Over the past few years, the Central Board of Direct Taxes (CBDT) has made it mandatory to file the ITR for many purposes. On April 2022, the tax organisation issued a notice making it mandatory to file ITR for business turnover, professional receipts, bank deposits, and spending – applicable from AY 2022-23. Even if you are not mandatorily required to file ITR, there are many advantages of filing one.
Who must file an ITR?
If your overall income before claiming tax exemption is more than Rs 2.5 Lakh per annum, you must file an Income Tax return. As per Income Tax Act 1961, the exemption limit for taxable income is as follows:
|Age (in years)||Basic Exemption Limit for taxable income (In Rs)|
|Less than 60||Rs 2.5 Lakh per annum|
|60 to 80||Rs 3 Lakh per annum|
|Greater than 80||Rs 5 Lakh per annum|
Additionally, even if the income is less than Rs 2.5 Lakh, ITR filing is mandatory in the following cases:
- If the expenditure is > Rs 2 Lakh when travelling abroad.
- If the expenditure is > Rs 1 Lakh on electricity in a financial year.
- Holding foreign income and assets.
- For a deposit of more than Rs 1 Crore in one or different accounts.
- If the individual is subject to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) for Rs 25000 or more.
The benefits of filing ITR
- One of the primary advantages of filing ITR is the feature of reclaiming the additional taxes paid for a financial year. Also, if you want to list an expense in deductions because higher TDS was cut from your salary and you’ve missed informing your employer, you can do so by filing ITR.
- By filing ITR, you can claim a refund of TDS against payments which otherwise weren’t going to be taxed.
- If you fall under the Rs 2.5 Lakh to Rs 5 Lakh income category, you’re eligible for Rs 12,500 rebate under section 87A.
- Also, when you file ITR, applying for a credit card, filing an application for a visa, availing of a loan, and other such processes become much easier. The ITR receipt can be used as address proof.
Filing an ITR makes it easier for you to apply for credit or a loan or a visa, carry forward your losses, claim TDS refunds, and help the nation financially. The last date to file ITR for AY 2022-23 is 31st July.
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