Conditions for Compulsory filing of Income-Tax Return: Budget 2019

CA Varun Kumar 
on 16 July 2019


It is a common understanding that an obligation file the return of income under the income-tax Act arises only if the income exceeds the maximum amount not chargeable to tax or when a person desires a loss sustained by him to be carried forward in future. For example, an individual tax payer is not required to file his return of income if his total income is less than Rs 2,50,000 and so on.

The Finance (no. 2) Bill, 2019 now proposes set of parameters for person’s enjoying benefit of threshold limit of exemption from tax; fulfillment of such parameters will now cast an obligation on such person to file his/her return of income even if the total income is less than the maximum amount not chargeable to tax. The conditions are as under -

A. For Individuals, HUF, association of persons, body of individuals and any other artificial judicial persons, if -

1. The total income exceeds maximum amount not chargeable to tax. Such income is to be calculated before taking any of the following benefit -

a. deductions like life insurance premium, investment in provident fund, etc are claimed or,

b. Where a specified asset is sold and any deduction is claimed for investments made in house property, notified bonds, and such other specified deductions or,

c. Before claiming exemption available, if any on sale of listed securities held for a period more than 12 months and securities transaction tax is paid on such transactions or,

d. Specified exemptions.

2. has deposited an amount or aggregate of the amounts exceeding Rs. 1 crore rupees in one or more current accounts held with a banking company or co-operative banks;

3. has incurred an expenditure of an amount or aggregate of the amounts exceeding Rs 2 lacs for himself or any other person for travel to a foreign country, however, travel to neighbouring countries or to such places of pilgrimage as the may be specified will not be considered as foreign travel;

4. has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity;

5. fulfills such other conditions as may be prescribed;

6. has incurred a loss either in business or on the investments held by him and desires that such loss be carried forward in future years;

7. Is a resident and who at any time during the previous year,

a. holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or

b. is a beneficiary of any asset (including any financial interest in any entity) located outside India

Note -

1. Conditions mentioned in serial no 2 to 5 above are proposed by the Finance (No. 2) Bill, and shall be applicable once the Bill receives the assent of the President.

B. For Firms and Company -

They are mandatorily required to file their return of income for each assessment year.


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