Book a free consultation
Are Cryptocurrencies Taxed in India? Understand the Rates, TDS and How...
Cryptocurrencies have gained popularity as a new form of digital asset due to their d...
Not everyone is required to file an income tax return, but more people must file than they realise. You may need to file even if you owe no tax, even if your income is below the taxable limit, and even if tax was already deducted from your income. This guide explains exactly who has to file ITR for FY 2025-26 (AY 2026-27), the income limits that apply, and the special cases where filing is mandatory regardless of income.
For the full filing process, see our complete ITR filing guide for FY 2025-26.
Key takeaways
- You must file if your gross income (before deductions) crosses the basic exemption limit — ₹4 lakh under the new regime, ₹2.5 lakh under the old.
- “No tax” does not mean “no return.” The new regime makes income up to ₹12 lakh tax-free, but filing is still mandatory if your income crosses the exemption limit.
- Certain high-value transactions make filing mandatory even if your income is below the limit.
- You should also file to claim a refund or carry forward losses, even when it isn’t required.
The basic rule: Income above the exemption limit
The main test is simple. You must file an ITR if your gross total income for the year is more than the basic exemption limit. Gross total income is your income before claiming any deductions under Chapter VI-A, such as Section 80C or 80D.
The exemption limit depends on your regime and age:
| Category | New regime | Old regime |
| Individuals below 60 | ₹4,00,000 | ₹2,50,000 |
| Senior citizens (60–80) | ₹4,00,000 | ₹3,00,000 |
| Super senior citizens (80+) | ₹4,00,000 | ₹5,00,000 |
If your income before deductions crosses the limit that applies to you, filing is mandatory. This matters because a person who brings taxable income below the limit only after claiming 80C deductions must still file — the test is applied before those deductions.
Reduce overlap, minimise risk. Build your ideal portfolio
Let our Qualified Financial Advisors guide you
No tax does not mean no return
This is the most common mistake taxpayers make for AY 2026-27. Under the new regime, the enhanced Section 87A rebate makes income up to ₹12 lakh effectively tax-free. Many people assume that zero tax means no filing requirement. That is wrong.
Filing is still mandatory whenever your gross income crosses the basic exemption limit. Someone earning ₹10 lakh under the new regime pays no tax because of the rebate, but their income is well above the ₹4 lakh exemption limit, so they must file a return. Tax payable and the obligation to file are two separate things.
When filing is mandatory even below the exemption limit
Under the seventh provision to Section 139(1), certain high-value transactions make filing compulsory even if your total income is below the exemption limit. You must file if, during the year, you have:
- Deposited ₹1 crore or more in one or more current accounts with a bank or co-operative bank (savings accounts are not counted).
- Spent more than ₹2 lakh on foreign travel, for yourself or any other person. This is an aggregate across the year and includes funding someone else’s trip, such as a parent’s or child’s.
- Paid electricity bills exceeding ₹1 lakh during the year.
Further conditions prescribed under the rules also make filing mandatory if you have:
- Business turnover above ₹60 lakh, or professional gross receipts above ₹10 lakh.
- TDS or TCS of ₹25,000 or more in the year (₹50,000 or more for senior citizens).
- Deposits of ₹50 lakh or more in one or more savings bank accounts.
Meeting any one of these is enough to trigger the filing requirement. When you file for this reason, the ITR form has a specific field to indicate you are filing under the seventh proviso — select it correctly to avoid queries later.
Other cases where you must file
Filing is also mandatory, regardless of your income level, if you:
- Hold foreign assets, are a beneficiary of a foreign asset, or have signing authority in any account outside India.
- Have foreign income as a resident.
- Want to carry forward losses from business or capital gains to future years — this is only allowed if you file by the due date.
- Are a company or firm, which must file every year regardless of profit or loss.
Why file even when it isn’t mandatory
Even if you are not required to file, doing so often works in your favour:
- To claim a refund. If TDS or TCS was deducted and your tax liability is lower, filing is the only way to get the money back. This is common for low-income individuals who had TCS collected on luxury purchases, foreign travel, or remittances — the return is the route to a refund.
- To carry forward losses and set them off against future income.
- As income proof for loan and visa applications.
- To build a clean financial record with the tax department, which helps avoid scrutiny later.
Before deciding you don’t need to file, check your AIS and Form 26AS. High-value spending, TCS, and tax credits now appear there against your PAN, and they often reveal a filing requirement or a refund you would otherwise miss.
Frequently asked questions
Is it mandatory to file ITR?
Yes, if your gross total income before deductions exceeds the basic exemption limit — ₹4 lakh under the new regime or ₹2.5 lakh under the old (₹3 lakh for those aged 60–80 and ₹5 lakh for those above 80). It is also mandatory if you carry out certain high-value transactions or hold foreign assets, even when your income is below the limit.
Reduce overlap, minimise risk. Build your ideal portfolio
Let our Qualified Financial Advisors guide you
Who needs to file ITR in India?
Any individual whose income before deductions crosses the basic exemption limit, anyone with foreign assets or income, anyone wanting to carry forward losses, and all companies and firms. People who undertake specified high-value transactions must also file, regardless of income.
Do I need to file ITR if my income is below the taxable limit?
Sometimes yes. You must file if you made high-value transactions such as ₹1 crore in current account deposits, over ₹2 lakh on foreign travel, or over ₹1 lakh on electricity. You should also file to claim a refund of any TDS or TCS deducted.
Is filing mandatory if my tax is zero under the new regime?
Yes, if your income crosses the basic exemption limit. The rebate makes income up to ₹12 lakh tax-free, but zero tax does not remove the requirement to file. “No tax” and “no return” are not the same.
What happens if I don’t file when I am required to?
You face a late fee under Section 234F (₹1,000 if income is up to ₹5 lakh, ₹5,000 above that), 1% monthly interest under Section 234A on unpaid tax, loss of the right to carry forward losses, and possible notices for non-filing.
Do senior citizens have to file ITR?
Yes, if their income crosses the exemption limit that applies to them. One relief: resident individuals aged 75 or above with only pension and interest income from the same bank can submit a declaration to that bank instead of filing a separate return.
Sources and references
- Income Tax Department, e-filing portal — incometax.gov.in
- Income Tax Act, 1961 — Section 139(1) and its seventh proviso, Sections 234F and 234A
- Rule 12AB of the Income Tax Rules (additional conditions for mandatory filing)
- TCS provisions under Sections 206C(1F) and 206C(1G)
Disclaimer
This guide is for general informational purposes and is accurate to the best of our knowledge as of June 2026. It is not a substitute for personalised tax advice. Tax laws, rates, and deadlines can change, and individual circumstances vary. Please verify current details on incometax.gov.in and consult a qualified Chartered Accountant or tax advisor before acting on any information here.
