Filing of Income-tax return is mandatory for every person whose income (before considering certain exemptions and deductions) exceed maximum exemption limit. With effect from Assessment Year 2020-21, it is mandatory for every person, who is not required to furnish return of income under any other provision of section 139(1), to file return of income if during the previous year he:
1.) Has deposited an amount (or aggregate of amount) in excess of Rs. 1 crore in one or more current account maintained with a bank or a co-operative bank.
2.) Has incurred aggregate expenditure in excess of Rs. 2 lakh for himself or any other person for travel to a foreign country.
3.) Has incurred aggregate expenditure in excess of Rs. 1 lakh towards payment of electricity bill.
4.) Fulfils such other conditions as may be prescribed.
The CBDT vide notification No. 37/2022, dated 21-04-2022, has notified additional conditions under the seventh proviso to section 139(1) whereby return filing is made mandatory. These additional conditions are as follows:
1) If total sales, turnover or gross receipt of the business exceeds Rs. 60 lakh during the previous year; or
2) If total gross receipt of profession exceeds Rs. 10 lakh during the previous year; or
3) If the total of tax deducted and collected in case of a person during the previous year is Rs. 25,000 or more. The threshold limit shall be Rs. 50,000 in case of a resident individual of the age of 60 years or more; or
4) If the aggregate deposit in one or more savings bank accounts of the person is Rs. 50 lakhs or more during the previous year.
- Even when the advance taxes have been paid, the same need to be reported to the Department through Income-tax return filing procedure.
- This completes the self-assessment of income and taxes are computed on the same.
- Failure to file the income tax return will attract levy of penalty.
- Form 26AS reflects the taxes which have been reported by the third party to whom the taxes have been deposited or by whom the taxes have been deducted.
- Income-tax return helps in reconciling the records as submitted by assessee and as per Income-tax department records.
- Assessee claims refund.
Source: Income Tax India’s Official Website