Draft Income Tax Rule 163 – Conditions for furnishing return of income by persons other than a company or firm referred to in section 263(1)(a)(x) of the Act
Draft Rule 163 of the Income-tax Rules, 2026 prescribes specific financial thresholds that require persons other than a company or firm to furnish a return of income under section 263(1)(a)(x). An individual must file a return if, during a tax year, he deposits more than ₹1 crore in one or more current accounts with a banking or co-operative bank; incurs expenditure exceeding ₹2 lakh for foreign travel for himself or any other person; or spends over ₹1 lakh on electricity consumption. Filing is also mandatory if total business sales, turnover or gross receipts exceed ₹60 lakh, or if professional gross receipts exceed ₹10 lakh. Additionally, return filing is required where aggregate tax deducted or collected at source is ₹25,000 or more (₹50,000 in case of resident individuals aged 60 years or above), or where savings bank deposits aggregate to ₹50 lakh or more. For the purpose of this rule, “travel to a foreign country” excludes travel to neighbouring countries or specified pilgrimage destinations as notified by the Board. The provision expands the scope of mandatory return filing by linking it to high-value financial and consumption indicators, thereby strengthening reporting and widening the tax base.
Extract of Rule No. 163 of Draft Income-tax Rules, 2026
Rule 163
Conditions for furnishing return of income by persons other than a company or firm referred to in section 263(1)(a)(x) of the Act.
(1) The conditions required to be fulfilled in a tax year for the purposes of for furnishing return of income in respect of persons other than a company or firm referred to in section 263(1)(a)(x) shall be the following, namely:—
(i) if he has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current accounts maintained with a banking company or a cooperative bank; or
(ii) if he has incurred expenditure of an amount or aggregate of the amounts exceeding ₹ 200000 for himself or any other person for travel to a foreign country; or
(iii) if he has incurred expenditure of an amount or aggregate of the amounts exceeding ₹ 100000 towards consumption of electricity; or
(iv) if his total sales, turnover or gross receipts, as the case may be, in the business exceeds sixty lakh rupees; or
(v) if his total gross receipts in profession exceeds ten lakh rupees; or
(vi) if the aggregate of tax deducted at source and tax collected at source, in the case of the person, is ₹25000 or more, so however, that in the case of individual resident of the age of sixty years or more, the amount shall be taken as ₹50000 or more; or
(vii) if he has deposited in his one or more savings bank account, in aggregate, fifty lakh rupees or more.
(2) For the purposes of this rule, the expression “travel to a foreign country” does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette.
