As per the recent Government norms, all the citizens will have to file an income tax return or ITR if the average tax collected at source (TCS) and tax deducted at source (TDS) crosses over ₹25,000 in a fiscal year. This rule will still be applied if a citizen’s income is lower than the taxable limit.
As per the notification issued by the Central Board of Direct Taxes (CBDT) on April 21, 2022, “it is compulsory to file an income tax return even when the individual’s income is less than the basic exemption limit.”
Income-tax (Ninth Amendment) Rules, 2022 notifies us that “conditions for filing income tax returns in terms of clause (iv) of the seventh proviso to sub-section (1) of section 139 Income Tax Act, 1961. A new rule 12AB has been inserted in the Income-tax Rules, 1962, to mandate the additional provisions when furnishing a return of income tax is mandatory.”
ITR Filing Is Mandatory Under These Four conditions:
- ITR filing is mandatory if in a previous year total sales or turnover in the business exceeds ₹60 lakh.
- If a person’s professional income exceeds ₹10 lakh in a year then he is also bound to file
- If TDS or TCS exceeds the benchmarked limit of ₹25,000 then he or she is supposed to file an ITR. However, the same limit in case of a senior citizen becomes ₹50,000 to file an ITR.
- On average if a person holds an amount of ₹50,000 lakh or more in his one or more savings account then is liable to file an ITR.
An explanation from Balwant Jain, a tax and investment expert says, “With this new provision, the income tax department wants to expand the taxpayers’ base and reduce the incidence of tax avoidance. If an individual has a TDS of Rs 25,000 in a year, his or her gross income likely to be more than Rs 2,50,000 in a financial year which is the basic tax exemption limit. In this case, it is a must to file an income tax return.”