Section 139 of the Income Tax Act regulates the filing of income returns. A common misconception is that the obligation to file an income tax return (ITR) arises if a person earns income on which tax has been deducted.
This is not entirely true. Section 139 lists specific situations where it is mandatory for a person to file a return even if no tax is deducted from his income or even if he does not make any income.
Recently, the Income Tax Department has extended the scope of this provision and issued notices in a few more situations where filing of return is mandatory.
In this article, we have listed the situations for which a person has to pay his income return for the financial year 2021-22 (assessment year 2022-23).
1) If your total income exceeds the basic discount limit
An individual will file a return if his / her income exceeds the maximum discount limit. The maximum discount limits for individuals are:
⦁ 2.5 lakh for one person;
⦁ 3 lakh for resident senior citizens (age 60 years or more but less than 80 years); And
⦁ Rs 5 lakh for Resident Super Senior Citizen (age 80 years or above).
The following discounts and concessions available to an individual will not be taken into account in calculating such maximum discount limit:
ছাড় Exemption from capital gains under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB.
ছাড় Exemptions under Sections 80C to 80U.
For example, Mr. A (50 years old) has sold a residential house and has a long-term capital of Rs. 10 lakhs. He has invested such capital gains and has sought exemption under section 54. In this case, the total income of Mr. A before claiming exemption is Rs.10 lakhs which has exceeded the maximum discount limit. Therefore, filing of return is mandatory.
This provision will apply to both resident and non-resident persons.
2) If you have assets outside India
It is mandatory for an individual to file an income return if he:
ধারণ Holds any assets (including financial interests of any entity) located outside India (a beneficiary or otherwise);
ক্ষমতা Ability to sign any account located outside India; Or
একজন A beneficiary of any assets (including financial interests of any entity) located outside India.
This provision will be applicable to the residents and general residents of India
3) If you deposit more than Rs 1 crore in a bank account
A person will file his return if he has deposited Rs 1 crore or more in one or more current accounts maintained in a bank in the previous year.
No references were made to the current account maintained with a post office. Thus, if a person deposits more than Rs 1 crore in a current account at a post office and his income is less than the maximum discount limit, he does not have to pay his return.
4) If your trip abroad costs 2 lakh rupees
A person will file his return if he spends more than Rs 2 lakh for a trip abroad, either for himself or for another person in the previous year.
5) If your electricity consumption is 1 lakh rupees
A person will file his return if he has spent more than Rs 1 lakh for electricity in the previous year.
6) If your business turnover is more than 60 lakh
An individual must file his return if the total sales, turnover or total receipt of the business in the previous year is more than Rs. 60 lakhs.
7) If the total receipt from the profession is more than 10 lakh
An individual will file his return if the total receipt of the profession in the previous year is more than Rs. 10 lakhs.
8) If TDS and TCS are Rs 25,000 or more
A person (under 60 years of age) is required to file his return if the total amount of withholding tax (TDS) and withholding tax (TCS) in his case in the previous year is Rs. 25,000 or more.
9) If TDS and TCS are Rs. 50,000 or more
The threshold limit of Rs. 25,000 will be treated as Rs 50,000 in the case of resident senior citizens, i.e., whose age is 60 years or more at any time of the relevant previous year.
10) Rs 50 lakh or more if deposited in a savings bank account
An individual will file his return if the total deposit in one or more savings bank accounts in the previous year is Rs 50 lakh or more.
(By CA Naveen Wadhwa, DGM, Taxman and CA Rahul Singh, Manager, Taxman)