Is it compulsory to file income tax return every year in India?

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Filing an Income tax return in India is an important activity for any person during a year. However, many people are confused as to when they have to file Income tax return and do they have to do it every year once they have a PAN in their name.

So let’s discuss who needs to file income tax return in India:

Resident Individual:

Resident Individual needs to file Income Tax return if his total income before claiming any exemption under section 10A etc or under section 54, 54F etc and without claiming any deduction under Chapter VI-A i.e. section 80C, 80D etc is below:

For individual below 60 years of age: 2.5 lakh

For individual between 60 to 80 years of age: 3 lakh

For individual above 80 years of age: 5 lakh.

For Individual claiming to pay income tax under new regime i.e. section 115BAC the limit would be increased to Rs. 3 lakh.

Non-resident Individual:

In case of non-resident Individual also the limit would be Rs. 2.5 lakh. However, if the non-resident earns any special rate income in India i.e. capital gain on shares, long term capital gain on land etc then irrespective of the amount if there is any income individual should file Income Tax return in India.

This above situation changes for non-resident individual as they don’t get any benefit if their total income is below exemption limit and if they earn any special rate income unlike resident individuals.

HUF:

Similar to Individual HUF also are not required to file income tax return if their total income does not exceed maximum amount not chargeable to tax i.e. 2.5 lakh.

Company/ LLP/ Partnership firm:

As far as companies, LLP or partnership firms are concerned they have to file their income tax return every year irrespective of whether they have earned any income or not. Hence, once you are any of 3 above, you have to file income tax return in India.

In case of foreign company in India if they have PAN in India they also should file income tax return in India every year unless otherwise exempt under any special section of Income Tax Act.

Thus, considering the above details it can be concluded that individuals are not required to file income tax return every year if they don’t breach the above limits. However, there are other conditions which can require Individuals to file income tax return which are as under:

Provided also that a person other than company and firm, who is not required to furnish a return otherwise, and who during the previous year—

 (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,

shall furnish a return of his income on or before the due date in such form and verified in such manner and setting forth such other particulars, as may be prescribed.

Also, it is recommended that any person who has incurred any capital loss during the year should file his/ her income tax return within due date irrespective of whether he/ she has earned any income or not otherwise he won’t be able to carry forward the loss and take it’s benefit in future and would end up paying more tax.

Thus, it is advisable to file your Income tax return within due date as mentioned in the Income tax act. Now that ITR 1 to 4 are available for filing if you need an expert to file your Income Tax return you can do that by clicking on the link below:

You can book phone consultation/ assistance online with expert as mentioned below:

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Disclaimer: The views presented in the above article are personal views of our team and has no legal binding. For any legal opinion consult a tax professional.

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