Income tax return filing 2024: Who is required to file ITR?

Common Misconceptions about Filing ITR

Many salaried individuals believe they are not required to file Income Tax Returns (ITR) if the appropriate tax has been deducted from their salaries. This misconception extends to retirees who think that since the bank has deducted tax on their fixed deposit interest, they are exempt from filing ITR. However, this is not correct.

Filing your income tax return and discharging your tax liability are two separate responsibilities.

Who Needs to File an ITR?

This is the first article in a series on ITR. Here, we explain who must file an ITR. If you meet any of the criteria below, you must file your ITR even if you do not have any income in India.

Gross Total Income Exceeding Basic Exemption Limit

You must file your ITR if your total income before deductions under various sections like 80C, 80CCC, 80CCD, 80D, 80E, 80G, 80GGA, 80TTA, and 80TTB exceeds the basic exemption limit. These sections cover deductions for investments and payments such as PPF, NPS, ELSS, NSC, home loan principal repayment, school fees, life insurance premiums, medical premiums, donations, education loan interest, and rent for self-employed individuals.

• Basic Exemption Limit (FY ending 31 March 2024):?2.50 lakh for ordinary individuals?3 lakh for residents over 60 years?5 lakh for individuals above 80 years

In the new tax regime, the basic exemption limit is ?3 lakh for everyone, regardless of age. When calculating the basic exemption limit for ITR filing, include long-term capital gains for which you are claiming exemptions, such as investing in another residential property under Section 54.

Owning Assets or Having Signatory Authority Outside India

If you are an Indian resident for tax purposes and own assets outside India as a beneficial owner or have an interest in any foreign asset, you must file your ITR. This includes being an authorized signatory for any foreign account, even if no money is left in it.

Examples include:

• Foreign bank accounts opened during employment abroad
• Investments in foreign shares, bonds, or mutual funds
• Employee Stock Options (ESOPS)

High Expenditure on Specified Items

You must file an ITR if you have:

• Paid electricity charges exceeding ?1 lakh in the last year (even if the connection is not in your name)
• Spent more than ?2 lakh on foreign travel (for yourself or others)

Large Bank Deposits

Filing an ITR is mandatory if you have made significant deposits in your bank accounts:

• Over ?1 crore in aggregate in current accounts
• Over ?50 lakh in aggregate in savings accounts

Deposits include cash, cheques, bank drafts, or transfers.

High Turnover or TDS

You must file an ITR if:

• Your business sales exceed ?60 lakh
• Your professional receipts exceed ?10 lakh
• Tax deducted or collected exceeds ?25,000 (?50,000 if you are over 60 years old)

Conclusion

Understanding who needs to file an ITR is crucial for compliance with tax laws. At FIRSTCOMPANi, we help individuals and businesses in India and GCC countries (Saudi Arabia, UAE, Kuwait, Qatar, Oman, Bahrain) navigate their tax responsibilities. For more information or assistance, visit FIRSTCOMPANi.com or call 9048933300.