The government requires people to mandatorily file income tax returns (ITRs) to get information about their income and to check if the tax on the income earned has been correctly paid. The last date for filing ITR for FY 2021-22 (AY 2022-23) is July 31, 2022, for individual taxpayers whose accounts are not required to be audited.
As per the current income tax laws, ITR filing is mandatory if an individual taxpayer meets certain conditions.
Who has to mandatorily file income tax return?
There are certain instances where ITR filing is mandatory for individual taxpayers.
A) If gross total income exceeds basic exemption limit:
ITR filing is mandatory if gross total income of an individual taxpayer exceeds the basic exemption limit. Gross total income includes income received from various sources such as salary, house property, capital gains etc. The basic exemption limit of an individual depends on the income tax regime opted by the taxpayer while filing ITR.
If an individual opts for the new, concessional income tax regime for FY 2021-22 (AY 2022-23), then the basic exemption limit will be Rs 2.5 lakh, irrespective of the age of the individual taxpayer. Senior citizens and super senior citizens do not get any benefit of higher exemption limit.
On the other hand, if an individual continues with the old, existing income tax regime, then the basic exemption limit will depend on the individual’s age.
For FY 2021-22, the basic exemption limit under old income tax regime is as follows:
| Age of an individual taxpayer | Basic exemption limit under old income tax regime (Rs) |
| Below 60 years | 2,00,000 |
| 60 to 80 years | 3,00,000 |
| 80 years and above | 5,00,000 |
Thus, if an individual’s gross total income exceeds the amount mentioned in the table above (depending on your age) and you are opting for the old income tax regime, you will have to mandatorily file income tax return. Missing the income tax deadline will lead to penal consequences. Similarly, if an individual opts for the new income tax regime at the time of filing ITR and his/her gross total income exceeds Rs 2.5 lakh, then he/she will have to mandatorily file ITR.
B) If you have assets outside India:
It is mandatory for an individual to furnish a return of income if he:
⦁ holds any asset (including any financial interest in any entity) located outside India (as a beneficiary or otherwise);
⦁ has signing authority in any account located outside India; or
⦁ is a beneficiary of any asset (including any financial interest in any entity) located outside India.
This provision shall apply to resident and ordinary resident individuals in India.
C) If you deposit more than Rs 1 crore in a bank account:
An individual shall file his return if he has deposited Rs 1 crore or more in one or more current accounts maintained with a bank during the previous year.
No reference has been made for the deposit made in the current account maintained with a Post Office. Thus, if an individual is depositing more than Rs 1 crore in a current account with a post office and his income is less than the maximum exemption limit, he may not be required to furnish his return.
D) If you incur Rs 2 lakh on foreign travel:
An individual will file his return if he has incurred more than Rs 2 lakh on travel to a foreign country, either for himself or for any other person during the previous year.
E) If your electricity consumption is Rs 1 lakh:
An individual shall file his return if he has incurred more than Rs 1 lakh on electricity consumption during the previous year.
F) If turnover of your business is more than Rs 60 lakh:
An individual must file his return if total sales, turnover, or gross receipt of the business exceeds Rs 60 lakh during the previous year.
G) If gross receipt from profession is more than Rs 10 lakh:
An individual shall file his return if the total gross receipt of the profession exceeds Rs 10 lakh during the previous year.
H) If TDS and TCS is Rs. 25,000 or more:
An Individual (age less than 60 years) is required to file his return if the aggregate amount of tax deducted at source (TDS) and tax collected at source (TCS) in his case during the previous year is Rs 25,000 or more.
I) If TDS and TCS is Rs 50,000 or more:
The threshold limit of Rs 25,000 shall be considered as Rs. 50,000 in the case of resident senior citizen, i.e., whose age is 60 years or more at any time during the relevant previous year.
J) If deposit in a saving bank account is Rs 50 lakh or more:
An individual shall file his return if the aggregate deposit in one or more savings bank accounts is Rs 50 lakh or more during the previous year.
Exceptions to the above rule
Even if an individual’s gross total income does not exceed the basic exemption limit, then he/she may have to file ITR. ITR filing before the expiry of the due date (July 31, 2022, for FY 2021-22) is mandatory for these taxpayer:
If an individual’s gross total income exceeds the exemption limit before claiming a tax exemption on capital gains under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB of the Income-tax Act, 1961.
To claim income tax refunds
If the taxes deducted/ deposited during the financial year exceeds the actual tax liability, then ITR filing is mandatory for individuals to claim an income tax refund. This is mandatory even if gross total income is below the basic exemption limit, depending on the income tax regime chosen.
An individual is required to file an ITR informing the tax department about the higher taxes that have been deposited against his/her PAN. The income tax department matches the information filled in the ITR with the information available to them. If the details are correct, then an income tax refund is issued.
