Who needs to file income tax return (ITR) in India for FY 2023-24 Under the income tax laws, ITR filing is mandatory if total taxable income exceeds the basic exemption limit. There are other provisions in the income tax laws which make ITR filing mandatory
Many individuals are aware that filing an income tax return (ITR) is mandatory if their taxable income exceeds the basic income tax exemption limit. However, income tax laws mandate that ITR filing is mandatory in certain circumstances even if the taxable income is below the basic exemption limit.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} Suresh Surana, practising chartered accountant, says, "Section 139 mandates that ITR filing is mandatory (for individuals) in certain situations even if their total income in a financial year is below the basic exemption limit. If the ITR is not filed by the deadline of July 31, then a penalty will apply to these taxpayers."
Also Read: Last date to file ITR for different taxpayers
Here are the situations where ITR filing is mandatory even if the total taxable income is below the basic exemption limit.
1. Holding foreign assets or having foreign income: Many resident individuals invest in shares of foreign companies. Consequently, they may receive dividends from these foreign shares. According to Section 139(1) of the Income-tax Act, ITR filing is mandatory if a resident individual owns assets such as shares, bonds of foreign companies; a house in foreign countries; or has income such as dividends, interest or rent from foreign countries. ITR filing is mandatory even if a person has signing authority in any account outside India.
Surana says, "There may be cases where an individual invests his money in foreign assets in his parent's name as the parent's income is below the basic exemption limit. In such cases also ITR filing is mandatory for the parent."
2. Spending Rs 2 lakh and above for foreign travel: ITR filing is mandatory if a resident individual has spent Rs 2 lakh or more (at one go or in aggregate in a financial year) on himself/herself or any other person travelling to a foreign country.
Suppose an individual spends Rs 1 lakh on foreign travel for himself and Rs 1.5 lakh on foreign travel for his parents, the person has on an aggregate basis spent Rs 2.5 lakh on foreign travel. The person then has to mandatorily file an ITR even if he has no taxable income.
Also Read: Which ITR form applies to your income this year?
3. Paid electricity bill of Rs 1 lakh in financial year: If a taxpayer has paid electricity bill of Rs 1 lakh in a single payment or on an aggregate basis in a financial year, then ITR filing is mandatory.
4. Claiming tax exemption on capital gains: Surana says, "ITR filing is mandatory if an individual's gross total income exceeds the exemption limit before claiming tax exemption on capital gains. Under the Income-tax Act, an individual can claim exemption on capital gains through sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB."
5. TDS or TCS of Rs 25,000 has been deducted or collected: The income tax department, via a notification in April 2022, made ITR filing mandatory for individuals if the total tax deducted or collected from the individual during the financial year is Rs 25,000 or more.
Surana says, "The same notification made ITR filing mandatory if total gross receipt from profession exceeds Rs 10 lakh, or total sales, turnover or gross receipt of business exceeds Rs 60 lakh in a financial year, or if the aggregate deposit in one or more savings bank account is Rs 50 lakh or more during a financial year."
6. Deposited Rs 1 crore in current account: ITR filing is mandatory for self-employed individuals who have a current account with a bank and have deposited an amount or aggregate of amounts equal to or exceeding Rs 1 crore in a financial year.
7. If you have to claim income tax refund: Excess tax can sometimes be deducted from an individual's income from interest, dividends, etc. In such a case, the person is required to file an income tax return to claim the refund.
Once the ITR is filed, the income tax department matches the information filed in the ITR with the information available with them. If the details and tax calculations are correct, the income tax refund is issued.
Also Read: Last date to receive Form 16 from your employer
Penalty for not filing ITR before due date
If an individual files income tax return after deadline, the late filing fee will be levied wherever it is mandatory to file. A late filing fee will be levied under Section 234F of the Income-tax Act. Surana says, "A penalty of Rs 1,000 will be applicable where ITR filing is mandatory, and income is below the basic exemption limit. This is because penalty of Rs 1000 is applicable if taxable income does not exceed Rs 5 lakh."
There may be situation where income is above the basic income exemption limit and an individual also satisfies any other criteria mentioned above, say spending more than Rs 2 lakh on foreign travel. Surana says, "In such a case, ITR is required to be filed under Section 139(1) of the Income-tax Act"
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances
