Understanding Income Tax Filing Requirements: Do You Need to File ITR if Your Income is Less Than 5 Lakhs?
In India, individuals whose total income is below the taxable limit are not required to file an income tax return (ITR). As of last update, the taxable limit was ₹2.5 lakhs for individuals below 60 years of age, ₹3 lakhs for individuals between 60 to 80 years, and ₹5 lakhs for individuals above 80 years. However, it’s advisable to file a return even if your income is below the taxable limit if you want to claim a refund of taxes deducted at source (TDS) or to carry forward losses.
Benefits of Filing ITR:
- Ensures adherence to the legal requirements of the Income Tax Act, avoiding penalties and legal repercussions.
- Demonstrates responsible citizenship and contributes to the nation’s development through tax revenue.
- Allows taxpayers to claim deductions under various sections of the Income Tax Act, such as Section 80C (for investments), Section 80D (for health insurance premiums), and more.
- Eligible taxpayers can avail of tax rebates, reducing their overall tax liability.
- Facilitates the processing of tax refunds for taxpayers who have paid excess taxes through TDS (Tax Deducted at Source) or advance tax payments.
- Ensures timely refunds, improving cash flow for taxpayers.