ITR Filing Rules: 10 Conditions That Make It Mandatory
While receiving a “salary credited” message is a moment of joy for most, the task of filing an Income Tax Return (ITR) can seem daunting. With various rules under the Income Tax Act, it’s important to know who is legally required to file an ITR in India.
While receiving a “salary credited” message is a moment of joy for most, the task of filing an Income Tax Return (ITR) can seem daunting. With various rules under the Income Tax Act, it’s important to know who is legally required to file an ITR in India.
Table of Contents
Who Needs to File an ITR? Basic Exemption Limits Explained
Filing an ITR is mandatory for individuals whose income exceeds the Basic Exemption Limit:
- ₹2.5 lakhs under the Old Tax Regime
- ₹3 lakhs under the New Tax Regime
If your gross total income before deductions surpasses these thresholds, you are legally required to file your income tax return.
Why Filing an ITR Is Still Necessary Below the Exemption Limit
Even if your income is below the exemption limit, you may still be required or benefit from filing an ITR. Here’s when:
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1. Claiming a Tax Refund
If tax has been deducted at source (TDS) and you are eligible for a refund, you must file an ITR. The refund process only starts after the return is filed.
2. Carrying Forward Losses
To carry forward capital or business losses and offset them against future gains, you need to file an ITR for the year the loss occurred.
Also Read: New ITR Deadline Announced! Avoid Penalties by Filing Before September 15
3. Owning Foreign Assets or Earning Foreign Income
Anyone who holds foreign assets (like overseas bank accounts, property, or stocks) or earns foreign income is mandated to file an ITR, regardless of income threshold.
4. Filing for Companies and Businesses
Every company or business entity, regardless of whether it earned a profit or incurred a loss, is required to file an income tax return annually.
ITR: A Financial Document Beyond Tax Payment
An Income Tax Return (ITR) is more than just a tax compliance form—it’s a comprehensive document detailing your income, deductions, assets, expenses, and tax liability. It serves as legal proof of income and is often required for:
- Visa applications
- Loan approvals
- Government tenders or subsidies
