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Filing of Income Tax Return (ITR) filing is mandatory in the Following cases:

(1) Benefit an individual, If the income exceeds the basic exemption limit, before claiming deductions under chapter VIA of Income Tax Act (which h called as Gross Income) in or for a financial year, then you are required to file Income Tax Return. The rule applies to Non Residents also, for their income which accrues or arises in India (ITR Form for Non Resident is ITR-2). Filing of Income Tax Return is mandatory irrespective of the fact whether lax has been Deducted/Collected at Source or not, so long as the income is above taxable limits.

The bask exemption ‘limit varies in cases of various Individuals depending upon the age of person filing Income Tax Return. Currently i.e. for Assessment Year 2019-20 relevant to F.Y.2018-19, basis exemption limits are as follows:

Particulars of Individuals Amount (in Rupees)
For Individuals of age below 60 years 2,50,000/-
Senior Citizens of age 60 years or more but below 80 years. 3,00,000/-
Senior Citizens of age 80 years or more. 5,00,000/-

Due dates for filing of Return:

SI. Dates Particulars
1 31st July Annual return of income for the assessment year 2019-20 if the assessee is not required to submit return of income on September 30th, 2019 or November 30th, 2019.

Date for A.Y. 2019-20 been extended to 31.08.2019.

2 30th September Annual return of income for the assessment year 2019-20 if the assessee is (a) corporate-assessee or (b) non-corporate assessee or (c) a trust, whose books of accounts are required to be audited or (d) working partner (of a firm whose accounts are required to be audited).
3 30th November Annual return of income tax for the assessment year 2019-20 in the case of an assessee if he is required to submit a report under section 92E pertaining to international transaction(s).

2. If anyone wants to claim Refund.

3. If anyone wishes to carry forward any Loss/es under any head of income to the next year.

4. If anyone has on Asset or Financial Interest in an Entity locoted outside India. This point is applicable only to Individuals resident in India.

5. If any one a Signing Authority for Foreign bank Account. This point is applicable only to Individuals resident in India.

6. Every Partnership Firm, Limited Liability of Partnership and Company.

7. Every Trust (charitable/ religious/political/research association etc.) which derives Income from the activities/ property held by trusts and the income of it exceeds the bask exemption limit, before claiming exemptions under S.11 and S.12 of the Income Tax Act.

8. Every Political Party, income of which exceeds the basic exemption limit, before claiming exemption under S. 13 A of the Income Tax Act.

9, Every research association, news agency, association or Institution, fund, university, other educational limitation, any hospital or other medical institution, trade union or body or authority or Board or Trust or Commission, infrastructure debt fund, Mutual Fund or securitisation trust or venture capital company or venture capital fund etc incomes of which exceed The basic exemption limit, before claiming exemption under S.10 of the Income Tax Act.

E- Filing of Income Tax Returns is mandatory in the following cases:

Income Tax department accepts only online return in the cases where-

♦ The gross total income of person exceeds Rs.5,00,0O0/-

♦ A person wishes to claim refund from the Department.

♦ Books of account ore required to be audited u/s 44AB of the Income Tax Act.

Is There any benefit of filing return If income of any Individual or HUF does n of exceed basic exemption limit i.e. Rs.2.5 lakh?

If your Income doesn’t exceed Rs. 2,50,000/- during the year, then you are not legally bound to file your Income Tax Return. However, the Income Tax Ad does not prevent or restrict you from filing your income Tax Return. It Is advisable that even if you are not legally bound to file your Income Tax Return, you should file it, as filed Income Tax Return may be of use In following situations (illustrative only):

Accidental Claims: In the cases involving accidental claim against insurance companies, the court may apply simple formula to arrive at the claim amount by multiplying the yearly income In ITR with years of expected life of deceased.

Proof of Income / Proof of Net Worth: The best authentic document in support of claim of income level is the Income Tax Return of the person.

Eligibility in Loan Application: Income Tax Returns of last Three years are one of the basic documents required for loans.

Obtaining Visa: Foreign embassies/consulates of many countries ask you to furnish last 3 years’ Income Tax Returns or current year’s Income Tax Return while applying for a visa.

For Startup Funding: If you are looking to raise funds, keep in mind that may investors study Income Tax Returns to adjudge the business stability, profitability and other cost parameters In the business.

Protection against Suspicious Black Money: Income Tax Return of every year substantiates the income which will not be at risk of being termed as block money, as any income not reported to Income Tax Department comes under the suspicion of black money.

Buying Insurance Policy with high life cover: Some insurance companies always ask for Income Tax Return while providing high life cover to verify your annual income.

Obtaining Government Tender: Very often, when government lender of high value is being awarded, furnishing Income Tax Return is a must to apply for it to justify the business credentials of a bidder especially.

Credit Card Application:If anyone warns to hove a high limit Credit Card then your Income Tax Return may help to get it.

Consequences of Not Filing of Income Tax Returns within Time:

♦ One cannot carry forward any of the losses incurred during the year to next year.

Fee for Late Filing of Income Tax Return for AY 2018-19:

From A.Y.2018. 19, a fee of Rs 5,000/. will be charged If an ITR is filed after the due dote and up to 31 December of Assessment Year, and Rs.10,000/. if it is filed between 1st January to 31 March of such Assessment Year. The amount of late fee Is required to be paid before filing the Income Tax Return.

If the total income of the person doesn’t exceed Rs.5 lakh, the maximum late fee is Rs. 1,000/-.

♦ Interest for Late Fling of Income Tax Return/non filing of Income To x Return:

In case a person fails to file the return in time or fails to file return at all, then he is liable to pay interest as per provisions of Sec. 234A of Income tax Act @1% p.m. on the shortfall in tax payable

Time limit for filing a Belated Tax Return

An Income tax return filed after the due date stipulated u/s.139(1) of the Income Tax Act but filed before 31st March of the relevant assessment year. For example, the belated ITR for A.Y. 2018-19 needs to be filed before 31st March 2019.

(Besides penalties and disadvantages that when your return is not filed by the due dot; the income tax deportment may send you a notice of inquiry to ask you to file the return online as per the date specified in the notice).

Best judgment assessment (Assessment under section 144):

The Income Tax Deportment may make a best judgment assessment in the following cases:-

1. If the taxpayer fails to file the return required, and

2. If the taxpayer fails to comply with the terms of a notice Issued under section 142(1).

Reopening of case:

If you ore required to file ITR and you don’t file it at all, Income Tax Department may send you a notice u/s.148 of the Act up to 6 years from the end the relevant assessment year to reopen your case for taxing your income for that assessment year which has escaped assessment.


If you have taxable income and do not file the return of Income, you may end up paying penalty for under-reporting or misreporting of income. The penalty leviable may go upto 200% of the tax on the under reported/misreported income.

Prosecution for Failure to Furnish Return of Income:

In case you fail to furnish the return of income, you may receive notice of prosecution u/s 276CC from your assessing officer. Section 276CC provides for rigorous imprisonment for a term up to 7 years and fine.

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One Comment

  1. Shubham Kumar says:

    If turnover of firm is NIL or very low income (other income) like Rs. 5000/-, and we are claiming expense Of due to which their is loss.

    Tax Audit is mandatory or not?

    If not mandatory, then also can we do Tax Audit in this case?

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April 2024