You pay tax on the income earned, which means that you are liable to pay income tax only when you earn a certain level of income. There are exemption limits available in the current income tax rate slab for the FY 2022-23, thus, allowing certain people to be relieved of filing their income tax returns (ITRs).
However, Section 139 of the Income Tax Act, 1961 specifies certain situations where it is mandatory for an individual to file an ITR, even if no tax has been deducted from their income or if they have not earned any income. The Income Tax Department has recently broadened the scope of this provision and has notified additional situations where filing an ITR form is now compulsory.
Filing an income tax return becomes necessary when your total income surpasses the basic exemption limit
Individuals are required to file an ITR form if their income exceeds the maximum exemption limit. The maximum exemption limits are as follows:
- ₹2.5 lakh for individuals
- ₹3 lakh for resident senior citizens (aged 60 years or more but less than 80 years)
- ₹5 lakh for resident super senior citizens (aged 80 years or more)
It is important to note that certain deductions and exemptions available to individuals are not considered when calculating the maximum exemption limit. These include exemptions from capital gains under Sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB, as well as deductions under Sections 80C to 80U of the Income Tax Act, 1961.
This provision applies to both resident and non-resident individuals alike.
If you possess assets located outside of India, it becomes necessary to file an ITR
Filing a return of income is mandatory for individuals in the following situations:
- If they hold any asset, including any financial interest in any entity, located outside India, whether as a beneficiary or in any other capacity.
- If they have signing authority in any account situated outside India.
- If they are a beneficiary of any asset, including any financial interest in any entity, located outside India.
Resident and ordinary resident individuals in India are eligible to avail of the benefits of this provision.
If you make a deposit exceeding ₹1 crore into a bank account, you must file an ITR
Taxpayers are required to file their tax returns if they have deposited ₹1 crore or more in one or multiple current accounts held with a bank in the previous year.
No specific mention has been made regarding deposits made in current accounts maintained with a Post Office.
In the event of spending ₹2 lakh on overseas travel, you must file your tax return
If taxpayers have accumulated expenses exceeding ₹2 lakh on travel to a foreign country in any year, whether for their own purposes or on behalf of another person, they are required to file their tax returns for that financial year.
In case your electricity consumption amounts to ₹1 lakh, you must file an ITR
If taxpayers have spent over ₹1 lakh on electricity consumption in any year, they must file their tax returns for that financial year.
If the turnover of your business exceeds ₹60 lakh, you must file an ITR
If the total sales, turnover, or gross receipts of a business exceed ₹60 lakh in any year, taxpayers are required to file their returns for that financial year.
You are liable to file an ITR if the gross receipt from your profession exceeds ₹10 lakh
If the total gross receipts from the profession exceed ₹10 lakh during the previous year, an individual is required to file their return.
File ITR the total amount of TDS and TCS is ₹25,000 or more
If taxpayers (age less than 60 years) have an aggregate amount of tax deducted at source (TDS) and tax collected at source (TCS) equal to or exceeding ₹25,000 during any year, they are required to file their ITRs for that financial year.
File ITR if TDS and TCS together exceed ₹50,000 or more
In the case of a resident senior citizen, i.e., an individual who is 60 years or older at any time during the relevant previous year, the threshold limit of the total amount of TDS and TCS is ₹25,000 will be increased to ₹50,000.
File ITR if the deposit in a savings bank account is equal to or exceeds ₹50 lakh
If the total deposit in one or more savings bank accounts by an individual amounts to ₹50 lakh or exceeds this amount during any year, he or she is required to file an ITR for that financial year.
