Article
Is filing Income Tax Return compulsory?
As a responsible citizen of India it is your duty to file Income Tax Return, the people who have taxable income should compulsorily file their income tax return otherwise they can receive a notice from the IT Department. On the other hand there are taxpayers who do not have a taxable, but they are suggested to file ITR. E-filing of ITR has several benefits associated to it and every person who has income in India should file Income Tax Return.
Who should Compulsorily file ITR?
There are certain situations wherein it is absolutely necessary to file Income Tax Return. Let’s take a closer look at what these are –
- If the income of an individual, HUF (Hindu Undivided Family), AOP (Association of People) and/or BOI (Body of Individuals) exceeds Rs. 2.5 lakhs in a given financial year if they are of 60 years of age or less. For Senior Citizens (between 60 years to 80 years) the minimum slab for filing ITR is Rs. 3 lakhs.
- A company or firm, regardless of earning profits or incurring losses, has to file Income Tax Return annually.
- If any individual wants to claim an income tax refund, he/she is required to file IT Return.
- If any person wants to carry forward a loss from a previous financial year under a head of income must file Income Tax Return.
- If a person has exempt long-term capital gains from either sale of equity shares of a company OR sale of unit of equity directed from mutual funds OR sale of a unit of business trust of more than Rs. 2.5 lakhs in a particular financial year. Even though these gains being exempt from tax, any such individual has to mandatorily file IT Return
- If a resident of India has an asset or financial interest in an entity located outside of India is required to file an Income Tax Return. However, this does not apply to Non-Resident Indians (NRIs) or Resident but not Ordinary Resident (RNORs).
- If a resident of India is a signing authority in a foreign account. (not applicable to NRIs or RNORs)
- You are required to file Income Tax Return if you receive any income from property held under either a trust for charitable, religious purposes, a political party, research association, news agency, educational or medical institution, trade union, a non-profit university, hospital, infrastructure debt fund, any authority, body or trust.
- If a foreign company is getting a treaty benefit on a transaction in India. Moreover, a proof of the ITR filed may also be required at the time of applying for a loan or visa.
- Any NRI (Non-Resident Indian) who acquires any income in India has to file an Income Tax Return.
Mentioned above are some of the situations and cases wherein filing of Income Tax Return is compulsory. However, it is always advisable to file IT Return even if you do not earn any income at all. It reaps benefits in the future when you do have an income.
