Itr Filing: Do You Need To File? Find Out Here

By Author: TaxHelpdesk
Total Articles: 39
Comment this article

Filing an Income Tax Return (ITR) is not just a legal obligation but also a crucial means of informing the government and tax authorities about your total income for a financial year. An ITR serves as a documented proof of your income.

Do You Need to File an ITR?
You are required to file an ITR if your gross income, expenditure, or investment exceeds a specified threshold limit.

Threshold Limits for Filing ITR
The threshold limits for filing an ITR differ between the Old Tax Regime and the New Tax Regime:

Old Tax Regime:

Filing is required based on income slabs and age groups.
Allows individuals to claim deductions and exemptions, though the tax slab rates are higher.
New Tax Regime:

No distinction based on age.
Lower tax slab rates, but most deductions and exemptions are not allowed.
Cases Where Filing ITR is Mandatory Regardless of Gross Income
Even if your gross income is below the threshold, you must file an ITR if:

You spent over ₹2 lakh on foreign travel for yourself or someone else.
You deposited over ₹1 crore in one or more ...
... current accounts.
You made deposits of ₹50 lakh or more in a savings account.
Your business turnover exceeds ₹60 lakh in a financial year.
Your professional receipts exceed ₹10 lakh in a financial year.
Your total TDS/TCS is ₹25,000 or more.
You paid electricity bills exceeding ₹1 lakh during the financial year.
You are an ordinarily resident individual with income from or assets in foreign countries, or have signing authority in any foreign account.
Your gross total income exceeds the exemption limit before claiming tax exemptions on capital gains under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB.
Additional Mandatory Filing Cases
Other scenarios requiring mandatory ITR filing include:

The assessee is a company or firm, regardless of income or loss during the financial year.
Claiming an income tax refund.
Wanting to carry forward a loss under a head of income.
Resident individuals with assets or financial interests outside India.
Resident individuals with signing authority in a foreign account.
Income derived from property held under a trust for charitable or religious purposes, political parties, research associations, news agencies, educational or medical institutions, trade unions, not-for-profit universities or educational institutions, hospitals, infrastructure debt funds, any authority, body or trust.
Foreign companies taking treaty benefits on transactions in India.
Proof of return filing might be required when applying for a loan or a visa.
Penalties for Late Filing of ITR
Filing your ITR late can lead to several penalties:

Late Filing Fees (Section 271F): A fee of ₹5,000 for Assessment Year 2021-22 if the return is filed beyond the due date under Section 139(1). If the taxpayer's total income is up to ₹5,00,000, the late fee is restricted to ₹1,000.
Interest (Section 234A): An additional interest of 1% per month or part of the month on the amount of tax remaining unpaid.
Loss of Benefits: You may lose certain deductions, set-offs, and carry forwards of losses (other than house property loss) if you file beyond the due date prescribed under Section 139(1).
Conclusion
Filing an ITR is a critical financial responsibility with significant implications for your financial health and compliance with legal requirements. Ensure that you understand the thresholds and mandatory conditions that necessitate filing. Timely filing can save you from penalties and enable you to take full advantage of deductions and exemptions. If you’re unsure about your ITR filing requirements or need assistance, consider seeking professional help to navigate the complexities of the tax system.

CLICK HERE TO FILE YOUR ITR NOW

By staying informed and proactive about your ITR filing, you can avoid penalties, maximize your financial benefits, and ensure compliance with tax laws.