Filing of return is mandatory even without income: An Overview of the provision

It is a wrong presumption that the income tax return filing is mandatory only if there is taxable income. This is not true.

There are instances where return filing has been made mandatory even without income u/s 139(1). Let us know about such instances:

1) If an individual has assets outside India:

 

An Individual, being a resident and ordinary resident in India, shall file his return of Income, even if his income does not exceed the maximum exemption limit, if he:

a) Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India

b) Has signing authority in any account located outside India

c) Is a beneficiary of any asset (including any financial interest in any entity) located outside India.

2) If he deposits more than Rs. 1 crore in bank account

An Individual or HUF shall be required to file his return of Income, even if income does not exceed the maximum exemption limit, if he has deposited an amount (or aggregate of amount) exceeding Rs. 1 crore in one or more current accounts maintained with a banking company or a co-operative bank. .

3) If foreign travel expenses are more than Rs. 2 lakh .

An Individual or HUF shall be required to  file his return of Income, even if income does not exceed the maximum exemption limit, if he has incurred more than Rs. 2 lakh on travel to a foreign country, either for himself or for any other person. .

4) If electricity consumption is more than Rs. 1 lakh

An Individual or HUF shall be required to file his return of Income, even if income does not exceed the maximum exemption limit, if he has incurred an expenditure exceeding Rs. 1 lakh on electricity consumption..

5) Partnership Firm/Companies:

These persons are required to file the return even if they don’t have any income. In short, even if no business activity is carried out by such firms or companies, return filing would be mandatory. Non filing would attract the penal consequences.