Without income, when it would be mandatory to file income Tax Return?
Is it mandatory for an individual to file Income tax return even without taxable income also? No, it is not mandatory for every citizen of India to file an Income Tax Return (ITR).
However, te obligation to file an ITR is based on specific criteria prescribed under the Income Tax Act, 1961 even without taxable income as well. The other criteria which mandates filing of the ITR includes residency status, financial transactions, and other indicators – not simply on citizenship.
Let us have a Short Overview of the instances wherein filing is mandatory.
The key points regarding the mandatory filing of ITRs in India are as follows:
1. Income Exceeding Exemption Limit: Filing an ITR becomes compulsory if an individual’s total income exceeds the basic exemption limit, which is currently ₹2,50,000 for most individuals and ₹3,00,000 for senior citizens.
2. Residency Status and Foreign Assets: Individuals who are considered tax residents of India and have any of the following are required to file an ITR, even if their income is below the taxable limit:
– Hold any asset (including financial interest) outside India.
– Have signing authority in any account located abroad.
– Are a beneficiary of any foreign asset or entity.
3. Large Bank Deposits: If an individual has deposited more than ₹1 crore in aggregate in one or more current accounts during the financial year, they must file an ITR.
4. High Foreign Travel Expenses: If an individual’s foreign travel expenditure during the year is ₹2 lakh or more, they are required to file an ITR.
5. High Electricity Consumption: If an individual’s electricity expenses are ₹1 lakh or more during the financial year, they must file an ITR.
6. Business Turnover or Receipts: ITR filing is compulsory for individuals whose:
– Total sales/turnover/gross receipts from business exceed ₹60 lakh.
– Gross receipts from profession exceed ₹10 lakh during the financial year.
7. High TDS or TCS: If the total tax deducted or collected at source (TDS/TCS) is ₹25,000 or more (₹50,000 for resident senior citizens), an ITR must be filed.
8. High Aggregate Savings Deposits: If the aggregate deposit in one or more savings bank accounts exceeds ₹50 lakh, the individual is required to file an ITR.
It is important to note that even if an individual’s income is below the taxable limit, they may still be required to file an ITR due to the above-mentioned criteria. Additionally, filing an ITR can also benefit individuals by serving as a financial record for loans, visas, or credit card applications.
