Income Tax News: Should You File ITR Below Rs 6 Lakh Income? Here's What the Rule Says

Income Tax News: In India, filing Income Tax Returns (ITRs) is a yearly requirement for all taxpayers, regardless of their taxable income. Knowing your filing requirements and the repercussions of non-compliance is essential, even if your income is below the taxable level and you owe no income tax.

Who Needs to Pay Income Tax?

Taxable Income Limits: For the fiscal year 2023–2024, income tax exemptions for persons under 60 years of age apply provided their annual income does not exceed Rs 2.5 lakh. The cap is Rs 3 lakh for elderly persons 60 to 80 years of age, and Rs 5 lakh for those beyond 80.

Filing Obligations

Claiming Refunds: Your income may have been paid in advance tax or through TDS (Tax Deducted at Source) even if it is below the taxable limit. You can get your taxes refunded by filing an ITR.

Carrying Forward Losses: Filing an ITR is required if you have losses from the current year that you wish to carry forward and deduct from future gains.

Visa and Loan Applications: You can satisfy the requirements of numerous financial institutions and embassies by producing your ITR, which serves as proof of tax compliance.

Consequences of Not Filing ITR

Penalties and Interest: Penalties are levied by the Income Tax Department for late ITR filing. Depending on the length of the delay and your overall income, you could be penalised up to Rs 5,000 if you miss the deadline, which is typically July 31st of the assessment year.

Legal Implications: Willful failure to file an ITR may result in prosecution among other legal repercussions. This is particularly relevant if you purposefully avoid reporting taxes while having large liability.

Financial Restrictions: Your ability to obtain certain bank accounts, apply for loans, and obtain visas may be restricted if you fail to file your ITR. ITRs are frequently needed by financial institutions as evidence of income and tax compliance.

In order to stay in compliance with Indian tax regulations and preserve financial discipline, you must file an ITR even if your income is less than Rs 6 lakh and you owe no taxes. It guarantees you won't be subject to fines or lawsuits from the Income Tax Department. Additionally, it makes financial transactions easier and offers a record of revenue that is useful for a number of reasons.

To put it simply, even if you don't have any taxable income, filing an ITR is still a wise financial move that will help you stay out of trouble with the law, get refunds, and keep your tax history spotless. It's a move in the right direction for financial transparency and regulatory compliance in India.