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Who needs to file an ITR?

In India, the Income Tax Act, 1961, mandates individuals and entities to file an Income Tax Return (ITR) with the Income Tax Department, if their income exceeds a certain threshold limit. The threshold limit and other criteria for filing an ITR depend on the type of taxpayer and their source of income. Here are the details:


Individuals: For individuals, the threshold limit for filing an ITR is based on their age and income level. For the financial year 2021-22 (assessment year 2022-23), the following are the thresholds:

Individuals below the age of 60 years: If the total income is above Rs. 2.5 lakhs, they must file an ITR.

Senior citizens (between 60 and 80 years of age): If the total income is above Rs. 3 lakhs, they must file an ITR.

Super senior citizens (above 80 years of age): If the total income is above Rs. 5 lakhs, they must file an ITR.


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In addition, certain other individuals must file an ITR irrespective of their income level. For example, if an individual has held any foreign assets or income during the financial year, they must file an ITR. Similarly, if they are a director of a company, have invested in unlisted equity shares or have incurred losses that they want to carry forward to the next year, they must file an ITR.


Businesses: For businesses, the threshold limit for filing an ITR depends on the type of business entity. The following entities must file an ITR irrespective of their income level:

Company: Every company registered in India, including a foreign company with operations in India, must file an ITR.


Partnership firm: All registered partnership firms must file an ITR.


LLP (Limited Liability Partnership): All LLPs must file an ITR, irrespective of their income level.

In addition, other entities such as trusts, associations, and HUFs (Hindu Undivided Families) must file an ITR if their income exceeds the threshold limit.

Taxable income sources: Apart from the above-mentioned criteria, if an individual or a business has taxable income from sources other than their primary income, they must file an ITR. For instance, if an individual has capital gains from selling a property, they must file an ITR, even if their total income is below the threshold limit. Similarly, if a business has income from rent, interest on savings, or any other taxable sources, they must file an ITR.


In conclusion, filing an ITR is mandatory for individuals and entities in India if their income exceeds the threshold limit or if they have taxable income from other sources. The income tax department imposes penalties for non-filing or delayed filing of ITRs, making it crucial for taxpayers to comply with the ITR filing deadlines.

 

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