10 Situations When You Must File ITR Even If Your Income Is Below the Exemption Limit (AY 2025-26)

Are you skipping your ITR filing just because your income is below the basic exemption limit? Filing an Income Tax Return (ITR) is generally mandatory only if your taxable income exceeds the exemption limit (₹2.5 lakh under the old regime, ₹3 lakh under the new regime for FY 2024-25). However, Indian tax laws outline several exceptions where ITR filing is compulsory—even if your income is not taxable.

Below are 10 situations where you must file an ITR, regardless of your income level:

1. High-Value Bank Deposits

• ₹1 crore or more deposited in current account(s) in a single financial year.

• ₹50 lakh or more in one or more savings account(s) in a financial year.

2. Major Foreign Travel Expenses

• If you (or on behalf of anyone else) spend ₹2 lakh or more on foreign travel in a financial year, you must file ITR—even if your income is below the tax-free limit.

3. High Power Bills

• Paid electricity bills of ₹1 lakh or more in aggregate in a year? ITR filing is mandatory.

4. Large Business or Professional Receipts

• If your business turnover exceeds ₹60 lakh.

• If your professional gross receipts exceed ₹10 lakh (applicable to doctors, consultants, freelancers, etc.).

5. High TDS/TCS Deduction

• If TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) is ₹25,000 or more during the year (₹50,000 for senior citizens), you must file an ITR to claim a refund or show compliance.

6. Foreign Assets or Income

• If you own any foreign assets (shares, house property, or accounts), have income (dividends, rent) from outside India, or are a signatory/beneficiary of a foreign account, ITR filing is mandatory regardless of income.

7. Refund Claims

• Want to claim a refund of excess TDS deducted? You must file an ITR even if below exemption.

8. Director or LLP Partner

• If you are a director in a company or a partner in an LLP, you are required to file ITR.

9. Carry Forward Losses

• If you want to carry forward a loss from one financial year to the next, you must file your return—even if your income is below the basic limit.

10. Meeting Other Specified Criteria

• If you meet any specific government notification or reportable financial transaction threshold (e.g. investments or spending flagged by the income tax department), ITR filing can be mandated.

What’s the Takeaway?

Skipping ITR because your income is below the exemption limit could expose you to penalties, missed refunds, or trouble with financial proof. The situations above are especially relevant if you run a business, have large bank transactions, travel abroad, or expect a refund. Filing your ITR ensures you remain compliant, can claim refunds and carry forward losses, and keep your financial records in good standing.

Stay updated, avoid penalties, and use your ITR as income proof for loans, visas, and more. When in doubt—file your return!

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