Who Should File Income Tax Return in India?

1. Basic Exemption Limits - The Mandatory Trigger

The primary factor determining your filing requirement is whether your Gross Total Income exceeds the basic exemption limit. Since FY 2025-26, the New Tax Regime (Section 115BAC) has been significantly optimized. The mandatory triggers are:

A. New Tax Regime (Default)

Under the New Tax Regime, the basic exemption limit has been increased to ₹4,00,000. Regardless of age, if your gross total income (before any deductions or exemptions) exceeds ₹4 Lakh, you are legally required to file an ITR.

B. Old Tax Regime (If Opted For)

If you specifically choose to opt for the Old Tax Regime, the limits remain traditional:

• Below 60 years: ₹2,50,0,00
• 60 to 79 years (Senior Citizen): ₹3,00,000
• 80 years and above (Super Senior): ₹5,00,000

2. Mandatory Filing Triggers (7th Proviso to Sec 139(1))

Even if your income is below the thresholds above, you must file ITR if you meet any of these statutory conditions (Rule 12AB):

• High-Value Deposits: Aggregate deposits > ₹1 Crore in current accounts or > ₹50 Lakh in savings accounts.
• Foreign Travel: Total expenditure > ₹2 Lakh for yourself or any other person.
• Electricity Bills: Cumulative payment > ₹1 Lakh during the financial year.
• Business/Profession: Sales > ₹60 Lakh or professional gross receipts > ₹10 Lakh.
• TDS/TCS: Tax deducted/collected is ₹25,000 or more (₹50,000 for Seniors).

3. The Benefits of Voluntary Filing

Even if not mandatory, filing is highly recommended for:

• Carry Forward of Losses: Business or Capital losses can only be carried forward if the return is filed within the due date (Sec 139(3)).
• Global Mobility: ITRs of the last 3 years are a standard requirement for Visa applications (USA, UK, Schengen).
• Financial Credibility: Banks require ITRs for processing Home Loans and high-limit Credit Cards.