Who should file Income Tax Return (ITR)?

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Hiral Vakil

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It is important to file your Income Tax Return (ITR) if your taxable income is more than the basic exemption limit. However, irrespective of the income it is mandatory to file ITR for certain income situations. Let’s look at scenarios under which it is mandatory to file an income tax return in India.

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Income Tax Calculator
Calculate income tax liability for FY 2020-21. Compare tax liability as per New vs Old Tax Regime.
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When is it Compulsory to File ITR?

It is mandatory to file ITR under the certian conditions irrespective of the basic exemption limit:

Category Basic Exemption Limit
Individual/ HUF (Resident/ NRI) INR 2,50,000
Resident Senior Citizen Individual (60 years or more but less than 80 years) INR 3,00,000
Resident Super Senior Citizen Individuals (80 years or more) INR 5,00,000

 

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Residential Status Calculator for Income Tax. Taxability in India depends on residential status. Know your residential status from Resident, NRI, Resident but Not Ordinarily Resident(RNOR)
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Residential Status Calculator
Residential Status Calculator for Income Tax. Taxability in India depends on residential status. Know your residential status from Resident, NRI, Resident but Not Ordinarily Resident(RNOR)
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Income Tax Return Filing Due Dates
Here are the list of important dates to file the Income Tax Return
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Income Tax Return Filing Due Dates
Here are the list of important dates to file the Income Tax Return
Read More

Who is required to file Income Tax Return online (e-File)?

You can also file income tax returns online using the IT Department Utility or Income Tax E-Filing website. Moreover, the IT Department has identified the following situations where e-filing of return is mandatory if:

ITR for Salaried Individuals
CA Assisted Income Tax Return filing for individuals having salary, one house property & income from other sources.
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ITR for Salaried Individuals
CA Assisted Income Tax Return filing for individuals having salary, one house property & income from other sources.
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FAQs

Do I need to file ITR if my income is less than INR 2,50,000?

No, if your gross total income for a year is less than INR 2,50,000 then you don’t need to file ITR. However, if you wish to claim a refund of TDS deducted on your income or if you wish to claim losses from the business then you should file ITR.

Do I need to file tax return if my employer has deducted TDS on salary?

Yes, you need to file a tax return even though tax has been deducted by the employer from salary. Additionally, the filing of a tax return is the responsibility of each taxpayer who is earning income in India. Hence, reporting the income earned during the year by a taxpayer and taxes paid on the same needs to be filed through ITR.

Should NRI file return?

In the case of NRI, tax return filing is not compulsory. But in the following circumstances ITR filing is mandatory:

1. NRI has earned income in India which is more than INR 2,50,000 i.e, Basic Exemption Limit.
2. NRI wished to claim a refund of TDS deducted on interest income earned in India.
3. If NRI has incurred losses in India and wished to claim the same then ITR filing is mandatory.

Can a minor file income tax return?

Income earned by a minor is taxable just like any other person. In general practice, the income of minor gets clubbed with the income of parents. Hence, the minor is not required to file a tax return. But in the following cases, filing return of minor is compulsory:

1. When minor earns income using special skills or knowledge.
2. When none of the parents is alive.

What happens if I don’t file the return?

If you do not file an income tax return, the IT department might send you a notice for filing a tax return. If you have any outstanding tax liability then you will be penalized with interest on tax liability u/s 234A, 234B, 234C, and 234F. Hence it is always advisable to file a tax return.

What are the benefits of filing return?

Following are the few benefits of filing return:

1. You can claim a refund of taxes deducted during the year,
2. You can avoid interest penalty and/or default on income earned during the year,  
3. IT Return works as documentary proof of income of an individual,
4. For loan application and visa application banks, financial institutions and consulate demand IT Returns.

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