Even If Your Income Is Below Taxable Limit, You May Need To File Income Tax Returns This Year: Find Out Why?
Despite the ups and downs that we all have seen during this pandemic financially, we will still be required to file for the income tax returns this time.
Yes, IT returns will be required to be filed for the financial year 19-20 even if the income does not meet the taxable limit.
Read on for all the details about filing your ITR!
Verify This Criteria For Filing ITRs Even If Your Income Is Below Taxable Limit
Last year, to detect tax evaders, the government had introduced a set of criteria that would be effective from the FY20. This made the individuals liable to file the IT returns.
In simple words, even if an individual’s gross total income is below the threshold limit of Rs. 2.5 lakh for individuals below 60 years, Rs. 3 lakh for individuals between the age group 16 to 79 years, Rs. 5 lakh if the individual is more than 80 years, the individual will be liable to file ITI if the new criteria are met.
Here are the criteria that should be met to file the ITR:
The seventh proviso to Section 139(1) of the Income-tax Act, 1961, states that a person will be required to find an ITR if he meets any one of the following criteria
- Paid and electricity bill of Rs. 1 lakh or more during the year
- Has incurred an expenditure of Rs. 2 lakh or more during the year full travelling to a foreign country, be it for self or any other person. There is an exception to this rule which states that the foreign driver does not include travelling to any neighbouring countries or any place of pilgrimage as told by the tax department.
- Has deposited a sum of more than Rs. one crore or more in one or more current accounts.
Experts have said that any taxpayers who will be filing for these criteria be required to keep a record of all the documents that support the claims to respond to the tax department queries if asked.
As per reports, the tax exemption on capital gains no longer be applicable while calculating the minimum income that will be exempted from tax.
If your income before asking for an exception under Sections 54 to 54 GB is more than the basic exempted limit you will have to file the ITR.
For instance, if your gross total income is Rs. two lakh and the capital gains have Rupesh 3 lakh on the sale of a house which has been invested under section 54ec in order to claim exemption then you will be asked to file ITRs. The reason behind this is that your gross total income will be considered as Rs. 2 lakh + Rs. 3 lakh; 5 lakh in total.
If you don’t have any income in India but have any foreign assets you will be required to file ITRs.