Confused About Whether to File Income Tax Returns or Not? Here are All Your Questions Answered
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Various people are confused about filing income tax returns. They are not sure if they are required to file it or not. Paying taxes and filing ITR are two different things and people should not think of the two as one thing. Both the things are done separately.
Here are some points which will help clear your doubts if you are to file ITR or not.
Gross total income above basic exemption limit
If a person’s total income is more than the basic exemption limit before availing of various deduction options for investments and expenses, then he has to file ITR. Deductions can be availed under chapter VIA, which comprises mainly Section 80C, 80 CCD, 80D, 80TTA, 80 TTB, among others.
The deduction option is available for repayment of home loan, life insurance premium and health insurance premium, contribution towards EPF, PPF and NPS accounts, interest from banks, tuition fee for children, etc.
Those who are below the age of 60 come under the exemption limit of Rs 2.5 lakh per year. People whose ages are more than 60 but less than 80 get the exemption limit of Rs 3 lakh per year. It is Rs 5 lakh per year for those above 80 year.
It sometimes happens that the income comes down below 2.5 lakh after application of various deductions. In such cases, a person, despite having gross income beyond the exemption limit, does not need to pay tax. However, that person still has to file ITR.
Long term capital gains
Although the long term capital gains on sale of listed equity shares and equity oriented units were tax free for assessment year 2019-2020, people are still needed to file ITR. The exemption in this case was provided under Section 10(38).
Bank account or having interest in asset outside India
Suppose a citizen of this country does not fall in the tax bracket, but he has interests in assets outside the country, in this case he is liable to file ITR. Apart from this, if that person has signing authority in respect of any account outside the country, he will still be required to file ITR. This also applies to those who are signatories in a bank outside India irrespective of balance in the account.