Filing an Income Tax Return (ITR) is mandatory for individuals whose income exceeds the maximum exemption limit. For those under 60 years of age, an ITR must be filed if their gross total income exceeds Rs 2.5 lakh in a fiscal year. This basic exemption limit is consistent for these individuals under both the old and new tax regimes.
For income tax purposes, an individual resident aged 60 years or above but less than 80 years at any time during the previous year is classified as a senior citizen. A super senior citizen is defined as an individual resident who is 80 years or older at any time during the previous year.
However, Section 194P of the Income Tax Act, 1961, effective from April 1, 2021, outlines conditions under which senior citizens aged 75 years and above are exempt from filing income tax returns.
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Conditions for exemption are:
- A senior citizen must be 75 years of age or older.
- A senior citizen must be a ‘Resident’ in the previous year.
- A senior citizen should have pension and interest income only, with the interest income accrued/earned from the same specified bank where they receive their pension.
- The senior citizen will provide a declaration to the specified bank.
- The bank, specified by the Central Government, will be responsible for deducting TDS for senior citizens after considering deductions under Chapter VI-A and rebate under 87A.
- Once the specified bank deducts tax for senior citizens above 75 years of age, there will be no requirement for them to furnish income tax returns.
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ITR For Below Threshold Income
There are specific conditions that require individuals to file an ITR even if their income is below the threshold. These conditions include:
When individuals have assets outside of India
An individual (resident and ordinary resident in India) is required to file an income tax return, regardless of income not exceeding the maximum exemption limit if he/she:
1. Holds any asset (including any financial interest in any entity) located outside India, whether as a beneficial owner or otherwise;
2. Holds signing authority in any account located outside India; and
3. Is a beneficiary of any asset (including any financial interest in any entity) located outside India.
Under the seventh proviso to section 139 (1)
Filing an income tax return is mandatory, irrespective of gross total income if the assessee falls under the seventh proviso to Section 139(1). This provision requires individuals, who would otherwise be exempt from filing due to their income not exceeding the maximum exemption limit, to file a return if, during the previous year, they have:
1. Deposited more than Rs 1 crore in one or more current accounts maintained with a bank or a cooperative bank;
2. Incurred more than Rs 2 lakh for oneself or any other person for travel to a foreign country; or
3. Incurred more than Rs 1 lakh towards payment of an electricity bill;
4. Total sales, turnover, or gross receipts of business exceed Rs 60 lakh during the previous year;
5. Total gross receipts in a profession exceed Rs 10 lakh during the previous year;
6. The total tax deducted and collected during the previous year is Rs 25,000 or more. The threshold limit shall be Rs 50,000 in the case of a resident individual of the age of 60 years or more; or
7. The aggregate deposit in one or more savings bank accounts of the person is Rs 50 lakh or more during the previous year.
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