Should You File ITR Even If Your Annual Income Is Within Exemption Limit? Know Income Tax Rules | Tax News

Last Updated:July 14, 2025, 13:34 IST

Though there is no need to file ITR generally if your annual income falls under the exemption limit, there are certain conditions in which you might be required to file tax return.

Know who needs to file income tax return even if the annual income is under the exemption limit.

Income Tax Return Filing 2025: The ITR filing season 2025 is going on, with more than 1.23 crore income tax returns have already been filed so far. The deadline to file non-audit tax returns is September 15, 2025. According to income tax rules, those earning above Rs 2.5 lakh annually under old tax regime or more than Rs 3 lakh under new tax regime are required to file ITR. However, is it necessary under any circumstance to file ITR for those earning below these thresholds?

Rajarshi Dasgupta, executive director (tax) of AQUILAW, said the minimum income needed to file an income tax return will depend upon the individual’s age and opted tax regime. In the case of the old regime, individuals below 60 years of age with a gross income of more than Rs 2.5 lakh within a financial year need to file an ITR. For senior citizens (people aged between 60 to 80 years), the minimum gross income limit is Rs 3 lakh. While for super senior citizens(individuals aged above 80 years), the limit rises to Rs 5 lakh.

“However, the new regime requires all individuals to file returns only if their gross income exceeds Rs 3 lakh during the FY 2024-25,” he added.

As per the Income Tax Act, 1961, individuals are required to file an ITR only if their annual income exceeds the basic exemption limit mentioned herein above. However, there are certain conditions in which you might be required to file an ITR even if your income falls within the basic exemption limit, he said.

According to Dasgupta, here’s the list of conditions that specify who should file ITR even if annual income is under the exemption limit:

1. Bank deposits of more than 50 lakh

2. Current account deposits of more than Rs 1 crore

3. Annual sales turnover above Rs 60 lakh

4. Professional income above Rs 10 lakh

5. Electricity bill exceeding Rs 1 lakh

6. TDS/TCS exceeding Rs 25,000

7. Income from foreign assets

8. Expenses on foreign travel, in case an individual spends Rs 2 lakh or more for himself or any other person during a financial year.

8. Resident taxpayers with overseas assets or signing authority.

“In addition to these, if an individual has income below taxable limit but has been subject to TDS / TCS, it will have to file its return of income to claim refund of the taxes. Also, if while arriving at its total income, it is claiming the losses of earlier years brought forward or wishes to carry forward its losses, it will have to file its return of income. Last and also very important is that a return needs to be filed in case someone needs to apply for a loan or visa or such other important matters,” said Anita Basrur, partner at Sudit K Parekh & Co LLP.

As per the Indian Tax Laws, every individual is required to file its return of income if its total income for the year exceeds the maximum amount not chargeable to tax. The total income is to be considered without giving effect to the exemption of long term capital gains (LTCG) or investments made to claim exemptions for LTCG or other Chapter VI-A deductions, he added.

What Is the Old Tax Regime?

The old tax regime is the income tax system that offers a wide range of exemptions and deductions, allowing taxpayers to reduce their taxable income by claiming benefits such as Section 80C (up to ₹1.5 lakh) for investments in PPF, ELSS, LIC, etc; house rent allowance (HRA); leave travel allowance (LTA); interest on home loan (Section 24); health insurance premium (Section 80D); education loan interest (Section 80E); and standard deduction (Rs 50,000 for salaried individuals).

Old Regime Tax Slabs (FY 2024-25):

Note: Rebate under Section 87A is available for taxable income up to Rs 5 lakh (i.e., no tax liability if total income is within Rs 5 lakh).

What Is the New Tax Regime?

Introduced in Budget 2020 and revamped in Union Budget 2023, the new tax regime offers lower tax rates but no major exemptions or deductions (except a few like NPS employer contribution and standard deduction from FY 2023-24).

New Regime Tax Slabs (FY 2024-25)

Note: Standard deduction of Rs 50,000 is allowed for salaried/pensioners from FY 2023-24 onwards, even under the new regime.

Mohammad Haris

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More

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