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.
When is it Compulsory to File ITR?
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) | 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 |
- 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.
Prerequisites to File ITR
General
- Registered user on the e-Filing portal with valid user ID and password
- Status of PAN is active
Others
- Link PAN and Aadhaar
- Pre-validate at least one bank account and nominate it for refund
- Valid mobile number linked with Aadhaar / e-Filing portal / your bank / NSDL / CDSL
- Download the offline utility or avail a third-party software (if using offline mode)
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:
- Claim a tax refund,
- Your gross total income exceeds INR 5,00,000,
- You need to file ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7.
FAQs
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.
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.
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.
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.
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.
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.
Hi Aayushi,
It is always a good practice to file your ITR and report all your financial transactions to avoid notice from the Income Tax Department. Especially after the SEBI and CBDT’s data partnership. If your total income is below the basic exemption limit, you won’t have any tax liability.
A. 5 lac (income until which tax is 0 using rebate) do I need to file itr or not mandatory.
B. For below 2.5 Lac will I be needed to file itr
In short, if I have stcg but my total income is still below the above 2 scenarios, is itr mandatory. Please tell me about both cases.
@Kaushal_Soni @Divya_Singhvi @Laxmi_Navlani @AkashJhaveri can you?
Hi @Latesh_Bayad
A. Yes you need to file ITR since the total income is more than the Basic Exemption limit i.e 2,50,000 INR.
B. As per the IT Act since your income is less than the Basic Exemption limit i.e 2,50,000 INR it is not mandatory to file ITR. However, irrespective of the income it is mandatory to file ITR for certain income situations. You can refer to the below article:
Yes, you can file the return on your own if you don’t want to opt for any assisted plan using Quicko DIY platform.
Hope this helps
So if my income is below 2.5L, I would not need to file itr even if that income includes stcg? Or would I.
And the DIY income tax for business and profession would also include the capital gains option?
I heard there’s standard deduction for salaried employees. Is there anything for businesses as well?
And here
What does it mean by “Regular business profit” under business income?
Hi @Latesh_Bayad
It refers to Income (Profit) from Busines & Professions.
Please reply to this
https://qna.tax/t/itr-mandatory-on-stcg-but-below-income-slab/974/4?u=latesh_bayad
Hi @Latesh_Bayad
Hi @royanish388, if the total income is below the basic exemption limit of INR 2.5 lakh, then there won’t be any tax liability. However, you should file your ITR and report your STCG.