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In India, the obligation to file an Income Tax Return (ITR) is not solely based on having taxable income. Certain criteria necessitate the filing of an ITR, even if an individual's income falls below the taxable threshold. This article delves into certain specific conditions under which residents, other than those not ordinarily resident in India, must file their ITR.

1. Ownership or Beneficiary of Foreign Assets

A resident who holds or benefits from any asset (including financial interests) located outside India must file an ITR. This also applies if they have signing authority in any foreign account. This filing requirement aims to ensure transparency and accountability for international assets.

• Beneficial Ownership: If you are the beneficial owner or hold any asset abroad.
• Signing Authority: If you have signing authority in any account located outside India.
• Beneficiary of Foreign Assets: If you benefit from any foreign asset.

2. High-Value Financial Transactions

Certain high-value financial transactions within India also trigger the obligation to file an ITR. These transactions include:

• Deposits in Current Accounts: Depositing amounts exceeding Rs. 1 crore in one or more current accounts maintained with a banking company or a co-operative bank.
• Savings Account Deposits: If the aggregate deposit in one or more savings bank accounts is Rs. 50 lakh or more during the previous year.
• Foreign Travel Expenditure: Incurring expenditure exceeding Rs. 2 lakh for travel to a foreign country for yourself or any other person.
• Electricity Consumption: Incurring expenditure exceeding Rs. 1 lakh towards electricity consumption.

3. Significant Business or Professional Income

Individuals engaged in business or professional activities with significant turnover or receipts must file an ITR, even if their taxable income is zero:

• Business Turnover: If your total sales, turnover, or gross receipts in business exceeds Rs. 60 lakh during the previous year.
• Professional Receipts: If your total gross receipts in profession exceeds Rs. 10 lakh during the previous year.

4. Tax Deducted at Source (TDS) and Tax Collected at Source (TCS)

The obligation to file an ITR also arises If the aggregate of TDS and TCS during the previous year is Rs. 25,000 or more. For individuals aged 60 years or more, this threshold is Rs. 50,000 or more.

5. Income Exemptions and Deductions

Lastly, if an individual's total income before claiming exemptions under sections such as 10(38), 10A, 10B, 10BA, 54, 54B, 54D, 54EC, 54F, 54G, 54GA, and 54GB, as well as deductions under Chapter VI-A exceeds the maximum amount not chargeable to tax, they must file an ITR.

Conclusion:

The requirement to file an ITR extends beyond the presence of taxable income. Individuals meeting any of the above conditions must comply with the filing requirements to avoid penalties and ensure adherence to tax regulations. Filing an ITR, even in the absence of taxable income, helps maintain transparency and supports the nation's tax administration efforts.

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Disclaimer:

The information provided in this article is for general informational purposes only and does not constitute professional advice. The Author recommends consulting with a qualified tax advisor or legal professional to obtain specific advice related to your individual circumstances. Tax laws and regulations are subject to change, and the application of these laws can vary based on individual situations.

The author is not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this article.