Income Tax Return Filing: Is it compulsory to file ITR if income does not exceed Rs 7 lakh?


Income Tax Return Filing FY 2023-24: If your income is under Rs 7 lakh, then you could be questioning if you want to file your Income Tax Return. The first vital level to notice is that submitting ITR could be very completely different from paying income tax. Filing an income tax return (ITR) is compulsory if your gross taxable income surpasses the primary exemption restrict or if you may have carried out particular transactions.However, this does not at all times indicate that you’re required to pay income tax.
The deadline for submitting ITR for the present evaluation 12 months is July 31, 2024, for people who’re not required to bear an income tax audit for FY 2023-24 (AY 2024-25). Apart from income, there are extra elements that make submitting ITR necessary.
Under part 87A of the Income Tax Act, 1961, you might be eligible for a tax rebate if your internet taxable income is inside Rs 5 lakh (previous tax regime) or Rs 7 lakh (new tax regime).
The most tax rebate obtainable is Rs 12,500 underneath the previous tax regime and Rs 25,000 underneath the brand new tax regime. As a outcome, if your income falls inside the specified ranges, you might be not obligated to pay any income tax. Nevertheless, even if your tax legal responsibility turns into zero due to the tax rebate, submitting an ITR continues to be needed, in accordance to an ET report.
“Generally, taxpayers have a mis-understanding that if tax is not payable then filing of ITR is also not mandatory,” says Sudhir Kaushik, Co-founder and CEO, was quoted as saying.
According to Kaushik, submitting ITR is compulsory if your gross whole income, earlier than deductions underneath Chapter VI (Sections 80C, 80D, and many others.), is greater than the essential exemption restrict.
Also Check | ITR e-Filing FY 2023-24: Which Is The Correct Income Tax Return Form For You? From ITR-1 To ITR-7 – Check Here
For FY 2023-24 (AY 2024-25), the essential exemption limits underneath the previous tax regime are:
* Rs 2.5 lakh for people under 60 years of age
* Rs 3.0 lakh for people above 60 years however under 80 years of age
* Rs 5.0 lakh for people above 80 years of age
Under the brand new tax regime, the essential exemption restrict for all classes of taxpayers is Rs 3 lakh for FY 2023-24 (AY 2024-25).

When is ITR submitting necessary regardless of income stage?

According to Neeraj Agarwala, Partner at Nangia Andersen India, there are specific conditions the place people should file an ITR no matter their gross whole income:
* If a person’s annual financial institution deposits in a number of financial savings accounts surpass Rs 50 lakh, they’re obligated to file an ITR.
* Individuals whose electrical energy invoice exceeds Rs 1 lakh in the course of the 12 months should file an ITR.
* Those who personal property in another country, are beneficiaries of such property, or have signing authority in any abroad account should file an ITR.
* Professionals incomes greater than Rs 10 lakh throughout a monetary 12 months are required to file an ITR.
* If an individual’s TDS/TCS is greater than Rs 25,000 (or Rs 50,000 for senior residents), submitting an ITR is compulsory.
* Individuals who spend Rs 2 lakh or extra on international journey for themselves or others in the course of the monetary 12 months are required to file an ITR.
Also Read | ITR submitting FY 2023-24: Why is Form 16 vital for salaried people when submitting income tax return?
(*7*)To higher perceive these necessities, contemplate the next examples:
* Example 1: Consider a salaried particular person with a gross taxable income of Rs 5.5 lakh, eligible for the standard deduction of Rs 50,000, 80C deduction of Rs 1.5 lakh, and different deductions totaling Rs 1,10,000, you want to file ITR.
* Example 2: If your internet taxable income is Rs 4.25 lakh, which is under the Rs 5 lakh or Rs 7 lakh threshold (relying on the tax regime), you might be exempt from paying income tax due to the rebate underneath part 87A. However, you have to nonetheless file an ITR as a result of your gross whole income exceeds Rs 2.5 lakh (previous tax regime) or Rs 3 lakh (new tax regime).
* Example 3: As a salaried particular person with a gross taxable income of Rs 7.5 lakh and a normal deduction of Rs 50,000, you could not owe any income tax after deductions and rebates. Nevertheless, submitting an ITR continues to be necessary.
Agarwala states, “Individuals are mandatorily required to file an income tax return if their total income, excluding deductions under Chapter VI-A, exceeds the basic exemption limit. In this case, the total income excluding gross deductions under section 80C will be Rs 3,90,000 (Rs 5.5 lakh-Rs 50,000-Rs 1.1 lakh) (assuming the other deductions are not under Chapter VI-A), and they will be mandatorily required to file their ITR.”
Also Read | Form 26 AS: Filing Income Tax Return? Know why Form 26AS is vital & how to obtain it

What are the implications of not submitting ITR, even if you might be mandated to?

If you might be obligated to file an ITR however fail to accomplish that by the deadline of July 31, 2024, you may have the choice to file a belated ITR. However, if you select not to file in any respect, you could face a number of penalties, says Agarwala.
Firstly, underneath Section 234A, if you do not pay your taxes on time, you’ll be topic to penal curiosity at a price of 1% per thirty days on the excellent tax quantity. Additionally, if there’s a delay within the fee of advance tax, curiosity can be levied underneath Section 234B.
Moreover, in accordance to Section 234F, failing to file your ITR inside the due date will end in a late charge of Rs 5,000. However, if your annual income is under Rs 5 lakhs, the late charge can be restricted to Rs 1,000. If your gross income falls under the essential exemption restrict, no penalty can be charged.
It’s vital to notice that when submitting a belated ITR, you forfeit the flexibility to carry ahead losses from shares, future and choices (F&O), and different sources. However, you’ll be able to nonetheless carry ahead losses from home property.
Furthermore, submitting an ITR is a prerequisite for receiving any tax refund. If you file a belated ITR, you’ll not be entitled to any curiosity on the tax refund.
In the occasion that you do not file an ITR, the income tax assessing officer has the authority to conduct a Best Judgment Assessment. This implies that the tax officer might estimate your income and tax legal responsibility based mostly on the data obtainable to them.
Lastly, if you fail to file your ITR and do not go for the previous tax regime by submitting Form 10-IEA, your income tax can be calculated underneath the brand new tax regime by default. As a outcome, you could miss out on claiming gross deductions that will have been relevant to you.

Nilesh Desai
Nilesh Desai
The Hindu Patrika is founded in 2016 by Mr. Nilesh Desai. This website is providing news and information mainly related to Hinduism. We appreciate if you send News, information or suggestion.


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