must go back to “Part B – TTI” tab and check Row 12 (Amount payable). This must be 0. If so, you may proceed directly to Step 7. If not, then you need to pay additional tax to cover the deficit as explained below.

5. Pay balance taxes (and penalties) if applicable

If you need to make any additional tax payments over and above what has already been paid, you can do so as follows:

a. Go to the Online E-Tax Payment System at https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp.

b. Click on “Challan No./ITNS-280” (Payment of income tax). On the next page, select the following:



– Tax applicable: (0021) Income tax – other than Companies
– Type of payment: (300) Self-assessment tax

c. Enter your other details (name, address, PAN number, etc.), choose your bank from the list and click on “Proceed” at the bottom. You will be taken to your bank’s website for payment.

d. On the payment page, enter the balance tax amount and pay it.

e. On completion of payment, you will be shown the “E-challan” (e-receipt) for your payment. Save it on your computer and take a printout for your records.

6. Update the ITR form and recalculate tax

After paying the balance tax, you must go to “IT” tab and enter the BSR code, date of payment, serial number and amount of tax paid from the challan into the IT table. You must enter one challan per row if you have made more than one payment.

Once done, click on “Re-Calculate” button again. Now, the value in Row 12 must be zero, indicating that no additional tax is payable.

7. Submit ITR form

After verifying that all data entered by you is correct and no additional tax is payable, click on “Submit” button at the top to upload your return to the IT Dept. E-filing website. With this, your income tax return is submitted. You will shown a confirmation prompt upon successful submission and asked to download the ITR-V file which you must do.

8. E-verify the ITR submission

Since last year, the IT Dept. has launched an e-verification option which eliminates the need to send the ITR-V by post after uploading the ITR. Now the ITR uploaded can be instantly verified online as follows:

  • For those having an Aadhaar number linked to their PAN records, an OTP will be generated and sent to the mobile number in your Aadhaar record. You can then enter the OTP and verify your ITR submission.
  • For those who don’t have a linked Aadhaar number, they can login to internet banking of any of their bank accounts and then click on Income Tax E-Filing option in their netbanking website to return to the IT Dept. E-filing website and e-verify the ITR submission.

ITR e-verification

For detailed steps to e-verify your IT return, check this link.

Once the ITR is e-verified, an ITR Acknowledgement will be generated. You must download and save it for reference along with the ITR-V.

With this, your IT return submission process is complete!

NOTE: Both the ITR-V and Acknowledgement PDF files are password-protected. To open them, enter your PAN number (in lowercase) followed by date of birth (in ddmmyyyy format) as the password.

Please take a minute to verify that all the entries in the ITR Acknowledgement are correct. If not, you may need to file a revised return with necessary corrections.

Useful Links:


Signature

56 Comments

  1. sandeepsandeep08-05-2016

    Hi Vijay,

    I have one question while filling ITR2. From 2010 to 2013, I suffered STCL of 1000, 1200, 500,2500 respectively. In 2015 I made a profit of 2900. So in last year ITR, in CFL tab of ITR2 it was 2300 losses to be carried forward to next future years. Now in this year FY 2015-16 again I am entering same values of previous years losses. So it is showing altogether previous years losses only. I am not getting how to capture last year profit or how to subtract that profit from previous year losses. Please help me..

    Regards,
    Sandeep

  2. RaviRavi08-04-2016

    Hi

    my company stock allotted in 2011 @ 18$ .. I have neither exercised not sold the shares ..
    My share statement says Exercised or cancelled as “0 ”
    XX $ as current value of the vested options ( Difference between 18$ and the current value of the share * No of shares )
    What should i capture in Column B of TR_ FA in ITR2..

    NAture of Interest — Direct

    Total investment @cost – # of shares * 18$ * exchange rate @ 2011 ( Do i need to declare this if i have not purchased the shares ?? )
    OR shoud I multiply by current exchange rate

    Income Accrued from the interest – 0

    All other columns are NA ..

    Can you please verify this and confirm

  3. SNSN08-03-2016

    Where do I report interest Income received in a foreign bank account. Do I need to pay tax on this Interest

  4. Madhusudan SardaMadhusudan Sarda08-01-2016

    Thanks Vijay, Your blog has been really helpful. You have explained things very clearly and yet concise enough. Great work!

  5. ShreelanShreelan07-31-2016

    Thanks for providing this good info.

    I have a query regarding RSU. Should we declare unvested RSU in section B of schedule FA?
    What is the meaning of declaring it if cost of investment is zero?

  6. anuraganurag07-30-2016

    Hi!

    I have a query regarding RSUs:
    If total 100 RSUs are vested, company keeps 30 of them and only transfers 70 to my account.
    So in FA section B, under “Total Investment (at cost)”, should price of 70 shares should be mentioned or for 100 shares. I am guessing for 100 shares – because perquisites will also mention about 100 shares, but will be great if you can confirm this once.

    • Vijay PadiyarVijay Padiyar07-30-2016

      It depends on number of shares you have. If you choose “Sell to cover” option then you will have 70 shares left, so investment will be (70 * number of shares). If you pay tax from your pocket then you would have all 100 shares left and so investment will be (100 * number of shares).

      • anuraganurag07-30-2016

        Hi,

        Thanks for the reply. Yes it is “sell to cover” in my case. So I need to mention only remaining shares. I have one more query. If I got some X shares in last FY and also sold them all in the same FY, so I need to even mention it in FA? Note that, it will be mentioned in perquisites and also I will be mentioning the profit earned by selling the shares in CG section.

        Thanks for the help.

      • Ajay SAjay S07-31-2016

        Hi Vijay
        First of all thanks for your posts that bring so much clarity on not so clear aspects of ITR-2 filing.
        Talking of example above, irrespective of whether it is “sell to cover”, shouldn’t it still be 100*Stock Price because essentially even if it is sell to cover, stocks are sold on owners behalf. Moreover why the approach opted to settle tax (sell to cover or something else) should change the value mention in this field?

        Thanks

  7. GajendraGajendra07-30-2016

    Thank you!! It was very helpful.

  8. AbhishekAbhishek07-29-2016

    HI, Under schedule FA., you mentioned that the “Total investment (at cost)” must be purchase cost of shares. For RSU this comes from the “perquisites” in form 12BA. For ESPP this value is the market price at the time of exercise/purchase multiplied by number of shares.

    My question is , why do we have to use the value of “perquisite” for RSU and not FMV * no. of RSU ? Can you pls. elaborate on this a bit ? Is it because the only investment we make to get the RSU’s is the perquisite tax paid ?

    • Vijay PadiyarVijay Padiyar07-30-2016

      Yes you are right, it should be same formula for RSUs too. I have updated the section.

  9. actiniumactinium07-29-2016

    Hi Vijay,

    You wrote:
    * Details of RSUs granted that are not vested yet must be listed in B (Details of Financial Interest in any Entity)
    * Details of RSUs granted and vested, ESOPs, other shares held, etc. must be listed in D (Details of any other Capital Asset held).

    From what I can tell from ITR 2 2016 filling instructions at http://www.incometaxindia.gov.in/Supporting Files/2016/InstructionITR2_2016.pdf, all kind of ‘shares’ are to be reported in Section B (see Pg 8 -> (q) -> (iii) -> (B) -> (2) -> (ii) => “if the owner of record is a corporation in which the resident owns, directly or indirectly, any share”). Thus, it seems ‘all’ form of equity held via stocks listed outside Indian Stock Exchange are to be included in Section B.

    Would please share the rationale behind your suggestion of including every other equity apart from unvested RSUs (viz. ESOPs, ESPPs, vested RSUs, or even stocks purchased directly via portals like etrade.com) in Section D (instead of Section B)?

    • Vijay PadiyarVijay Padiyar07-29-2016

      You are right. I have been informed this by a tax expert too. I shall update the relevant portion.

  10. AmitAmit07-29-2016

    Thanks Vijay for the detailed information.
    I have one doubt about ESPP and its FA declaration for the case when ESPP were sold in the current F.Y.

    You have mentioned that
    “If sold, then ‘Income derived from asset’ and ‘Income taxable and offered in this return’ must be the sale value (in Indian Rupees)”

    However, from the field name – ‘Income taxable’, it seems that it should be net gain, and not the sale value. Is my understanding correct?

    Thanks in advance.

    Amit

    • Vijay PadiyarVijay Padiyar07-29-2016

      As per my understanding it should be net sale value. In any case this is a declaration and the values entered are not used directly for calculating tax.

  11. Rishi BhatiaRishi Bhatia07-29-2016

    Have some questions -:
    1) As per the instructions for ITR2 for AY 2016-17 (goo.gl/XpgfRB), it mentions “shall not include stock-in-trade” (Under Point q, iii (D)). Does this means that ESPP/ RSU’s are not needed to be shown in Schedule FA – D but in Schedule FA – B
    2) Income Accrued From such Interest – This is generally same as the perquisites mentioned in Form 12B. So should this be filled as 0 or as the perquisite value mentioned in Form 12B.
    3) For Dividend from the above stocks – Should go under Schedule FSI (if the tax is already deducted in the foreign brokerage account also) and then a relief should be taken under the schedule TR – Correct me if I’m wrong here.

    • Vijay PadiyarVijay Padiyar07-29-2016

      1) This portion has been corrected now. All foreign shares (vested/unvested/exercised) are to be shown in B.
      2) Please refer: http://www.vijaypadiyar.in/blog/2016/07/meaning-taxation-of-rsus-esops-and-espps
      3) No it should go in “Dividend income” in Schedule OS tab.

      • Ajay SAjay S07-31-2016

        Hi Vijay

        If we declare all (vested/unvested/exercised) stocks in B, how would the entries for vested vs unvested stocks look like in Schedule FA? What could be the rationale behind declaring unvested stocks?

        Thanks

  12. AnkitAnkit07-28-2016

    Hello Vijay,

    I got a bit tricky situation.

    I have 100 RSU which vested in Aug.
    FMV = 50
    Perquisite value = 100*50*SBI TT in form 16 12B

    In US value of share was $35, etrade sold 32 shares and creditted 32*35*SBI TT as tax to india.
    But in India tax required was 0.309*100*50*SBI TT . Extra i.e (50-35)*32*SBI TT was deducted from Payroll

    Now I have 68 shares.

    I sold 50 of them at $45 in dec . FMV was $40. What is the Capital gain or Loss?

    • Vijay PadiyarVijay Padiyar07-29-2016

      If shares vested at $50 and sold at $45 then it’s a capital loss of $5 * 50.

  13. PrakharPrakhar07-28-2016

    Awesome Blog!

  14. HemantHemant07-27-2016

    Hi Vijay,

    Thanks for the nice blog. I am confused regarding RSUs, I have read you another blog too but it is not clear regarding this case:

    Got some RSUs as perquisites whose value is Rs1000 in 12B form16
    I didn’t sell them but TDS was deducted as perquisite tax.

    What should I fill in schedule FA part D
    Total Investment = Rs1000
    Income accrued = 0
    Nature of Income = NA
    Income taxable&shwn in return
    amount = 1000rs (because it is already taxed in this return)
    Schedule.offered = Schedule S(perquisites were shown here)
    ItemNo = 4

    I have filed like this, I am confused now.. Is it correct. Thanks in advance for taking so much pain in explaining this complex ITR filling.

    • Vijay PadiyarVijay Padiyar07-27-2016

      “Income taxable” field is applicable only when “income accrued” is not zero. In your case you can leave all those fields blank.

  15. SonulSonul07-27-2016

    One question more:
    I have ESOP with exercise price $8 and FMV $20 and sale price $30. 100 shares
    Perquisite shown in Form16 12B = (20-8)*100*SBI TT which I filled in Schedule S
    Tax was deducted as perquisite tax for 100 shares as (20-8)*100*SBI TT
    Rest of the tax was paid as capital gain tax by me.

    So in Schedule CG,
    5a Full Value of Consideration = (30-8)*100*SBI TT
    5bi Cost of acquisition = (20-8) *100 *SBI TT

    Schedule FA Part D
    total Investment at cost = (20-8)*100*SBI TT
    Income Accrued = (30-8)*100*SBI TT
    Income Taxable and offered in this return
    amount = Income accrued
    Schedule Where offered = Schedule S + Schedule CG
    Item No. = Part 4 + Part A5.

    Is this fine??
    Please correct me if wrong.

    • Vijay PadiyarVijay Padiyar07-27-2016

      5a Full Value of Consideration = 30*100*SBI TT
      5bi Cost of acquisition = 20*100 *SBI TT

      Schedule FA Part D
      total Investment at cost = 20*100*SBI TT
      Income Accrued = 30*100*SBI TT

      This will not change your tax liability however as the capital gain remains the same.

      • SonulSonul07-27-2016

        Thanks Vijay. Just a second confirmation. $8 is the price at which shares are alotted to me. Why should I consider it in my Cost of acquisition and Total investment at cost. I know capital gain remains the same but it is not shown in my Form 16 12B as perquisite. Perquisite is shown only the difference what comes to me $(20-8)*100* SBI TT.

        Thanks for such a nice article.

        • Vijay PadiyarVijay Padiyar07-28-2016

          You paid $8, rest was perquisite from company. All adds up to cost of acquisition.

  16. ArunArun07-27-2016

    Hi Vijay,

    For reporting ESOPs in Schedule FA, you say that Investment amount is same as perquisite.
    I am confused here. Please consider a same-day sale ESOP for 1 share, where Grant price = 10$, FMV=50$ and Sale Price = 60$.
    Here Perquisite = (50 – 10) = 40$
    And CG = (60 – 50) = 10$
    Isn’t the total investment equal to the total FMV of 50$ and not the perquisite of 40$?

    • Vijay PadiyarVijay Padiyar07-27-2016

      You are right. That portion was initially written keeping only RSUs in mind. I will revise it for ESOPs/ESPPs as well.

      • ArunArun07-28-2016

        Cool, thanks a lot for the quick reply.
        Also, if that is the case, will Income Accrued = Sale price, and Income taxable = Perquisite + Capital Gain on sale? i.e., in my example, should Income Accrued = 60$, and income taxable will be 50$?
        If yes, when we specify schedule and section where offered, shouldn’t we mention both Schedule S section 4(Perquisite) and Schedule CG Section 5 ( Applicable Rates)?

        • ArunArun07-28-2016

          Hey Vijay,
          Just wanted to clarify something, in the examples I talk about, I am doing a same-day sale. So, I never really owned any shares, and did not pay the option price. Since the sale is immediate, the broker just cashed out the proceeds of (Sale price – Option price). Of the proceeds 30.9% of (FMV-Option price) was TDSed as perquisite tax by my employer in India, and then I paid STCG tax myself for the (Sale price – FMV) at 30%. So, I was wondering, since I never really held the shares, do i really need to declare in Schedule FA-Section D?

          If I need to declare it, please clear up the question in the previous question, because I am worried I might be reporting extra income “Income Accrued” / “IncomeTaxable”.
          Explanation:
          If I report, Income Accrued = Income Taxable = Total Sale price I am reporting extra since the Option price was never an income, only ( Sale Price – Option Price ) was an income.
          And in that income, ( FMV-Option) price was offered as Schedule S-Section4(perquisites) and the rest (Sale price – FMV) was offered up in Schedule CG-Section4 (STCG at applicable rates).

          Have I got something wrong here?

          • Vijay PadiyarVijay Padiyar07-29-2016

            Yes you need to declare it even if it was a same day sale. Note that Schedule FA is only a declaration and values are not used for calculating tax. You need to report net purchase price (including option price) and net sale price. Since option price is included in both the CG will be same as before.

        • Vijay PadiyarVijay Padiyar07-29-2016

          As per my understanding both income accrued and taxable should be same amount. You need to mention only Schedule CG.

  17. Nita SoniNita Soni07-26-2016

    Very well explained, your blog is very useful. I have short term capital gain and long term capital loss from sale of shares in BSE/NSE on which I paid STT. Where should I fill information regarding long term capital loss and can that be offset or deducted from income in current assessment year or in future?

    • Vijay PadiyarVijay Padiyar07-27-2016

      You have to declare purchase and sale price of shares in “Schedule CG”, system will automatically calculate profit or loss. Loss can be offset against gains in the current year or carried forward for the next 8 years and offset against future capital gains. See: http://www.charteredclub.com/capital-loss/

  18. FernsFerns07-25-2016

    HI,

    I have stock in US company listed on NASDAQ bought via ESPP. When are these stock classified as Long term. Also, am not sure whether this should be classified as listed or unlisted stock.

    • Vijay PadiyarVijay Padiyar07-25-2016

      Both your questions are answered in my blog post. Please go through it.

  19. monumonu07-23-2016

    Hi,
    Thanks for nice explanation.

    One small question, RSU’s that are vested and tax has already been duducted and yet not sold. How to mention them?

    Country code is fine.
    Nature of asset for RSU ?
    Investment@cost ?
    Income derived from Asset?
    Nature of income?
    Income taxable and offered in this return : Amount ? Schedule where offered? Item number of schedule ?

    • Vijay PadiyarVijay Padiyar07-24-2016

      Read the earlier comments. Nature of asset can be RSU. Investment, income, etc. is 0. Rest of the fields can be blank.

  20. Divakar CanchiDivakar Canchi07-23-2016

    What about payments received as survival benefit in money back life insurance policies . The payment is part of the premium as the bonus or earning is at the maturity of the policy. Ex : the policy term is 12 years. One gets 20% of the sum assured after 3,6and 9years and at the end of the term get the remaining 40% plus bonus.
    Sum assured: 6 lakhs
    Premium: 1lakh
    At the end of 3 years one gets back 1.2l. 2% tax is deducted as the payment exceeds 1lakh. Obvious it is not an earning. At this time you would have paid 4l from the money for which you have already paid tax.
    This would mean double taxation , is it not?
    The question is in itr1 form can it be shown as zero income from other sources. This would show mismatch with 26AS.

  21. RajeshRajesh07-22-2016

    Really nice article.

    One clarification, RSUs that are not yet vested and ESOPs that are not yet exercised are to be declared under “Detail of Financial Interest in any Entity”. Correct?

    In this relation can you please explain what values are supposed to be put in the respective columns?

    • Vijay PadiyarVijay Padiyar07-22-2016

      To the best of my knowledge, yes. Investment and income you can put 0.

  22. PrakharPrakhar07-19-2016

    hi Vijay,
    Thanks for such a nice explanation. Some questions below:
    1. I have some RSUs vested in FY 15-16(foreign shares on NASDAQ). Tax was deducted in US at the point of vesting as a result of which some shares were sold to recover it automatically by the etrade. The time at which shares vested FMV(fair market value) was 80$ and tax was deducted accordingly. But when I sold them at a price 68$ incurring loss. I have mention the purchase price and sale price in Schedule CG A5. Still I am unable to fill details in Schedule FA. It is all grey.
    Just to give exact overview. I had 100 RSU that vested in September 2015. At that point of time 31 shares were sold automatically to recover the taxes. At that point price was 80$. When I sold the reamaining 69 shares price was 68$. How should I fill this in Schedule CG and Schedule FA. I have other shares too which are vested but yet not sold?

    Thanks in advance for helping.

    • Vijay PadiyarVijay Padiyar07-20-2016

      You have to select “Yes” in Row 15 on “Part B – TTI” page for “Schedule FA” entries to be enabled. How to fill Schedule CG and Schedule FA is already explained. You have to fill the purchase cost ($80 x 69) and sale income ($68 x 69) in both Schedule FA and CG. Capital gain loss will automatically be calculated by ITR and can be adjusted against other capital gains either this year or in future years.

      • PrakharPrakhar07-23-2016

        Thanks Vijay for explaining. I have one more question about RSU vesting and tax.
        I have 25 shares that got vested on 15Feb and tax was deducted at source. As part of TDS, 9 shares were sold adhoc. I still have 16 shares with me.

        Share Price in US on 15 Feb = $71.3
        Total value of shares = 25*$71.3
        Tax deducted in US = $551.72 (by selling 9 shares)
        Price of 9 shares in US = 9*$71.3 = $641.7
        Brokerage charges = $20.08
        rest of the amount = $69.88 was credited in account.

        In India, FMV by merchant banker = $62.32
        My statement shows Net value in India = Rs 102439
        Tax to be deducted = Rs3 1654
        Actual Tax deduted by US in Rs = Rs36711

        Additional Tax deducted = 5057.

        Please help me to calculate capital gain/loss.

        • Vijay PadiyarVijay Padiyar07-24-2016

          Where is the question of capital gain? You have not sold the remaining shares, so there is no capital gain/loss. The income from vesting is treated as a perquisite and tax liability on the same will be automatically taken care of. You do not need to do anything.

      • PrakharPrakhar07-23-2016

        Sorry ignore the below comments and don’t approve them 😛 Earlier I got confused, now its clear. The extra tax deducted in US has been adjusted in payroll.

  23. Venkoba Rao MVenkoba Rao M07-19-2016

    sir,
    I have Dividend income from RSUs/ESOPs and also short term capital gain on these shares. I have to fill Schedule FA under Item D i.e.Details of any other Capital Asset held at any time during the previous year as both Dividend Income and capital gain are income. ITR 2 will not allow to fill both the income in Schedule FA item D. Please cl clarify how to fill this schedule.

    • Vijay PadiyarVijay Padiyar07-19-2016

      Your “income derived from asset” has to be total of sale price (if sold) and dividend earned. The sale income has to be accounted in Schedule CG and dividend income in Schedule OS. As for “Schedule where offered” in Schedule FA, you may write “Schedule CG and OS” and item numbers of respective entries.

  24. AvirupAvirup07-18-2016

    Thank you very much.

  25. Kamal ThadaniKamal Thadani07-15-2016

    Thanks ! Explained clearly.

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