What is ITR?

The Income Tax Return (ITR) is a formal statement filed by a taxpayer in which they share their financial details, such as income, tax deductions, expenses, and the taxes paid or taxes payable during a financial year. This information goes to the Income Tax Department, which keeps an eye on the taxpayers’ transactions.

Who is Required to File ITR?

Income Tax Return filing becomes mandatory for the following situations:

• Your income is more than the basic exemption limit before deductions.
• If you are a company or firm, you must file ITR, no matter if you made a profit or incurred a loss.
• If you own any foreign assets or income, or if you have signing authority in a foreign account.
• If you have deposited more than Rs. 1 crore in a current account or if you have deposited more than Rs. 50 lakh in savings accounts during a financial year.
• If you have spent more than Rs. 2 lakh on foreign travel.
• If your electricity bill has crossed Rs. 1 lakh in a financial year.
• If TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) is Rs. 25,000 or above, or Rs. 50,000 or more (for senior citizens).
• Your Business turnover is more than Rs. 60 lakh, or Professional receipts exceed Rs. 10 lakh.
• If you are required to file an ITR under the law.

Due Dates to File ITR for AY 2025-26

Why is it Necessary to File ITR?

• Disclose Income: Filing ITR is important as it reports income from all sources, including salary, business, property, capital gains, etc.
• Claim Deduction: You can claim deductions and exemptions under sections like 80D, 80C, etc.
• Claim Refund: You can pay the additional tax that is pending or claim refunds in case you paid excess tax.
• Legal Compliance: It is necessary to file your ITR to make sure you comply with the law to avoid any legal penalties.