Demystifying Income Tax Filing: Who Must File Their Income Tax Return?
Filing your income tax return (ITR) is not just for salaried individuals. The rules are broader and stricter than most people realise. In this blog, we break down who must file income tax return in India, based on the latest CBDT guidelines and legal provisions.
Who is mandatorily required to file ITR?
As per Section 139(1) of the Income-tax Act, 1961, the following persons are required to file ITR:
1. Based on Gross Total Income
- Individuals below 60 years: If total income exceeds ₹2.5 lakh
- Citizens (60–79 years): Income above ₹3 lakh
- Super Citizens (80+ years): Income above ₹5 lakh
Note: Income before claiming deductions under Chapter VI-A (like 80C) and exemptions under Section 10 must be considered.
Additional Conditions: Even If Income is Below Threshold
Under the seventh proviso to Section 139(1), you must still file ITR if any one of the following applies in a financial year:
| Condition | Details |
|---|---|
| High foreign travel spend | If you spent over ₹2 lakh on foreign travel (self or others) |
| Electricity bill | If electricity consumption exceeds ₹1 lakh |
| Business turnover | Gross receipts from business exceed ₹60 lakh |
| Professional income | Receipts from profession exceed ₹10 lakh |
| TDS/TCS | If total TDS/TCS is ₹25,000 or more (₹50,000 for citizens) |
| Bank deposits | If deposits in one or more current accounts exceed ₹50 lakh |
Legal Reference: CBDT Notification No. 37/2022 dated 21.04.2022
Mandatory ITR Filing for Companies and Firms
- Every company or firm, irrespective of profit or loss, must file ITR.
- Even if the firm is inoperative or has nil income, ITR filing is mandatory.
Special Cases Where ITR Filing is Required
- Resident individuals holding foreign assets or signing authority abroad (Section 139(1)(c))
- Beneficial owners or beneficiaries of offshore assets
- Carrying forward capital losses or business losses – ITR must be filed before the due date
Who is Exempt from Filing ITR?
- Salaried individuals earning below the basic exemption limit and no other income
- citizens (aged 75+) with only pension + interest income from the same bank (Section 194P compliance)
Practical Tip from Efiletax Experts
Don’t rely solely on exemption limits. If you’ve done high-value transactions or received notices for AIS mismatch, file your return to stay compliant and avoid penalties. A missed ITR today can block refund claims, loan approvals, or even trigger scrutiny.
Consequences of Not Filing
- Late fee under Section 234F: ₹1,000–₹5,000
- Interest under 234A/B/C
- Loss of carry forward benefit
- Prosecution under Section 276CC in serious cases
How to File Your ITR – Step-by-Step
- Check your Form 26AS and AIS
- Select the correct ITR form (e.g., ITR-1 for salaried, ITR-3 for business/profession)
- Report all incomes (salary, interest, capital gains, etc.)
- Claim deductions under Chapter VI-A
- Validate bank account for refunds
- E-verify the return within 30 days
Use our Free ITR Filing Guide for detailed instructions.
FAQs: Who Must File Income Tax Return?
Q1. If my income is ₹2.4 lakh, but I invested ₹2.2 lakh in mutual funds, do I need to file?
A: No, not mandatorily. But file voluntarily to claim future benefits and establish income proof.
Q2. My bank deducted TDS of ₹35,000. Income is below ₹2.5 lakh. File ITR?
A: Yes. File ITR to claim full TDS refund.
Q3. I received a property as a gift. Should I file ITR?
A: If value exceeds ₹50,000 (non-relatives), it’s taxable. File ITR and report under “Income from Other Sources.”
Summary
Who must file income tax return in India? Anyone exceeding income limits, doing high-value transactions, or owning foreign assets must file. Firms and companies must file regardless of profit. TDS, bank deposits, or travel expenses can also trigger ITR filing.
Final Word
Income tax return filing isn’t optional for many—even if income is below taxable limits. With stricter compliance tracking via AIS and TDS, it’s smart to file proactively. Need help with your ITR?
Trust Efiletax to file it right, on time. Get Started Now →