Is it Compulsory to File Income Tax Returns?
News18 Creative by Mir Suhail.
Yes, it is compulsory to file income tax returns (ITRs). Not filing returns will not only attract penalties but can also hamper your chances of getting a loan, or a visa for travel purposes or property registration. As per the Income Tax Act, below are entities or firms that require mandatory filing of ITRs in India:
- People whose gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs 2.5 lakh in FY 2018-19. This limit is Rs 3 lakh for senior citizens (aged above 60 but less than 80) and Rs 5 lakh for super senior citizens (aged above 80).
- Companies or firms irrespective of whether you have income or loss during the financial year.
- Those who want to claim an income tax refund.
- Those who want to carry forward a loss under a head of income.
- Resident individuals who have an asset or financial interest in an entity located outside of India. This is however not applicable to NRIs or RNORs (Resident but not Ordinary Resident).
- Residents and signing authorities in a foreign account. Again, this is not applicable to NRIs or RNORs.
- Those who derive income from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
- Foreign companies taking treaty benefit on a transaction in India.
- Even NRIs, who have income that exceeds Rs. 2.5 lakh (for FY 2018-19) which is earned or accrued in India, are required to file an income tax return in India.