ITR Filing Below Basic Exemption Limit

What is Basic Exemption Limit?

The basic exemption limit is the threshold amount that determines whether an individual is required to pay income tax. According to the rules of the Income Tax Department, an individual is generally required to file an Income Tax Return (ITR) if their taxable income exceeds the basic exemption limit.

If the taxable income is below this threshold, it is usually not mandatory to file an ITR. However, the basic exemption limit may vary depending on the income tax regime chosen by the taxpayer.

For the old tax regime, the basic exemption limit is Rs 2,50,000. Under the new tax regime, the basic exemption limit is Rs 3,00,000 for the Financial Year 2024–25.

Conditions when Taxable Income is less than Basic Exemption Limit

There are certain situations in which individuals must file an Income Tax Return (ITR) even if their taxable income is below the basic exemption limit. These conditions include the following:

1. If Deposits in Savings Accounts Exceed Rs 50 Lakhs

If an individual deposits more than Rs 50 lakhs in one or more savings bank accounts during the previous financial year, filing an ITR becomes mandatory.

2. If Bank Deposits Exceed Rs 1 Crore

If an individual deposits more than Rs 1 crore in current accounts with cooperative or commercial banks during a financial year, they must file an ITR.

This rule generally does not apply to businesses.

3. If Sales Turnover Exceeds Rs 60 Lakhs

If the total sales turnover or gross receipts exceed Rs 60 lakhs in a financial year, filing an ITR becomes mandatory.

4. If Professional Income Exceeds Rs 10 Lakhs

If an individual's professional income exceeds Rs 10 lakhs during the previous financial year, they are required to file an Income Tax Return.

5. If Electricity Bill Exceeds Rs 1 Lakh

If an individual pays electricity bills exceeding Rs 1 lakh in a financial year, either through a single payment or multiple payments combined, they must file an ITR.

6. If TDS/TCS Exceeds Rs 25,000

If the Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) for an individual is Rs 25,000 or more during the financial year, filing an ITR becomes mandatory.

For senior citizens, the threshold for TDS/TCS is Rs 50,000.

7. Income from Foreign Assets

An individual must file an ITR if they own foreign assets, are a beneficiary of foreign assets, or have signing authority in a foreign bank account.

8. If Expenditure on Foreign Travel Exceeds Rs 2 Lakhs

If an individual spends more than Rs 2 lakhs on foreign travel during a financial year, they are required to file an Income Tax Return.

9. Mandatory Filing for Carry Forward of Losses

It is mandatory to file an ITR within the due date if a taxpayer wants to carry forward losses to future years.

However, losses under the head Income from House Property can be carried forward even if the return is filed after the due date.

ITR Filing Minimum Income

The minimum income required to file an Income Tax Return depends on the age of the taxpayer and the tax regime selected.

As per the Old Tax Regime

• Age below 60 years: Income exceeding Rs 2.5 lakhs requires filing an ITR.
• Age between 60 and 80 years: Minimum income limit is Rs 3 lakhs.
• Age above 80 years: Minimum income limit is Rs 5 lakhs.

As per the New Tax Regime

Under the new tax regime, the minimum income threshold for filing an ITR is Rs 3 lakhs for all individuals, regardless of age.

Example of ITR Filing Below Basic Exemption Limit

Example:

If a taxpayer earns Rs 2,40,000 in a financial year but spends Rs 3 lakhs on foreign travel, they must file an ITR even though their income is below the basic exemption limit.