Let’s understand whether you are required to file an Income Tax Return in India for FY 2017-18
Mandatory Filing – In any of the following situations (as per the Income Tax Act) it is mandatory for you to file an Income Tax Return in India:
- Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs.2,50,000 in the FY 2016-17
This limit is Rs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) or Rs 5,00,000 for super senior citizens (who are more than 80 years old)
- You are a company or a firm irrespective of whether you have income or loss during the financial year.
- You want to claim an income tax refund.
- You want to carry forward a loss under a head of income.
- You have exempt long term capital gains from – sale of equity shares in a company OR sale of unit of equity oriented mutual funds, OR sale of unit of business trust, of more than Rs 2,50,000 in a financial year. Even though these gains are exempt from tax, such persons have to mandatorily file an income tax return. [effective FY 2016-17, AY 2017-18]
- Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs)
- Or if you are a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs)
- You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
- If you are a foreign company taking treaty benefit on a transaction in India
- A proof of return filing may also be required at the time of applying for a loan or a visa.
Q.I am an NRI. Am I required to file income tax return in India?
NRI or not, any individual whose income exceeds Rs.2,50,000 (for FY 2016-17) is required to file an income tax return in India. Please note that for an NRI, income earned or accrued in India is taxable in India.
Q.Is it mandatory to e-file income tax return?
A significantly large number of returns are e-filed and gradually the income tax department is hoping to bring all returns online. In any of the following cases the Income Tax Department has made it mandatory to e-file your Return.
- You want to claim an income tax refund
- Your taxable income is more than Rs 5,00,000
- ITR-3, 4, 4S, 5, 6, 7 have to be mandatorily e-filed.
Paper returns can only be filed by those who are above 80 years of age OR by an individual or HUF whose income does not exceed Rs 5,00,000 and who has not claimed any refund in the return of income.
Penalties for non-filing income tax return?
Under section 271F, the assessing officer may levy a penalty of Rs 5,000 when you have not filed your return. (applicable uptil FY 2016-17)
Penalties for non-filing an income tax return from FY 2017-18?
Penalty of Rs 5,000 is applicable if Return for FY 2017-18 is filed after due date (31st July 2018) but by 31st December 2018.
Penalty of Rs 10,000 is applicable if Return for FY 2017-18 is filed after 31st December 2018 but by 31st March 2019.
Note: Penalty is limited to Rs 1,000 for those with income up to Rs 5 lakhs.