For individuals, filing an Income Tax Return (ITR) is mandatory when their total taxable income for the financial year exceeds a minimum income limit, which is called the basic exemption limit.
1. The ITR is to be filed if the taxable income exceeds the following income limit for a financial year:
Individuals below 60 years old: Rs 2,50,000 and above
Individuals aged 60–79 years: Rs 3,00,000 and above
Individuals aged 80 years and above: Rs 5,00,000 and above
2. Even if the Income does not exceed the above-mentioned minimum Income limit (as mentioned in Point 1 above), the ITR filing is compulsory if the Taxpayer meets any of the following criteria during the financial year: -
a) Foreign Assets:
- Owns assets outside India directly or as a beneficial owner.
- Is a beneficiary of assets located outside India.
- Holds signing authority in any account outside India.
b) Bank Transactions:
- Deposited over Rs. 1 crore in one or more bank current accounts.
- Aggregate deposits in one or more bank savings accounts of Rs. 50 lakhs or more.
Individuals below 60 years old: Rs 2,50,000 and above
Individuals aged 60–79 years: Rs 3,00,000 and above
Individuals aged 80 years and above: Rs 5,00,000 and above
2. Even if the Income does not exceed the above-mentioned minimum Income limit (as mentioned in Point 1 above), the ITR filing is compulsory if the Taxpayer meets any of the following criteria during the financial year: -
a) Foreign Assets:
- Owns assets outside India directly or as a beneficial owner.
- Is a beneficiary of assets located outside India.
- Holds signing authority in any account outside India.
b) Bank Transactions:
- Deposited over Rs. 1 crore in one or more bank current accounts.
- Aggregate deposits in one or more bank savings accounts of Rs. 50 lakhs or more.
c) Expenses:
- Incurred more than Rs. 2 lakh on foreign travel.
- Incurred an expenditure exceeding Rs. 1 lakh on electricity consumption.
d) Business/Professional Turnover:
- Business turnover exceeds Rs. 60 lakh.
- Professional gross receipts exceed Rs. 10 lakh.
(Not applicable for Taxpayers who do not carry on business, profession, or freelance.)
e) Tax Deducted and Collected:
- The total tax deducted or collected from the taxpayer during the previous year is Rs. 25,000 or more.
- For resident senior citizens (60 years of age or older), if TDS or TCS is Rs. 50,000 or more.
3. Filing a return to claim any Tax benefits: If the taxpayer wishes to claim any refund of excess tax deducted or any other relief or benefit, then he or she should voluntarily file his or her tax return, even though he or she is not covered under any of the above criteria for filing a tax return. Some of the examples are as follows:
To claim reliefs such as:
- Refund of Tax Deducted (TDS)/(TCS)
- Carry forward losses from business or other heads of income (e.g., loss on the sale of shares, capital losses) to the next financial year for set-off against future income.
- Refund of Tax Deducted (TDS)/(TCS)
- Carry forward losses from business or other heads of income (e.g., loss on the sale of shares, capital losses) to the next financial year for set-off against future income.
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