Let's take a look at the categories of individuals who are mandatorily required to file income tax returns irrespective of their income threshold.
The gross total income is not the sole determinant for an individual taxpayer’s obligation to file the tax return in India.
If you are an Indian citizen and your gross total income exceeds the taxable limit in a financial year, then you are required to file your income tax return (ITR) for that year. Similarly, those whose income does not exceed the taxable limit in a financial year are usually not required to file their return of income. However, this may not be true in all the cases and some people may be required to file ITR even if their gross total income doesn’t exceed the taxable limit.
Let’s take a look at the categories of individuals who are mandatorily required to file the tax return irrespective of their income threshold.
“The general obligation to file an income-tax return by an individual arises if the gross total income (before claiming the specified deductions /exemptions) exceeds the basic exemption limit of Rs 2,50,000 during a particular financial year,” says Akhil Chandna, Associate Partner, Grant Thornton Bharat LLP.
However, if the above income threshold is not met, then an individual may be obliged to file the income-tax return in certain cases specified in the law as under:
# Individual holding any asset (including financial interest in any entity) located outside India; or
# Individual having signing authority in any account located outside India; or
# Individual being beneficiary of any asset (including financial interest in any entity) located outside India.
Further, the Budget 2019 also added the below categories of individuals which are mandatorily required to file the tax return irrespective of their income threshold:
1. Individual who has deposited a sum of more than Rs 1 crore in a financial year in any current account held with a bank or a co-operative bank.
2. Individual who has made an expenditure on foreign travel of more than Rs 2 lakh in a financial year.
3. Individual who has incurred electricity expenses of Rs 1 lakh or more in a financial year.
Similarly, “the income-tax return filing may also be required while availing any tax treaty relief, claiming refund of excess withheld taxes or while applying for a personal loan etc,” informs Chandna.
Therefore, the gross total income is not the sole determinant for an individual taxpayer’s obligation to file the tax return in India and all the above facts need to be analysed carefully before making any decision.