ITR Filing Made Clear: 8 Scenarios Where It’s Mandatory

Income tax regulations require that if your gross taxable income exceeds the basic exemption limit, you must file an income tax return. Your choice of tax regime will determine the basic exemption limit. The basic exemption level under the new tax regime is Rs 3 lakh, irrespective of the taxpayer’s position. However, under the previous tax system, several groups had distinct fundamental exemption limits: Rs 2.5 lakh for the general public, Rs 3 lakh for senior persons, and Rs 5 lakh for super senior citizens. Even if your gross taxable income is less than the basic exemption threshold, you may still be required to file your ITR under certain circumstances specified in the Income Tax Act of 1961.

Even if gross taxable income is less than the basic exemption threshold, an ITR must be filed. These are the circumstances in which submitting an ITR is required even if the total taxable income is less than the basic exemption threshold.

• According to income tax legislation, if a resident person spends Rs 2 lakh or more on themselves or another person travelling abroad, either all at once or over the course of a fiscal year, they must file an ITR.
• Many taxpayers are investing their money directly in foreign company shares these days. This means that even if their taxable income is below the basic exemption limit, they still have to file an income tax return. Taxpayers should be aware that any dividends they receive from overseas shares are subject to personal taxation. Both these dividends and the overseas assets must be reported in their ITR. This covers information regarding any overseas custodial accounts they may have, as well as foreign shares, securities, etc. A resident individual must file an ITR in accordance with Section 139(1) of the Income Tax Act if they own assets like shares or bonds of foreign corporations, a home in another country, receive income from foreign sources like dividends, interest, or rent, or have signing authority over any foreign bank account located outside of India.
• The Central Board of Direct Taxes (CBDT) mandated the filing of an ITR in April 2022 for individuals who have TDS or TCS of Rs 25,000 or more deducted or collected from them. This implies that filing an ITR is required if TDS or TCS is deducted or collected in FY 2024–2025 in the amount of Rs 25,000 or higher.
• For a given fiscal year, if an individual surpasses any of the following financial levels, they are required to file an ITR: If the taxpayer is a business owner and the business’s total sales, turnover, or gross receipts are above Rs 60 lakh. For a taxpayer who works in a profession, if their total gross income is above Rs 10 lakh.
• According to income tax regulations, if a taxpayer pays an electrical bill totalling Rs 1 lakh or more within a fiscal year, they must file an ITR. You have the option of paying the electricity bill all at once or all at once over the course of the year.
• If a taxpayer needs to claim an income tax refund, they must file an ITR. Therefore, it makes no difference if your gross taxable income is below or above the basic exemption amount. Following the filing of the ITR, the income tax department compares the data entered with the data that is accessible. The income tax refund is sent out if the information and tax computations are accurate.
• According to Section 139 of the Income Tax Act, it is required that an ITR be filed if any taxpayer, including self-employed people with current bank accounts, deposits Rs 1 crore or more, or Rs 50 lakh or more, in a savings account during a fiscal year (either as a single deposit or as an aggregate deposit).
• Under specific circumstances, the income tax regulations permit an exemption from long-term capital gains (LTCG) tax. If a person’s gross total income exceeds the exemption threshold before claiming the LTCG tax exemption, they must file an ITR. A person may claim an exemption from LTCG tax under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB of the Income Tax Act.