Income Below Taxable Limit: New Ruling In Which Case You Are Required To File ITR

For income tax assesses carrying out high ticket size transactions but reporting income below the exemption limit, there is given a mandate to file returns as per the official order. As of now the income tax exemption limit is Rs. 2.5 -5 lakh. The higher limit of Rs. 5 lakh is in case of individual's aged above 80 years and more.

So, as per the Income tax (Ninth Amendment) Rules, 2022, in some of the cases varied tax payer categories including individuals, professional and proprietorship concerns will need to file taxes even if their income is below the tax exemption limit.

Here are described below cases in which filing of ITR has been made mandatory even if the income is below the exemption limit:

1. Individuals or proprietorship concerns with sales or gross receipts from business over Rs. 60 lakh in the previous year, gross receipts from profession exceeding ₹10 lakh in the previous year, and if the aggregate of tax deducted at source (TDS) and tax collected at source (TCS) during the previous year is ₹25,000 or more. But for those aged above 60 and more in India, the threshold is Rs. 50000 in a savings account deposit.

2. Those who have made deposits of Rs. 50 lakh or more in a savings account deposit:

Such individuals also need to file their ITR whether or not their income is below or above the threshold limit.

The above is an attempt to widen the tax filing base and reduce the incidence of tax avoidance. "The tax department would have an opportunity to reconcile the reported income with their operations/savings and may send a notice if any further enquiry would be required," said Amit Maheshwari, partner at AKM Global, a tax consultant.

Currently, the Act already necessitates those with income below the taxable limit but having carried out the following transactions to file ITRs:

1. Assesses who have deposited Rs. 1 crore in the current account.

2. Those who have spent Rs. 2 lakh on foreign travel or those who have spent Rs. 1 lakh as electricity bill.