Who Should File an Income Tax Return?

Filing of income tax return is a way of declaring the amount of income earned and taxes paid thereupon to the Government. Now the question arises, who should file the Income Tax Return? The Income Tax Act provides that a certain category of persons should compulsorily file their Income Tax returns every year within the due date specified. Let us discuss the same through this article.

Compulsory Filing of Returns

As per section 139(1) of the Income Tax Act, 1961, the following category of persons should compulsorily file their income tax returns-

1) Companies and Firms should mandatorily file their return of income or losses for every previous year within the specified due date in the specified form.

2) A return of income or loss for the previous year in such form and verified in such manner on or before the due date has to be filed by every person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under 139(1) and who at any time during the previous year,—

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

However, an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in clause (a) above in accordance with the provisions of Income Tax Act,1961.

3) Every person being an individual or a HUF or an AOP or BOI or an artificial judicial person, whose total income or the total income of any other person in respect of which he is assessable under this Act during the previous year without giving effect to the provisions of clause (38) of section 10 or section 10A or section 10B or section 10BA or section 54 or section 54B or section 54D or section 54EC or section 54F or section 54G or section 54GA or section 54GB or Chapter VI-A exceeds the basic exemption limit, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year.

A person who is not a company or a firm, who is not required to file return under section 139(1), would have to file income tax return in the prescribed form and manner on or before the due date, if during the previous year, such person has-

• Has spent an amount or aggregate of amounts exceeding Rs 2 lakh for himself/herself or any other person for travel to a foreign country;
• Has deposited an amount or aggregate of amounts exceeding Rs 1 crore in one or more current accounts maintained with a bank or co-operative bank;
• Has paid electricity bill exceeding Rs 1 lakh in a single bill or on aggregate basis during the financial year

Basic Exemption Limit

Basic exemption limit is the maximum amount which is not chargeable to tax under the Income Tax Act, 1961.The basic exemption limit is-

• 2,50,000/- for an individual or a HUF or an AOP or BOI or an artificial judicial person,
• 3,00,000/- for a resident individual of 60 years of age or more and
• 5,00,000/- for a resident individual of 80 years of age or more.