This article focuses on the provisions laid down in the Income Tax Act, 1961 with respect to mandatory filing of a Return of Income (conveniently known as ITR) by an Individual.
So, what is an ITR or Return of Income after all?
ITR or a Return of Income is basically a format in which assessee furnishes information of his income from all the sources and tax liability arising from such income.
| Particulars | Amounts (Rs.) |
| Income from various Head of Income | XXXX |
| Gross Total Income | XXXX |
| Less: Deductions under chapter VI-A | XXXX |
| Total Income (Gross Total Income less the Deductions under chapter VI-A) | XXXX |
| Tax on Total Income | XXXX |
| Health & Education Cess on Tax | XXXX |
Above mentioned table is a brief format of Computation of Income
As seen in the above table, assessee is required to furnish the information regarding Income earned under various heads of income, aggregate of which is known as Gross Total Income. Then to arrive at Total Income (on which the Tax is calculated), assessee is required to subtract Deductions (for example, life insurance premium paid, tax saving investments, medical insurance premium paid, etc.) from the Gross Total Income.
This format is notified every year by the Central Board of Direct Taxes.
To summarise, ITR is a pre-defined format in which an assessee declares his/her income and taxes.
Who all are compulsorily required to file an ITR under the Income Tax Act, 1961?
- Companies and partnership firms (including Limited Liability Partnership Firms) are compulsorily required to file a return of income or even if there is a loss.
- For assessees other than Companies and Partnership Firms i.e. Individuals, HUFs, Association of Persons, Body of Individuals, Trusts, etc. – they are required to file an ITR only if their Gross Total Income exceeds basic exemption limit.
- Basic exemption limit for individuals is Rs. 2,50,000.
- For Senior Citizens (individuals above the age of 60) it is Rs. 3,00,000.
- For Super Senior Citizens (individuals above the age of 80) it is Rs. 5,00,000.
Individuals whose Gross Total Income is not exceeding the basic exemption limit but are still required to file an ITR
An individual, being a resident in India, who is not required to furnish an ITR in case his income is not exceeding basic exemption limit (amounts mentioned above), is still required to file an ITR if:
- He/she holds, as a beneficial owner or otherwise, any asset (including financial interest in any entity) located outside India or has signing authority in any account located outside India or
- He/she is a beneficiary of any asset (including any financial interest in any entity) located outside India or
- He/she has deposited an amount or total amounts exceeding Rs. 1 Crore in bank accounts (including co-operative bank accounts) or
- He/she has incurred expenditure of an amount or total amounts exceeding Rs. 2 Lakhs on travel to a foreign country for himself/herself or for any other person or
- He/she has incurred expenditure of an amount or aggregate of the amounts exceeding Rs. 1 Lakh towards electricity consumption or
- He/she wants to claim an income tax refund or
- He/she wants to carry forward a loss under any head of income.
This is just an piece of opinion, please consult your tax advisor before taking any decision.
CAclubindia
