Who is required to file ITR in India (FY2023-24)? 

Filing an Income Tax Return (ITR) is a crucial responsibility for taxpayers. But who is required to file ITR? Understanding the criteria and the process can help you stay compliant with tax laws and avoid penalties. In this guide, we will explain who is required to file ITR in India! 

What is Income Tax Return?

An Income Tax Return is a form that taxpayers use to report their income, expenses, tax deductions, and investments to the Income Tax Department. It helps in determining the taxpayer’s tax liability or refund, if any. 

Who is required to file ITR in India?

To manage your tax obligations better, you should understand who is required to file ITR in India. If your income is below the exemption limit or you fall into any of the exempt categories, you can avoid the hassle of filing an ITR. Here, we will explain who is required to file ITR in India. 

• Individuals with Income above the Basic Exemption Limit: 
  • For individuals below 60 years of age, if your total income exceeds INR 2.5 lakh in a financial year, you are required to file ITR. 
  • For senior citizens (aged 60-80 years), the exemption limit is INR 3 lakh. 
  • For super senior citizens (aged 80 years and above), INR 5 lakh is the exemption limit. 

• Individuals having more than one source of Income: 
  • If you have multiple sources of income, such as salary, business income, rental income, or capital gains, you need to file ITR to report all your earnings. 

• Businesses and Professionals: 
  • If you own a business or are a self-employed professional, you are required to file ITR regardless of your income level. 

• Companies and Firms: 
  • All registered companies and firms, whether they make a profit or incur a loss, are required to file ITR. 

• Individuals claiming Tax Refund: 
  • If you have paid excess tax and are eligible for a refund, you need to file ITR to claim the refund. 

• NRI (Non-Resident Indians): 
  • NRIs are required to file ITR if their total income in India exceeds INR 2.5 lakh. 

• Individuals with Foreign Income or Assets: 
  • If you have foreign income or own foreign assets, you must file ITR regardless of income level. 

• Individuals subject to TDS: 
  • If Tax Deduction at Source has been deducted from your income, you should file ITR to report your income and claim any excess tax deducted. 

• Individuals who have deposited large amounts in Bank Accounts: 
  • If you have deposited more than INR 1 crore in one or more current accounts, you must file ITR. 

• Individuals who have Incurred High-Value Expenditures: 
  • If you have spent more than INR 2 lakh on foreign travel or INR 1 lakh on electricity bills, you need to file ITR. 

Additional categories requiring ITR filing

• Beneficiaries of Trusts and Estates: 
  • Individuals who are beneficiaries of a trust or estate and receive income from such sources must file ITR. 

• Income from Property held under Trust: 
  • If you have income from property held under trust for charitable or religious purposes, you need to file ITR. 

• Political Parties: 
  • Political parties are required to file ITR if their income exceeds the basic exemption limit. 

• Research Associations, News Agencies, and Trade Unions: 
  • These entities must file ITR regardless of their income. 

Why is filing ITR important?

Filing your Income Tax Returns on time offers various benefits. These benefits include; 

• Legal Requirement:
  • Filing ITR is mandatory for individuals who meet the criteria. Non-compliance of ITR on time can lead to penalties and legal issues. 
• Loan Approvals:
  • Banks often require ITR receipts for approving loans and credit cards. 
• Visa Applications:
  • Several countries require ITR receipts for visa processing. 
• Carry Forward Losses:
  • Filing ITR allows you to carry forward losses to future years, reducing your tax liability. 
• Proof of Income:
  • ITR serves as proof of income, which is essential for various financial transactions. 

How to file ITR?

• Gather the required documents: 
  • Collect all necessary documents such as Form 16, bank statements, investment proof, and TDS certificates. 

• Choose the correct ITR Form: 
  • Based on your income sources and category, select the appropriate ITR form. 

• Fill the ITR Form: 
  • Enter your personal details, income details, and deductions in the form. 

• Verify and submit: 
  • Review the form for accuracy, verify it using Aadhaar OTP, Electronic Verification Code (EVC), or Digital Signature Certificate (DSC), and submit it online. 

• E-Verification: 
  • Complete the e-verification process to validate your submission. 

Who is not required to file an Income Tax Return?

The Income Tax Department of India has set certain income thresholds, known as the basic exemption limits, below which individuals are not required to file an ITR. These limits vary based on the age and category of the taxpayer. 

• Individuals below 60 years: 
  • If your total income is up to INR 2.5 lakh in a financial year, you are not required to file an ITR. 

• Senior Citizens (60-80 years): 
  • If your total income is up to INR 3 lakh in a financial year, you are not required to file an ITR. 

• Super Senior Citizens (Above 80 years): 
  • If your total income is up to INR 5 lakh in a financial year, you are not required to file an ITR. 

Even if you fall within the basic exemption limits, there are additional scenarios were filing an ITR might not be necessary: 

• Individuals with no taxable income:
  • If your total income, after considering eligible deductions and exemptions, falls below the basic exemption limit, you do not need to file an ITR. 

• Individuals only earning Agricultural Income:
  • Agricultural income is exempt from tax. If your only source of income is from agricultural activities, you are not required to file an ITR, provided it does not exceed INR 5,000. 

• Individuals with exempt income:
  • If you only earn income that is fully exempt from tax (E.g., interest from certain specified investments), you do not need to file an ITR. 

• Specified Pensioners:
  • If you receive a pension and your total income falls below the exemption limit after standard deductions, you are not required to file an ITR. 

Conclusion

In conclusion, understanding who is required to file ITR is essential for staying compliant with tax laws. Whether you are an individual, a business owner, or an NRI, knowing the criteria can help you fulfill your tax obligations efficiently. Filing ITR not only ensures compliance but also provides various financial benefits.  

If you are coming in any of these categories, you have to file your Income Tax Returns. Now at 24Efiling, we will simplify the process and get your Income Tax Return filed. We will also guide you through the process and keep you updated with the latest ITR guidelines. 

FAQs