In India, individual taxpayers are required to file an Income Tax Return (ITR) provided they meet specific criteria, primarily based on their total income, age, and type of income. Below are the situations in which a taxpayer is required to file an ITR:
1. Income Thresholds:
If a taxpayer total annual income exceeds the prescribed limits, then one must file an ITR. The income thresholds for the financial year (2024-25) are:
- For individuals below 60 years of age: If your annual income exceeds ₹2.5 lakh.
- For senior citizens (aged 60 years or above but below 80 years): If your annual income exceeds ₹3 lakh.
- For super senior citizens (aged 80 years or above): If your annual income exceeds ₹5 lakh.
2. Types of Income:
Even if the income is below the threshold, you may need to file if you:
- Earn capital gains from investments (e.g., shares, real estate).
- Have business income or freelance income.
- Receive income from foreign sources.
- Have taxable income after deductions, exemptions, etc.
3. Other Situations wherein return filing is required:
You also need to file if:
- You have received any taxable income during the year, even if it’s below the basic exemption limit, and you need to claim a refund (like tax deducted at source).
- You are a resident with foreign assets or income.
- You are an employee and want to claim any refund of TDS (Tax Deducted at Source).
- You need to report income from a foreign source (e.g., foreign salary, interest, or dividends).
- You are a director of a company or have invested in unlisted companies or have agricultural income exceeding ₹5 lakh.
- If you have been issued a notice by the Income Tax Department requiring you to file.
- In case of search/raid conducted by Income Tax Officials, then a taxpayer may be required to file Income Tax Return.
4. For Specific Taxpayers:
- Companies or Firms: Corporations, partnerships, and LLPs must file returns regardless of their income.
- NRI (Non-Resident Indians): NRIs must file if they have any taxable income in India or if they have income that exceeds the basic exemption limit.
5. Exemption from ITR Filing:
Section 194P, which was introduced in Budget 2021, provides conditional relief to citizens above 75 years of age from filing income tax returns. However, this exemption is subject to the following conditions –
- Senior citizens should be more than 75 years of age.
- Senior citizens should be ‘Resident’ in India in the previous years.
- He earns income from interest and pension only. The interest income earned should be from the same bank in which he/she is receiving pension income.
- The senior citizen has to file a declaration stating some details with the specified bank.
- The bank must be a specified bank as notified by the Central Bank. Such banks will deduct the TDS of senior citizens after considering the deductions and rebates. After such TDS deduction, senior citizens will not be required to file income tax returns.
Note: Filing a return can be useful even if not strictly required, especially if you’re expecting a refund, want to carry forward losses, or are planning to apply for a loan or visa.
Taxcellent helps you in filing ITR for compliances and various purposes in a timely manner at a reasonable price.
