Every person whose taxable income is more than the exempted threshold limit prescribed under the Income Tax (I-T) law is required to file income tax return (ITR).

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However, there are cases where the person is required filing return of income even if the total income is below the exempted threshold limit.

Here are some of those situations, according to Naveen Wadhwa, chief executive officer, Taxmann:

When the income before capital gain exemption (Section 54 to 54GB) or deductions (Section 80C to 80U) exceeds the maximum amount not chargeable to tax;

An individual (an ordinary resident in India) who owns overseas assets or has signing authority in any account outside India.

Besides above, an assessee is required to file the return of income to:

Claim deduction under the heading "C.—Deductions in respect of certain income” of Chapter VI-A (i.e., Section 80QQB, 80RRB, etc.);

Carry forward certain losses;

Claim a refund of TDS/TCS;

Claim exemption under section 13A available to a political party; and

Claim exemption under section 11 and 12 available to a charitable or religious trust.

According to Kapil Rana, founder and chairman, HostBook Ltd, every person who falls under any one scenario of seventh proviso to section 139(1) even if his/her taxable income is less than the exempted threshold limit prescribed under the law is also required to file income tax return.

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Here are the scenarios, as suggested by Rana:

Filling of return become necessary if, an individual who deposited an amount or aggregate amount of Rs 1 crore of more in one or more current accounts during the financial year.

Filling of return is also necessary if an individual spent an amount or aggregate amount more than Rs 2 lakh on foreign travel for self or any other person during the financial year.

Filling of return is also necessary if, an individual spent an amount or aggregate amount more than Rs 1 lakh on consumption of electricity during the financial year.

Those having non-taxable income can also file ITR for various other purposes like visa, bank loan, credit card application, suggests Lionel Charles, chief executive officer, IndiaFilings.

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"Once income tax filing has started, it is always advisable to continue the same even when taxable income is below the threshold," he adds.

In words of Rajesh Gupta, Co-Founder and Director, BUSY Accounting Software, " Filing ITR also helps an individual if he/she is planning to immigrate to another country or seeking a job opportunity abroad. They should have their ITRs ready for the past 2-3 years because most of the embassies ask for these copies to process their visa application".

"Updated ITR files will also make the process of loan easy for the individuals by serving as the statement of income. It's easier for lenders to judge the repayment capacity," he opines.

First Published:Sept 17, 2020 7:12 PM IST