Do I need to file Income Tax Return?

Do I need to File Income Tax Returns?

Filing of Income Tax Return is not just a statutory compliance for the taxpayers but it also a way of informing the Government about the total income that the taxpayer has earned during a relevant financial year and that he has paid the tax on that income.

Now comes the question,

Do you need to file Income Tax Return?

As per the Income Tax Act and Rules, the persons are required to file Income Tax Returns if his/her gross income or expenditure or investments surpasses the predefined limit.

Also Read: Decoding Section 87A: Rebate Provision Under Income Tax Act

What is the predefined limit for filing Income Tax Return?

The predefined limit for filing of Income Tax Returns is different under the Old Tax Regime as well as the New Tax Regime, which is as follows:


– Under the Old Tax Regime, the individuals have to file Income Tax Return as per their income slab as well as their age group.
– Under the New Tax Regime, there is no distinction among the individuals on the basis of age.
– Old Tax Regime allows individuals to opt for all the deductions and exemptions but the Income Tax Slab rate is high.
– On the other hand, the New Tax Regime has lower Income Tax Slab rates but the individual will have to forego majority of the exemptions and deductions.

Also Read: All About Advance Tax Under Income Tax Act

Do you need to file Income Tax Return even if your gross income is below the predefined limit?

There are various cases where the individual’s gross income does not exceed the predefined limit, yet he/she has to mandatorily file Income Tax Returns. These cases are as follows:
a) Individual has spent an amount or aggregate of amounts exceeding Rs 2 lakh for himself/herself or any other person for travel to a foreign country;
b) Individual has deposited an amount or aggregate of amounts exceeding Rs 1 crore in one or more current accounts maintained with a bank or co-operative bank;
c) Individual has paid electricity bill exceeding Rs 1 lakh in a single bill or on aggregate basis during the financial year;
d) Ordinarily resident individual having income from foreign countries and/or assets in foreign countries and/or having signing authority in any account outside India; and
e) If an individual’s gross total income exceeds the exemption limit before claiming tax exemption on capital gains under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB.

Other Cases where it is mandatory to file ITR

  1. Assessee is a company or a firm irrespective of whether it has income or loss during the financial year
  2. Assessee has to claim an income tax refund
  3. Assessee wants to carry forward a loss under a head of income
  4. Return filing is mandatory if assessee is a Resident individual and has an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs)
  5. If assessee is a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs)
  6. Assessee is required to file an income tax return when he is in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust
  7. Assessee is a foreign company taking treaty benefit on a transaction in India
  8. A proof of return filing may also be required at the time of applying for a loan or a visa

Penalties related to late filing of Income Tax Return

– Late Filing Fees under Section 271F of the Income Tax Act amounting to Rs 10,000 for AY 2021-22, where such return is filed beyond the due date under Section 139(1) of the Income Tax Act. However, if the total income of the taxpayer is upto Rs 5,00,000, such late fees would be restricted to Rs 1,000.

– Additional interest under Section 234A of the Income Tax Act would be applicable @1% per month or part of the month for the amount of tax remaining unpaid.

– More importantly, the taxpayer would also lose out on certain deductions and/or set off and carry forward of losses (other than house property loss) as a result of filing the return beyond the due date prescribed under Section 139(1) of the Income Tax Act.

*Generally, the last date to file Income Tax Return is 31st July of the relevant assessment year.
*The due date for filing of Income Tax Return for Financial Year 2020-2021 | Assessment Year 2021-2022 is now extended to 31st December, 2021.

The author of this blog is Pooja Taneja and all the details stated here are her personal views. TaxHelpdesk does not owe any liability if taxpayers follow the information provided in this blog.

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