Income Tax: 10 situations where ITR filing is mandatory

The last date for filing Income Tax Return (ITR) filing for the financial year 2016-17 is approaching fast and the taxpayers are left with just five days. 

If you are still thinking whether you are eligible to file ITR or not, then we give you 10 situations as per the Income Tax Act which makes it mandatory for an individual to file ITR in India:

1. Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs.2,50,000 in the FY 2016-17. This limit is Rs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) or Rs 5,00,000 for super senior citizens (who are more than 80 years old)

2. You are a company or a firm irrespective of whether you have income or loss during the financial year. 

3. You want to claim an income tax refund.

4. You want to carry forward a loss under a head of income.

5. You have exempt long term capital gains from – sale of equity shares in a company OR sale of unit of equity oriented mutual funds, OR sale of unit of business trust, of more than Rs 2,50,000 in a financial year. Even though these gains are exempt from tax, such persons have to mandatorily file an income tax return.

6. Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs)

7. Or if you are a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs)

8. You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.

9. If you are a foreign company taking treaty benefit on a transaction in India. A proof of return filing may also be required at the time of applying for a loan or a visa.

10. NRI or not, any individual whose income exceeds Rs.2,50,000 (for FY 2016-17) is required to file an income tax return in India. NRI, income earned or accrued in India is taxable in India.

If you are still thinking to avoid filing ITR, then be ready to pay penalties. Under section 271F, the assessing officer may levy a penalty of Rs 5,000 when you have not filed your return. This penalty is only till this year. 

From ITR FY 2017-18, penalty of Rs 5,000 is applicable if Return for FY 2017-18 is filed after due date (31st July 2018) but by 31st December 2018. Penalty of Rs 10,000 is applicable if Return for FY 2017-18 is filed after 31st December 2018 but by 31st March 2019.

Hence, save yourself from penalties and file ITR before the due date. 

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