You have to file ITR if you carried out any of these eight transactions

According to the Income Tax Act, 1961, if someone’s income falls below the basic exemption limit of Rs 2.5 lakh under the old tax regime or Rs 3 lakh under the new tax regime, then filing ITR is not always mandatory. However, the tax rules state that even if the taxpayer’s income is below the basic exemption limit, They must file an ITR if they engage in specified transactions. Currently, there are eight such transactions have been specified.

Conditions under which ITR filing is mandatory even if your annual income is below Rs 2.5 lakh

The table below shows the conditions under which ITR filing is mandatory even if your income is below the basic exemption limit (Rs 2.5 lakh under old regime/ Rs 3 lakh under new regime)

Source: Tax2win

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Do you need to file ITR if you have any foreign assets or foreign income?

Many resident individuals invest in shares of foreign companies. Consequently, they may receive dividends from these foreign shares.

According to Section 139(1) of the Income-tax Act, ITR filing is mandatory if a resident individual owns assets such as shares, bonds of foreign companies; a house in foreign countries; or has income such as dividends, interest or rent from foreign countries. ITR filing is mandatory even if a person has signing authority in any account outside India.

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There may be cases where an individual invests his money in foreign assets in his parent's name as the parent's income is below the basic exemption limit. In such cases also, ITR filing is mandatory for the parent.

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Late fee for not filing ITR after the due date

If someone files an income tax return after the deadline, they may face a late filing fee wherever it is mandatory to file.

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According to Section 234F of the Income-tax Act, 1961, a late filing fee will be charged. If filing an ITR is mandatory and the income is below the basic exemption limit, a penalty of Rs 1,000 will apply. This penalty of Rs 1,000 kicks in if the taxable income is not more than Rs 5 lakh.

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There could be a a situation where income is above the basic income exemption limit and the individual meets the other criteria mentioned above, like spending over Rs 2 lakh on foreign travel. In that case, filing an ITR is necessary under Section 139(1) of the Income-tax Act, 1961.

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