Income Tax Filing: Is It Compulsory to All?

Income Tax Filing: Is It Compulsory to All?- A Detail Guide

Filing income tax return - facts you must know

Income tax filing is a declaration by the taxpayer in a specified form on details of his income, savings and tax paid, if any, during a financial year before the income tax department as per IT rules 139(1).

Filing Income Tax Return is mandatory for an individual having gross income more than the basic exemption limit. At present, the basic exemption limit is rupees 250000 for individual below 60 years. However, IT return filing can be made even your gross income is less than the basic exemption limit.

Income Tax filing is mandatory or not.

Your taxable income may be or may not be more than the basic exemption limit. But, if your gross income is more than the basic exemption limit, the filing of income tax return is mandatory for you.

For whom it may compulsory.

Suppose, your gross annual income is more than rupees 250000. After the deduction under section 80C to 80U for your savings or expenses your taxable income comes below the exemption limit i.e. rupees 250000. Thus, your tax liability becomes nil. But, Filing income tax, in this case also, is mandatory for you as per existing IT rules. If you ignore or even you fail to file it before the due date, IT department can levy a penalty on you.

For whom it may not compulsory.

On the other hand, if your gross annual income before any deductions does not cross the basic exemption limit, the filing tax return is not mandatory for you. In this case, you may file your return, only if you desire so. Though income tax filing in this context is not compulsory, you can file your income tax return for some other benefits. Because filing even a nil return has its own benefits too.
Income Tax Filing: Is It Compulsory to All?- A Detail Guide

Last date income tax filing

CBDT, the central board of direct tax, announces time to time the last date of submission for filing the income tax return. The last date of filing a return for the financial year 2018-19 is 31st July 2019. CBDT may extend the deadline for income tax filing for a further period.

Before going ahead, you should understand the difference between gross income and taxable income.

Gross income Vs Taxable income

Gross income is the total income from salary/ wages/ pension, from savings, from house property etc. before any deductions.

Taxable income is the income after the deductions for savings and some other expenses from gross income.

Penalties for not filing Income Tax return.

If you fail to file an income tax return before the last date declared by the CBDT, the Income Tax Department may impose a penalty of Rs. 5000 upon you. Even, the penalty may raise to Rs. 10000 unless you complete your filing your return within 31st December after the due date. But, if your taxable income is not more than rupees 500000, the maximum amount of penalty is rupees 1000 for late filing of income tax return.


Hence, it is clear that filing Income Tax Return is mandatory when your gross income before any deductions is above rupees 250000. And it must be done before the due date in a specified form. The form ranges from ITR-1 to ITR-7. Not filing of a tax return in such case attracts a penalty of rupees 5000 to rupees 10000. On the other hand, Income Tax Return filing is not compulsory only when your gross income is below rupees 250000 and also you have no claim of refund.

More about Tax filing

Filing income tax return on due time reveals that you are responsible for your financial duties. Even in case of nil income or income having zero tax liability, you should file your return. Filing even a nil return has its own benefits too.

Benefits of filing nil return as follows:

  • Speed up your visa or loan processing.
  • Claim a refund for the TDS deducted from your savings.
  • Produce your return as income certificate, when it requires.
  • Free from the anxiety of being penalized by the IT department.
  • Contribute towards nation building.

Last but not least: e filing income tax return

E filing of income tax return is the easiest and most convenient way to file a return from the comfort of your home. From your home or cafe or even from your smartphone you may e-file your return easily. You can also e-verify your return at ease. All the process will take your few minutes to complete.

ITR GUIDE is dedicated to self-educate those who intend to become self-dependent while filing their income tax return online. Here you will find step by step guide on how to file ITR online. If you find the article a helpful one, please consider to share it with others. Thanks for reading.
Income Tax Filing: Is It Compulsory to All?- A Detail Guide

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