Now that ITR 1 and 4 have been notified for AY 2021-22 and slowly more Income tax forms shall be notified we need to know one important aspect other than Income which can make you liable to file Income tax return.
As per section 139 only Company and firm are compulsorily required to furnish their Income tax every year whether or not they have earned any income.
All other assessee’s are required to file their income tax return only if their income exceed maximum amount not chargeable to tax i.e. different threshold limit for different person like for normal individual basic threshold is Rs. 2.5 lakh.
However, as per 7th proviso to section 139, if a person who is otherwise not liable to file Income tax return, will have to file return if he fulfills any of the below mentioned conditions:
(i) 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
(ii) 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
(iii) has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or
(iv) fulfils such other conditions as may be prescribed,
Thus, as per the above proviso if a person fulfills any of the conditions mentioned above he will have to file his income tax return irrespective of his income.
Now the criterial for filing Income tax return is not just income but other factors also.
Let’s take an example a normal student who has credit card book a flight for foreign travel for someone else of above Rs. 2 lakh from his credit card and he got it reimbursed from that person for some meager commission.
He does not do any other business or earns any income as he is still studying. Now because of this proviso he might be liable to file his income tax return even if he is not other wise liable to file Income tax return.
Another example for same could be a businessman who has just started business and has not earned any income or has a loss wishes not to file a loss return as he has not earned any income and his consumption of electricity exceeds Rs. 1 lakh.
In such a case he might be liable to file Income tax return even if his income is below taxable limit.
However there still needs to be some clarity as to whether the electricity bill of residence is to be included or only of business place and such other questions.
The motive behind such a measure is to keep a check on a person making such huge expenditure and still not liable to file Income tax return.
If you don’t file Income tax return you might be liable to pay penalty of upto Rs. 1,000 if you don’t have income above Rs. 5 lakh or Rs. 5,000 if your income is above Rs. 5 lakh under section 234F of the income tax act.
Hence, one need to even check for these things before decide on whether to file Income tax return or not because of just income.
If you need any assistance in filing your Income tax return CLICK HERE to get consultation from experts.
