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 have to claim a refund
- Your taxable income is more than Rs 5,00,000
- You want to claim an income tax refund. Those who are over 80 years old and are filing ITR-1 or ITR-2 can still file a paper return to claim a refund.
- ITR-3, 4,4S, 5, 6, 7 have to be mandatorily e-filed.
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 5lakhs.