Is It Mandatory To File An ITR Below Rs 2.5 Lakhs?

Income tax is a subject which most people do not prefer to discuss unless they are complaining about it. However, it is the cost of doing business and earning an income within the sovereign boundaries of a country. There are two facets of income tax. One is the payment of tax liability or the amount due in the form of taxes and the other is the file an ITR which is basically a detailed break up of the table income and the calculation of taxation on such income thereof.

Unlike western countries which charge taxation at a flat rate for all citizens, India follows a slab rate system where the rate of taxation is different for different economic groups. And people with an annual income below a certain threshold are completely exempt from taxation. Currently anyone who earns less than ₹ 2.5 lakhs per annum is exempt from taxation. So the question arises. Is It Mandatory To File an ITR Below Rs 2.5 Lakhs? This is the question we will be answering in this article. 

File An ITR: What Is an Income Tax Return?

An IT return gives you a complete picture of the total taxable income earned during a year and taxes paid on it. Anyone who earns an income in India is subject to file an ITR on or before 31st August of the financial year. Generally, most of us have a question: is it compulsory to file an ITR below 2.5 lakhs? The answer is yes. Even if there is no taxable income, it must be declared in the income tax return that there has been no income above the taxable threshold for the year. Let’s see the exemption and tax slabs in detail and taxable income is more than basic exemption limit.

For individuals aged above 60 years but less than 80 years, the exemption limit is Rs. 3 lakh. For individuals whose age is above 80 years, the exemption limit is Rs. 5 lakh. The income might be at any source as follows:

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However, an exemption from income tax doesn’t imply exemption from filing a IT returns. A return where the tax liability is zero and the taxable income is below the taxable threshold is called a ‘Nil Return.’ It is compulsory to file an ITR whether you have earned tax except for the super senior citizens i.e 80 and above 80 years. 

File An ITR: Income Tax Return filing

To file an ITR, one must be enrolled on the e-filing website of the income tax department. For filing the IT returns online, there are specific methods to fill from the website. After completing the form from the e-filing, follow the below 10 steps for ITR filing:

1. Collect the required documents such as TDS (Tax Deducted at Source), capital gains statements. The documents such as Form 16, salary slips, and interest certificates. These documents will help you compute your gross taxable income and will provide you with the details of the TDS from your income.
2. Download and analyze Form 26AS – It is your tax passbook which consists of all the details of the tax that has been deducted from your income and deposited against your PAN. 
3. Rectify the errors in Form 26AS – If the amounts shown in the TDS certificates and Form 26AS do not match, then you must discuss with your deductor to get the errors rectified. The deductor can be your employer, bank or others and ask him to change the details.
4. Compute total income for the financial year – Total income is computed by adding incomes from five different heads and claiming all the relevant deductions allowed under the Income Tax Act and setting off losses if any.
5. Compute your tax liability – You have to calculate your tax liability by applying the tax rates as per your income slab.
6. Calculate final tax payable, if any – Once the above step is completed, deduct the taxes that have been already paid by you through TDS, TCS and Advance Tax during the year.
7. File an ITR  – File an ITR after all taxes are paid. While filing your ITR make sure that you are using the correct ITR form to file it. 
8. Verification of ITR- There are 6 ways to verify your ITR. Out of this, 5 are electronic systems and one is physical verification. You have 120 days to verify it. If you do not verify your ITR, then it will be deemed as you have not filed ITR.
9. E- verification acknowledgement – You will be receiving an electronic method confirmation from the tax department regarding verification of your ITR.
10. The IT department will process the return after verification – The income tax department will start processing your tax return. This is to assure you that all the details filled by you are correct as per the Income Tax Act.

e-Filing Income Tax

It’s simple and easy to do e-filing of your tax returns. We have devised a 3 step process for smooth filing.

1. We collect the required documents from you
2. The return is prepared according to the information that you have provided
3. Now, the return is ready for e-filing.

Conclusion

Hence, it is compulsory for ITR filing for income less than Rs 2.5 lakhs. And for the people whose gross total income is above Rs.2.5, it is mandatory to file an ITR. Filing ITR also helps in easy loan approval, claim a tax refund, quick visa processing, and avoid penalties. taxable income is more than basic exemption limit

FAQ

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• Do I Need to File an ITR if Income Is Less Than 5 Lakhs
• Who Is Not Required to File Income Tax Return
• Minimum Income to File Tax Return India