income tax return
Most people believe that Income Tax Return (ITR) has to be filed only when their annual income exceeds the tax exemption limit. But according to income tax rules this does not always happen. There are many cases where filing ITR may be mandatory even if your income is not taxable. Many situations like large bank transactions, expenses on foreign travel, huge electricity bills, business turnover and foreign assets make ITR filing necessary.
Keep an eye on income and major financial transactions
In the new tax regime for the financial year 2025-26 (assessment year 2026-27), there is tax exemption on income up to Rs 4 lakh, whereas in the old system this limit was Rs 2.5 lakh for those below 60 years of age, Rs 3 lakh for senior citizens and Rs 5 lakh for people aged 80 years and above. If your income exceeds these limits, it is mandatory to file ITR.
Apart from this, if the total deposits in one or more of your savings bank accounts during the financial year are more than Rs 50 lakh or the total deposit in current account is more than Rs 1 crore, you will also have to file ITR.
Foreign travel, electricity bill and professional income are also important
If you have spent more than Rs 2 lakh on your or any other person’s foreign travel in a financial year, then it will be necessary to file ITR. Similarly, if your electricity bills exceed Rs 1 lakh in a year, it is still mandatory to file returns.
Professionals like doctors, lawyers, architects, consultants and freelancers will also have to file ITR if their annual professional receipts exceed Rs 10 lakh. At the same time, for people doing business, this limit is of annual turnover of Rs 60 lakh.
Rules are also applicable on TDS, foreign assets and bank accounts.
It also becomes mandatory to file ITR if your total TDS or TCS during the financial year is Rs 25 thousand or more for general taxpayers and Rs 50 thousand or more for senior citizens.
Additionally, if you are a resident of India and own any property abroad, have financial stake in any foreign entity or have the right to operate any foreign bank account, then you will be required to file ITR, irrespective of your income.
It is wise to file returns on time
Experts say that timely filing of ITR not only helps in following the legal rules, but also makes it easier to take loans, visa applications, tax refunds and other financial tasks in future. Therefore, before filing returns, review your income, bank transactions and other financial activities and if necessary, take advice from a tax expert.
