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Filing ITR is Mandatory despite Income below Exemption Limit

CA Pallav Singhania , Last updated: 20 April 2024  

According to the Income Tax Act of India, individuals are mandated to file an Income Tax Return (ITR) only if their annual income surpasses the basic exemption limit.

However, certain circumstances necessitate filing an ITR even if one's income falls within the basic exemption limit. This article delineates such scenarios where filing an ITR becomes obligatory despite income falling below the exemption threshold.

  • Bank Deposits Exceeding ₹50 Lakhs: Individuals with annual savings bank deposits exceeding ₹50 lakhs across one or more accounts are mandated to file an ITR.
  • Current Account Deposits of ₹1 Crore or More: If an individual deposits ₹1 crore or more in one or more current accounts during the financial year, filing an ITR becomes mandatory.
  • Annual Sales Turnover Above ₹60 Lakhs: Individuals having an annual sales turnover surpassing ₹60 lakhs are obligated to file an ITR.
  • Professional Income Exceeding ₹10 Lakhs: Individuals whose professional income exceeds ₹10 lakhs during a financial year are required to file an ITR.
  • Electricity Bill Exceeding ₹1 Lakh: Filing an ITR is compulsory for individuals whose electricity bill surpasses ₹1 lakh during the year.
  • TDS/TCS Exceeding ₹25,000 (₹50,000 for Senior Citizens): If the Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) exceeds ₹25,000, filing an ITR is mandatory. However, for senior citizens, this threshold is ₹50,000.
  • Income from Foreign Assets: Individuals possessing assets in foreign countries or benefiting from assets in foreign jurisdictions must file an ITR.
  • Expenses on Foreign Travel Exceeding ₹2 Lakhs: Individuals spending ₹2 lakhs or more on foreign travel for themselves or others during the financial year are required to file an ITR.
Filing ITR is Mandatory despite Income below Exemption Limit

Consequences of Not Filing ITR by the Due Date (31st July 2024)

Late Fee Structure

  • A late fee of Rs. 1,000 is imposed on income up to Rs. 1,00,000.
  • For income exceeding Rs. 5,00,000, the late fee increases to Rs. 5,000.

Interest Charges (Section 234A)

  • Taxpayers are liable to pay interest at a rate of 1% per month or part thereof.
  • Interest accrues from the day following the ITR filing due date (31st July).

Legal Implications

  • Non-filing of ITR may be construed as tax evasion by tax authorities.
  • Potential consequences include imprisonment ranging from 6 months to 7 years.

Loss Carry Forward Eligibility

  • Failure to file ITR on time disqualifies taxpayers from availing the benefit of carrying forward losses.


Timely filing of Income Tax Returns is not just a legal obligation but also crucial for avoiding financial penalties and legal repercussions. Taxpayers must adhere to the prescribed deadlines to fulfill their tax obligations and maintain compliance with tax laws.

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CA Pallav Singhania
(❤ Work Hard, Party Harder ❤)
Category Income Tax   Report

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