ITR 2 Salary Break-Up AY 2025-26 – Details For New ITR-2 Filing

If you have a salary income and your total income is more than Rs. 50 lakh then you must file your income tax return using ITR-2 form. You will have to fill out the different salary components as required by the department.

Let’s understand the breakup of the salary components required in filing the ITR-2 form for FY 2024-25 (AY 2025-26):

Break-Up Of Salary Components To Be Reported In ITR-2 For FY 2024-25

For the AY 2025-26, the ITR-2 form requires a taxpayer to provide the break-up or the components of the salary.

The various components of the salary for which information is required are mentioned below:

Salary under Section 17(1)

The salary structure comprises several components such as Basic Salary, House Rent Allowance (HRA), Leave Travel Allowance (LTA), Gratuity, and other allowances like medical, conveyance, and special allowances. Each allowance must be reported separately in the ITR. While these are taxable, certain allowances like HRA and LTA are partially or fully exempt under the Income Tax Act, if conditions are met. Employers typically provide these to cover specific expenses and reduce tax liability for employees.

For example:

Mr A earns income from salary. His salary consists of the below components. Notice that some portion of the allowance received is exempt from tax. These allowances and their exempt portion will now be reported separately in ITR.

Information about the various exempt allowances provided to an employee can be found in Part B of Form 16, as depicted below :

Once you upload your Form 16 on the ClearTax portal, your ITR-2 will be automatically filled with the required information.

Perquisites under Section 17(2) 

Perquisites are non-cash benefits provided by an employer to employees, such as rent-free accommodation, company car, concessional loans, or stock options. These are either given free or at reduced cost and are taxable under the head "Salaries". The value of each perquisite must be reported separately in the ITR.

If you're using ClearTax, there's no difficulty just upload your Form 16, and ClearTax will auto-fill and file ITR-2 for you based on the perquisite details in your form.

For example:

Mr B earns income from salary. His salary package includes the following ‘perquisites’ components:

The details of the perquisites can be found in Form 12BA, which is a supplement to Form 16, as shown below:

Thus, an employee can gather the basic information on the components of salary from the annexure and Form 12BA to Form 16. However, in case an employee is unable to find the information required in ITR-2 from Form 16, then the employee may need to gather the required data from their payslips etc.

Profit in lieu of Salary under Section 17(3)

Profits in lieu of salary refer to amounts received by an employee instead of salary or in addition to it. These include compensation for termination of employment, payments from a Keyman Insurance Policy, and similar receipts. As per Section 17(3) of the Income Tax Act, such amounts are fully taxable under the head "Salaries" and must be reported separately while filing your ITR.

For example:

Mr B receives the below payments from his employer:

The details of profits in lieu of salary can be found in Form 12BA, which is a supplement to Form 16, as shown above.

In case a taxpayer is employed with more than one employer in a financial year, then the aforementioned details are required to be provided for each such employment.

The table below provides the broad components of salary and the source of information:

Reason For Salary Breakup In New ITR-2

Form ITR-2 requires taxpayers to provide a detailed breakup of salary, allowances, perquisites, and profits in lieu of salary. It also asks for information on allowances claimed as exempt under Section 10. This detailed disclosure helps the Income Tax Department cross-verify exemption claims with the salary components and match the reported income against the TDS certificate i.e., Form 16 issued by the employer.

Summary Of Details Required In ITR-2

The table below lists the details required in ITR-2 under each component of salary:

Above details need to be reflected in ITR-2 in Schedule S - Salary. Format is as follows 

Related Articles

What is Form 16 – Basics, Part A & Part B of Form 16, FAQs

Allowances and deductions available to a salaried person & documents they need to submit to avail them

How to file your tax return if you have two Form 16 Part As?