The Union government recently changed the rules for filing income tax returns. Here’s everything you need to know.
“Before the changes, the usual requirement to file returns was based on income criteria. For individuals, the criterion was that they had to file the IT declarations if their combined gross income was over 2.5 lakh. Similarly, a senior (aged 60–80) was required to file a tax return if total gross income was more than ₹3 lakh. The criterion for a very old citizen (80+) was an income of more than £5,000,” said Abhishek Murali, President of the All India Tax Payers’ Association (AITPA).
Now new additional rules have been introduced that are not limited to just income.” Even if you have absolutely no income during the year, it is mandatory to file IT declarations if any of the following criteria are met. Otherwise, penalties and fines will be imposed on the defaulter,” he stressed.
i) When the tax deducted/charged at source is ₹25,000 or more
ii) When the total deposits into savings bank accounts during the year is ₹50 lakh or more
iii) For a company: if gross earnings/sales are ₹60 lakh or more (even if losses are made)
iv) For a professional: if gross earnings are ₹10 lakh or more (even if losses are made)
These apply in addition to the existing non-income-related rules introduced in April 2020:
v) Utility Bills Paid – ₹1 lakh or more in a year (for all owned or rented properties combined)
vi) If foreign travel expenses are incurred either for self or for others – ₹2 lakh or more in one year
vii) Current account deposits of ₹1 crore or more during the year.
Therefore, an income statement must be filed in all of the above cases, regardless of what income/losses/reimbursements the beneficiary is entitled to.
In order to comply with the letter and the spirit of the law, it would be advisable to file an income declaration for taxpayers, even in case of doubt, in order to avoid penalties and measures from the income tax authority, Mr. Murali pointed out.