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When is Income Tax Return Filing Mandatory Even if Income is Below INR 2.5 Lakh?
Many taxpayers assume that an Income Tax Return (ITR) is not required when total income is below the basic exemption limit. in following case Income Below theincome tax returnLimit? You May Still Need to File Income Tax Return
- Even if your income is below the basic exemption limit, filing an income tax return may still be mandatory if certain high-value transactions are reported during the financial year. These include deposits of INR 1 crore or more in current accounts, INR 50 lakh or more in savings accounts, foreign travel expenses exceeding INR 2 lakh, electricity bills above INR 1 lakh, substantial Tax Deducted at Source and Tax Collected at Source, ownership of foreign assets, or business/professional receipts crossing specified thresholds.
However, under the Seventh Proviso to Section 139(1) of the Income-tax Act, filing an ITR may still be compulsory if certain specified transactions are undertaken during the financial year. You must file an income tax return if you have:
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Deposited more than INR 1 crore in one or more current accounts maintained with a bank or cooperative bank.
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Incurred foreign travel expenses exceeding INR 2 lakh for yourself or any other person.
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Paid electricity bills exceeding INR 1 lakh during the financial year.
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Undertaken other prescribed high-value transactions, including:
- Deposits of INR 50 lakh or more in one or more savings bank accounts.
- Business turnover exceeding prescribed limits.
- Professional receipts crossing specified thresholds.
- TDS/TCS exceeding prescribed limits.
- Ownership of foreign assets or signing authority in a foreign account.
- Additionally, receiving high-value gifts from blood relatives may be tax-exempt but should be properly documented, and merely having income below the exemption limit does not automatically exempt a taxpayer from filing an income tax return. Timely filing helps avoid penalties, interest, notices, and loss of benefits such as carrying forward capital or business losses.
- Income below the basic exemption limit does not automatically exempt a taxpayer from filing an ITR. If any specified high-value transaction or prescribed condition applies, filing an income tax return becomes mandatory, irrespective of the amount of taxable income.
Income Tax Deductions applicable
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