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ITR Filing for AY 2022-23: When is it mandatory to file tax return for an individual or HUF?

An individual who may not have taxable income is also required to file his income tax return if he meets some conditions.

ITR Filing for AY 2022-23: When is it mandatory to file tax return for an individual or HUF?
If a person's or HUF's total income before claiming certain exemptions or deduction exceeds the maximum exemption limit, then the filing of income tax return is mandatory.

It is widely known that every individual, whose gross total income exceeds the taxable limit in a financial year, is required to file his/her return of income. However, is someone also required to file ITR if one’s income does not exceed the taxable limit?

According to tax rules, filing of return of income is mandatory where an individual’s gross total income is more than Rs 2,50,000 in a financial year. However, an individual who may not have taxable income is also required to file his income tax return if he meets some conditions.

Naveen Wadhwa, DGM, Taxmann, explains, “An Individual or HUF believes that the return filing is mandatory only if their income exceeds the maximum exemption limit, which is partially correct. There are 10 circumstances under which an Individual or HUF must file the return of income compulsorily. Even if there is no taxable income during the year, one must file the return of income if he incurs, for instance, an average of Rs 9,000 per month for electricity bill payments or pays for a family tour to Europe. A doctor earning Rs 90,000 per month from his private clinic must also file the return of income.”

These 10 circumstances are mentioned below:

1. If a person’s or HUF’s total income before claiming certain exemptions or deduction exceeds the maximum exemption limit, then the filing of income tax return is mandatory.

These deductions or exemptions include:

(a) Exemption under Section 10(38);

(b) Deduction under Section 10A,10B,10BA;

(c) Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB; and

(d) Deduction under Section 80C to 80U.

2. If a person holds any asset outside India as a beneficial owner.

3. If he has signing authority in any account located outside India.

4. If he has deposited more than Rs 1 crore during the previous year in one or more current bank accounts.

5. If he has incurred more than Rs 2 lakh on foreign travel.

6. If he has incurred more than Rs 1 lakh on electricity bills.

7. If his turnover of the business is Rs 60 lakh or more during the year.

8. If his gross receipts of the profession are Rs 10 lakh or more during the year.

9. If his aggregate deposits in saving bank account(s) are Rs 50 lakh or more; or

10. If his total TDS/TCS is Rs 25,000 or more (limit would be Rs 50,000 for resident senior citizen).

Thus, if you meet any of the conditions mentioned above, then you must file your return of income even if you may not have any taxable income. Otherwise you may get an income tax notice or may also face some penalty.

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