At what age can you stop filing income taxes?

Last Updated at: May 29, 2020
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At what age can you stop filing income taxes_
Senior citizens who are 60 years and above do not have to pay income tax if their income is less than Rs 3 lakh per annum. Individuals who are of the age of 80 years and above are liable to pay income tax if their income exceeds Rs 5 lakh.

 

It’s that time of the year again when you need to gear up for endless calculations, documentation and trips to the accountant – The Income Tax Returns filing season. One may reasonably wonder, till when does the return needs filing? Is there a specific age when you can stop filing income tax returns? We answer all this and more in this post.

Who needs to file ITR and till what age?

  • Tax filing, independent of age – An income tax return is compulsory for all residents earning beyond a prescribed threshold. Based on the financial year 2019-20, if your gross total income (excluding deductions) exceeds the basic exemption limit of ₹2.5 lacs worth of income, above which tax is charged, you need to file ITR. While income till ₹5 lacs per annum becomes tax-free, a return would still need to be filed if the income is between Rs.2 – 5 lacs. These returns have to be filed online, however, the department allows senior citizens aged above 80 to file paper returns.
  • New expenditure conditions introduced – There are several other conditions introduced by the Budget 2020, such as paying an electricity bill exceeding 1 lacs a year, or incurring expenditure exceeding 2 lac rupees on a foreign holiday, or withdrawing more than 1 crore from one’s bank account.

Thus, regardless of the age, if the earnings or expenditure or gains from selling an asset are beyond the government prescribed threshold, a tax return needs to be filed.

don’t forget to file your itr now

Erroneous beliefs about ITR filing

  • A minor doesnt need to file returns: True, in most cases as minors aren’t employed and do not earn a taxable income. However, in several cases, such as where a minor may be a child artist, earning on his or her own account based on his or her own talent, the tax will have to be paid in their own name.

  • Interest income for minors is not taxable: Even if you open savings or fixed deposits as a parent in the name of your child, the earning from the same is taxable. Moreover, this income will be clubbed in the income of the parent with higher income.
  • No need for a return if your employer deducts tax via Form 16: Even in case your employer deducts tax at source and issues Form 16, you’d still have to file a return in your name. This is necessary to ensure that the returns tally and that the tax paid is accurate. You can claim a refund in case excess tax has been deducted.
  • Tax returns are dependent only on income or gains: This is untrue. Irrespective of your salary, if you want to claim a tax refund or want to carry forward a loss, filing ITR is mandatory. Further, this financial year onwards, a high expenditure on electricity or foreign holiday would also attract tax.