Mandatory filing of Income Tax Return

Neethi V. Kannanth | Last updated: 26 April 2022

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This article clarifies who is required to file an Income Tax Return. It outlines various scenarios, including exceeding income thresholds (with different limits for senior citizens), companies and firms regardless of profit, and situations involving carrying forward losses or claiming refunds. It also covers specific cases like foreign asset holdings, signing authority on foreign accounts, and receipt of certain types of income. Additionally, it details thresholds for high expenditure on foreign travel or electricity, and significant bank deposits for individuals not registered as companies or firms.

If you are unsure about whether you are required to file an income tax return, then this article will help you get clarity. Read on to know more about it.

Situations in which Filing of Income Tax Return is Mandatory

1. Gross total income before allowing any deduction under section 80C to 80U exceeds Rs. 2.5 lakhs in the FY 2021-22. However, for senior citizens, aged above 60 years but less than 80 years the limit is Rs.3 lakhs and for super senior citizens i.e individuals above 80 years of age is Rs. 5 lakhs.

2. With regard to the company or a firm, the return must be filed irrespective of whether in the previous year the company or firm has earned profit or loss.

3. For the purpose of carrying forward the loss.

Mandatory Income Tax Return Filing: Know Your Obligations

4. To claim income tax refund.

5. If a resident individual is having an asset or financial interest in an entity located outside India.

6. If a resident is having signing authority in a foreign account.

7. If you are in the receipt is in receipt of income derived from the property held under a trust for charitable or religious purposes or a political party or a research association or news agency or educational or medical institution or a hospital or an infrastructure debt fund or any authority or body or trust.

8. If a foreign company is taking treaty benefits on a transaction in India.

9. Following persons not being a company or firm are required to file a return-

has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current accounts maintained with a banking company or a co-operative bank; or
has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or
has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity.

10. Further as per Notification no. 37/2022 dated 21st April, 2022, the following persons are required to file their Income Tax Return-

if his total sales, turnover or gross receipts, as the case may be, in the business exceeds Rs. 60 lakh during the previous year; or
if his total gross receipts in profession exceed Rs. 10 lakh during the previous year; or
if the aggregate of tax deducted at source and tax collected at source during the previous year, in the case of the person, is Rs. 25,000 or more; However, in case of a person whose is 60 years of age or above the limit of Rs. 25,000 is increased to Rs. 50,000 or
the deposit in one or more savings bank account of the person, in aggregate, is Rs.50 lakh or more during the previous year

FAQ :

For the financial year 2021-22, if your gross total income before deductions exceeds Rs. 2.5 lakhs, you must file an ITR. This limit is Rs. 3 lakhs for senior citizens (60-80 years) and Rs. 5 lakhs for super senior citizens (above 80 years).

Yes, companies and firms are required to file an Income Tax Return irrespective of whether they incurred a profit or a loss in the previous year.

You must file an Income Tax Return if you wish to carry forward any losses to future years or if you are eligible to claim an income tax refund.

Yes, a resident individual must file an ITR if they possess an asset or have a financial interest in an entity outside India, or if they have signing authority on a foreign account.

As per Notification no. 37/2022, individuals whose business turnover or gross receipts exceed Rs. 60 lakh, or whose professional gross receipts exceed Rs. 10 lakh, must file an ITR. Also, if the aggregate of tax deducted and collected at source is Rs. 25,000 or more (Rs. 50,000 for those aged 60+), filing is mandatory.