Who should file Income Tax Return (ITR)?

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By Hiral Vakil on February 18, 2019

ITR i.e. Income Tax Return should be filed 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.

When is ITR Filing is Compulsory?

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

  • If your Gross Total Income for a financial year exceeds the basic exemption limit as per the following table: (Gross total income is income before claiming deductions such as 80C,80D,80TTA)
Category Basic Exemption Limit
Individual/ HUF (Resident/ NRI) Rs. 2,50,000
Resident Senior Citizen Individual (60 years or more but less than 80 years) Rs. 3,00,000
Resident Super Senior Citizen Individuals (80 years or more) Rs. 5,00,000
How to file Nil Income Tax Return?
  • Any resident to whom any of the following situations is applicable needs to file ITR:
    • Who has an asset outside India,
    • Who has a financial interest in any entity located outside India,
    • Earned income from a source outside India during the year,
    • Who has signature authority in any bank account located outside India.
  • Any taxpayer who wishes to claim a refund of excess TDS deducted needs to file ITR.
  • Any taxpayer who has incurred the losses during the financial years and wishes to carry it forward to the next financial year needs to file the return.
  • All Companies, Partnership Firms, LLPs, Local Authorities are required to file ITR.
Income Tax: Rates, Due Date and Return Filing in India

Who is required to file ITR online (e-File)?

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

  • If you wish to claim tax refund,
  • If your gross total income exceeds Rs. 5,00,000,
  • If you need to file ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7.
What is the due date for return filing?

FAQs:

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

No, if your gross total income for a year is less than Rs. 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.

2. 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. 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.

3. Should NRI file return?

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

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

4.  Can a minor file income tax return?

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

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

5. 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.

6. What are the benefits of filing return?

Following are the few benefits of filing return:

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