Individual mandatory to file Income Tax Return (ITR)?

As per income tax laws, ITR must be filed if a resident individual’s total income during the financial year exceeds the basic exemption limit. Remember, the basic exemption limit for an individual depends on his/her age, provided he/she opts for the old income tax regime. If an individual taxpayer opts for a new tax regime, then the basic exemption limit remains the same irrespective of age.

The basic exemption limit is 2,50,000 for individuals below 60 years of age.

The income tax law requires people to file income tax returns (ITRs) to get information about their income and to check if the tax on the income earned has been correctly paid or not. The last date for filing ITR for FY 2022-23 (AY 2023-24) is July 31, 2023, for individual taxpayers whose accounts are not required to be audited.

There are certain instances where ITR filing is mandatory for individual taxpayers.

Even if an individual’s gross total income does not exceed the basic exemption limit, then also he/she may have to file ITR. ITR filing before the expiry of the due date (July 31, 2023, for FY 2022-23) is mandatory for these taxpayers:

• who has spent an amount or aggregate of amounts exceeding Rs 2 lakh for himself/herself or any other person for travel to a foreign country;
• who has deposited an amount or aggregate of amounts exceeding Rs 1 crore in one or more current accounts maintained with a bank or cooperative bank;
• who has paid electricity bill exceeding Rs 1 lakh in a single bill or on an aggregate basis during the financial year;
• “Ordinarily resident individuals who are having income from foreign countries and/or hold assets in foreign countries and/or have signing authority in any account outside India; and
• If an individual’s gross total income exceeds the exemption limit before claiming tax exemption on capital gains under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB of the Income-tax Act, 1961″
• The aggregate TDS/TCS in the financial year exceeds Rs 25,000 or Rs 50,000 (for senior citizens);
• An individual depositing Rs 50 lakh or more in a savings bank account in a single financial year;
• To claim income tax refunds.

Failing to file an income tax return will lead to penal consequences.