Income tax return – is filing ITR compulsory in India

As per IT act, an individual is required to file his IT return if his/her income before deduction exceeds the basic exemption limit. In chapter VIA, deductions like investment in LIC, PPF and EPF are listed, anyone fulfiling the required criteria as mentioned in respective sections of chapter VIA can claim those deductions from his her total income. However for ITR filing eligibility, you have to take your income before allowing such deduction.

Basic exemption limits are specified based on the financial year and the type of taxpayers. For an assessment year 2013-2014 and 2014-2015 basic exemption limits mentioned in IT act are as follows;

  • For an individual (for both men and women) below the age of 60 yrs, the basic exemption limit is Rs. 2, 00,000.
  • For an individual (for both men and women) whose age is between 60 to 80 years, the basic exemption limit is Rs. 2, 50,000.
  • For an individual who is 80 years or more, the basic exemption limit is Rs. 5, 00,000

Recommended Read: What is basic exemption limit

Income tax return – is filling IT return compulsory in IndiaAs per IT act, if an individual’s gross total income is not more than the basic exemption limit then such individual will be exempted from filing IT return.

Gross total income is the income that an individual arrived before allowing IT deductions. For example if you have gross total income of Rs. 2, 00,001 and taking together, your investment in LIC, EPF, PPF and others comes to Rs. 1, 00,000 then you will not be liable to pay tax but IT filing is required as your gross total income (i.e. Rs. 2, 00,001) is more than the basic exemption limit.

Recommended Read: IT filing is not required for salary up to  Rs. 5, 00,000

In addition to the basic exemption limit criteria you are also required to file your IT return if you have any foreign asset. It does not matter whether you have any income out of it or not. In this case you can not file your IT return manually with your local IT office. You need to compulsorily e-file your IT return.

Compulsory efiling for income more than Rs. 5, 00,000

Earlier efiling of IT return was compulsory if your income is exceeding Rs. 10 lakhs. From assessment year 2013-2014 onwards this limit has been reduced to Rs. 500000 i.e. if your total income exceeds Rs. 500000 then you must e-file your IT return instead of manual submission with IT department.

Many taxpayers think that after paying tax it is not required to file IT return. But in reality it’s different. If your gross total income is more than the basic exemption limit or you are fulfiling the other criteria like having foreign asset etc then it’s compulsory for you to file your IT return before the due date of filing.

Recommended read: Due date of IT filing

Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.