ITR: Why Filing Tax Return is Important If your Income doesn’t meet the Threshold Limit
For some people filing the ITR is painful. The first question that people ask is why would I file a tax return if the income doesn’t meet the threshold limit. In general, if you are a citizen of India and your gross total income exceeds the limit, you are required to file the return. However, there are different scenarios for those whose income doesn’t meet the threshold limit.
Let’s discuss those people who are required to file the ITR irrespective of their threshold limit.
Mandatory Requirements For Filing ITR
As per the income tax laws, ITR must be mandatorily filled by the person who is a resident of India, and the gross total income during the financial year exceeds the basic exemption limit set.
What is the Basic Exemption Limit Of ITR?
Basic Exemption Limit of the Individual depends on the tax regime chosen by him/her in Financial Year 20-21.
If an individual opts for the new, concessional personal tax regime, then the basic exemption limit is set up to 2.5 lakh, irrespective of age. However, when you talk about the senior citizens not getting any higher exemption limit to benefit under the new tax system.
Also, if the person is following the old tax regime then the basic exemption limit for him depends on his/her age.
Other Reasons Why You Should File Your Income Tax Return Mandatorily
You definitely know that there are certain exemption limit rules, in case your gross total income does not meet the exemption limit. You heard right you will file your ITR mandatorily if your income does not meet the basic exemption.
Note: According to the current income tax laws, the income tax returns for the financial year 20-21 must be filed before the deadline i.e. 31st December 2021.
- Individual has spent an amount or an aggregate of an amount exceeding Rs 2 Lakh for himself/herself or any other person for the purpose of traveling to a foreign country.
- The electricity bill of the individual in a single bill is exceeding the limit of 1 Lakh.
- Individual has deposited an amont of 1Crore in any of his bank accounts whether co-operative or not.
- Individual who is Ordinarily Resident having income from foreign countries/ assets in foreign country/ having any authority signing outside India.
- If an Individual’s Gross Income exceeds the exemption limit before claiming the tax exemption on capital gains under section 54, 54B 54D, 54EC, 54F, 54G, 54GA OR 54GB of the Income Tax Act, 1961.
For Income Tax Refunds [ITR]
If your gross total income doesn’t meet the criteria and tax has been deducted from your income, then you definitely have to file ITR to claim. This should be taken as an important note.
Income Tax Return for NRI
Whether a person is NRI or not if the income exceeds 2.5 lakhs is required to file the Income Tax Return [ITR]. For NRI, income earned or accrued in India is taxable India.
Why Should I file ITR if My Income is Not Taxable?
Loans: When you apply for the loan, the bank asks for your tax returns. They even ask for your salary slip that highlights all your deductions.
Hence, it is necessary to file the ITR for the purpose of a loan.
Claim Refund(s): If you have any refunds due, then filing the return is necessary. Without it, you will have to forgo the amount of refund. By filing a return, you can claim a refund.
Visa Processing: During the interviews for your Visa, a foreign consultant verify your ITR. The receipts are necessary if you are traveling to USA, UK, Europe, and Canada. If you want to travel to foreign countries, it is recommended to file your ITR.
Final Verdict
Being on the right side of the law is important, keeping the income tax department informed about your income and taxability is also recommended. ITR is compulsory to file.
