In this post, we will look at the provisions relating to mandatory Income Tax Return filings.
Section 139 (1) of the Income Tax Act,1961 lists the provisions relating to mandatory filing of ITR. We shall discuss them here pointwise as under :
Who is mandatorily required to file Income Tax Returns?
1. Every Company or Firm shall have to mandatorily file the ITR irrespective of Income. Here Firm includes a Partnership firm and an LLP.
2. In case of any other person (i.e. other than Firm or Company), the ITR has to be filed mandatorily if the total income exceeds the maximum amount which is not chargeable to tax. In simple words, If the total income is above the basic exemption limit, then ITR is to be filed mandatorily.
The above clause has been amended and now every individual, HUF, AOP, BOI, etc. has to mandatorily file the ITR if its total income without considering the deductions u/s 10(38), 10A, 10B, 10BA, 54, 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB or deductions under Chapter VIA exceeds the basic exemption limit.
The above can be explained with the help of the following example :
(a) Mr. X is having total income of Rs.2.75 lakhs during the F.Yr.2022-23. However, he had invested Rs.40,000 in PPF. Is he liable to file ITR for F.Yr.2022.23?
The total income of Mr. X is exceeding the basic exemption limit of Rs.2.75 lakhs. However, he has invested in PPF of Rs.40000 which qualifies for Chapter VIA deduction and after the same his income gets reduced to Rs.2.35 lakhs.
Still he will be mandatorily required to file an ITR for F.Yr.2022-23 since the deduction under Chapter VIA is not to be considered for analyzing the limit for the purpose of filing of ITR.
3. There are three other categories of persons who are mandatorily required to file ITR irrespective of their income. They are :
(i) Any person who has deposited an amount of Rs.1 Crore or more in any current account maintained with Banks (Scheduled bank or co-operative bank)
(ii) Any person who has incurred an expenditure of Rs.2 lakhs or above in respect of any foreign travel (for himself or for any other person)
(iii) Any person who has incurred expenditure of Rs.1 lakh or above in respect of payment of Electricity bills
4. With effect from 21-4-22, there are some more conditions added for which ITR is mandatorily required to be filed. They are as under :
(i) If the total sales, turnover, gross receipts of the business exceeds Rs.60 lakhs during the year
(ii) If the total receipts in case of Profession exceeds Rs.10 lakhs during the year
(iii) If the total Tax deducted at Source or Tax Collected at Source in case of person exceeds Rs.25000 during the year. However, in the case of Senior Citizens, this limit is Rs.50,000.
(iv) If the deposits in one or more savings bank accounts during the year are Rs.50 lakhs or more
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