Who Needs to File an Income Tax Return in India?
You’re not the only one in India who isn’t sure if they need to make an income tax return (ITR). A lot of people, especially salaried workers and freelancers, don’t understand this. To help you stay on the right side of the Income Tax Department, let’s break it down in simple terms. This article has a detailed discussion on who needs to file an income tax return in India.
What is an ITR (Income Tax Return)?
An Income Tax Return is a form that all Indian taxpayers must fill out and send to the Income Tax Department. It has details about your income, tax breaks, and the taxes you paid during the fiscal year (April to March). When you file your income tax return, you help the government figure out how much tax you owe and make sure you pay the right amount.
Who Is Mandatorily Required to File an ITR?
Let’s look at the most common scenarios where filing an ITR is mandatory:
1. Your Gross Total Income Exceeds the Basic Exemption Limit
This is the most straightforward rule. If your gross total income (before deductions under Section 80C to 80U) exceeds the exemption limit, you must file an ITR.
Here are the exemption limits for FY 2024-25 (AY 2025-26):
| Age Group | Old Regime | New Regime |
| Below 60 years | ₹2.5 lakh | ₹3 lakh |
| Senior citizens (60-80 years) | ₹3 lakh | ₹3 lakh |
| Super senior citizens (80+ years) | ₹5 lakh | ₹3 lakh |
Example: If you are 30 years old and earned ₹4.2 lakh during the year, even after claiming deductions, you need to file an ITR because your gross total income is above ₹2.5 lakh. From assessment year 2026-27, the exemption limit would be Rs 4 lakhs.
2. If You Want to Get Your Money Back
You have had tax taken out of your pay or interest income. No matter how little money you make, you need to file an ITR to get that money back.
3. You have Money or Assets in a Foreign Country
No matter how much money you make, you have to file an ITR if you have any assets or income that are not in India, like bank accounts, land, or shares.
4. If You Put at least ₹1 Crore Into a Bank Account
You have to file an ITR even if your income is less than the tax limit if you put at least ₹1 crore into one or more current accounts during the financial year.
5. Spending on Things of High Value
- Every year, they pay more than ₹1 lakh in electricity costs.
- High-net-worth people who might not report their income correctly will be caught by this rule.
6. If You Make Money from Work or Business
If your gross income is more than ₹2.5 lakh and you are self-employed, a worker, or the owner of a business, you need to file an ITR. This rule still holds if you have a small business or a side job.
7. Adding Up Past Losses
Want to get a tax break by putting off a business or cash loss until later?
8. Indian Resident with Assets in Other Countries
You need to file your ITR even if you don’t make any money from outside the country. This is because you have foreign bank accounts or investments, or are a signing authority for any foreign financial company.
Who Doesn’t Have to File?
Most people, even those who don’t owe any tax, should file, but you might not have to if: Your income is below the exemption level, or
There isn’t a special case for you among the ones listed above.
But it’s a good idea to file willingly to keep your finances in order and make a formal record of your income, which can come in handy when you apply for loans, visas, or insurance.
Benefits of Filing
- Get your TDS back.
- Keep track of your money.
- It will be easier to get loans and visas.
- Avoid fines for not following the rules.
How Come You Missed the Due Date?
The last day for most people to file their ITR is July 31, the end of the tax year. If you miss the date, you could face:
- It costs up to ₹5,000 to file late (Section 234F).
- Loss of some tax breaks and advantages
- Charges for tax not paid
Conclusion
It might seem like a chore to file your income tax return, but it’s an important step toward making smart financial decisions. If your income is higher than the exemption amount or if any of the other situations above apply to you, don’t wait. Delegate the responsibilities to TaxDunia and ensure a smooth compliance, no more worries about the paperwork.
