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The ITR filing process is mandatory for all categories of taxpayers, including individuals, Hindu Undivided Families(HUFs), companies and partnership firms.
Individual taxpayers earning an income above the basic exemption limit must file their returns. In addition, those with income below the exemption limit may also need to file ITR under specific conditions.
Understanding these provisions and knowing when to file ITR is crucial for ensuring compliance with income tax regulations.
Here is a simple guide to help you determine who would submit income tax returns and the specific conditions that apply to them.
Before we see who is eligible for ITR, let us understand the ITR in full form.
ITR stands for Income Tax Return. It is a form that individuals or entities with taxable income must file and submit to the income tax authorities. It is used to report your earnings, expenses and income tax liability for a financial year. By filing the ITR, you can determine the exact amount of income tax payable after the allowable exemptions and deductions.
If there is a pending tax liability, you can pay it. If you have paid income tax beyond your actual income tax liability, you will get a tax refund after filing your income tax returns.
There are different types of income tax return forms specific to the category of taxpayers – individuals or entities. You can file your ITR online or offline.
Individuals and entities with taxable income in India are eligible to file income tax returns. Even if your income lies within the basic exemption limit and you are exempt from paying income taxes, it is advisable to file your ITR.
It serves as proof of your income and is submitted to the IT (Income Tax) Department. Now, let us explore the different categories of taxpayers and understand who should file the IT return.
If you are generating a taxable income in India, you are eligible to file an ITR.
The exemption limit is different for the old and the new tax regime.
Age
For individual taxpayers below 60 years of age
2.5 lakhs
For individual taxpayers above 60 years but below 80 years of age
3 lakhs
For individual taxpayers above 80 years of age
5 lakhs
If you are a salaried employee, filing an ITR is mandatory, irrespective of your income for the financial year.
All companies, including private limited companies and limited liability partnerships, must file an ITR to declare their profit or loss for the financial year.
If you are a Non-Resident Indian generating any source of income in India, you must file the ITR.
If you belong to Hindu Undivided Families and generate taxable income in India, you are required to file an ITR.
If you run a Trust or Charitable Organisation and earn a taxable income, you are liable to file the ITR.
There are a few other taxpayers who should pay ITR even if their total income is less than the tax exemption limit. We will discuss them in the next section.
If you are a resident individual earning income by owning assets or investing in shares or bonds of foreign companies, you must file income tax in India.
It is also applicable to individuals who receive rental income from foreign countries.
In addition, individuals who invest in foreign assets in the name of their parents should also file an ITR.
If you are a resident Indian who has spent over ₹2 lakhs on a foreign trip for yourself or any other person, you are required to file an ITR. It is applicable to money spent at once or in aggregate.
For instance, if you have spent ₹1.5 lakhs on your travel and another ₹1 lakh on your spouse’s travel to a foreign country, you are mandated to file an ITR.
The ITR filing process is mandatory for all categories of taxpayers who have paid an electricity bill of ₹1 lakh or more. It is applicable to a single payment or an aggregate amount paid for the entire financial year.
If the TDS or the tax paid is more than your actual income tax liability, you should file an ITR to claim the tax refund.
IT exemptions are applicable to income from capital gains. However, you will need to file an ITR on capital gains if your total income – before applying for these exemptions – exceeds the tax exemption limit.
The ITR filing process is mandatory if the TDS or TCS applicable to your income is ₹25,000 or above.
If the gross total receipts that you have received from your profession exceeds ₹10 lakhs, filing ITR is mandatory.
If the gross turnover applicable to your business exceeds ₹60 lakhs, you are required to file an ITR.
If your deposit or aggregate deposit to multiple savings bank accounts exceeds ₹50 lakhs for a financial year, the ITR filing process is necessary.
If you have deposited an amount equal to or amounts that sum up to ₹1 crore or more in a current account with a bank, then you have to file your ITR.
According to Section 194P of the IT Act, taxpayers 75 years or above are exempt from filing IT returns. However, this provision is subject to the following conditions:
The senior citizen:
Note: The senior citizen should submit a declaration to the bank. If it is a specified bank, the bank is responsible for the TDS and applying the deductions under Chapter VI-A and the rebate under 87-A.
Category of Taxpayer
Individuals/HUFs/AOP/BOI/ (Book of Accounts that does not require auditing)
31st July
Businesses or Organisations that require an audit
15th November
Businesses or Organisations that require transfer pricing reports (applicable to international or specified domestic transactions)
30th November
Revised Return
31st December
Belated Return
Updated Return
31st March (within 2 years from the relevant assessment year)
According to Section 234A, if you file your ITR after the deadline of 31st July, you will be liable for an interest payment.
It is at the rate of 1% per month or part of the month on the unpaid tax amount. It will be determined and calculated from the due date of the relevant financial year till the date you file the ITR.
You will also be liable to pay a late fee of ₹5000 under Section 234F for the delay in filing the ITR. The amount is reduced to ₹1000 if your total income is less than 5 lakhs.
In case you have incurred losses on your business, mutual funds or stock market investment, you can carry forward the losses and offset them in the following year.
However, you will not be allowed to use this option if you miss the ITR filing process before the due date.
Types of Income Tax Return Forms
Who is Eligible for the ITR Form?
ITR - 1
It is applicable to you if you
Are a resident individual with an income less than ₹50 lakhs,
Are a salaried individual,
Own one house property,
Earn income from other sources, such as interest income, pension, etc., and
Earn an agricultural income of up to ₹5,000
ITR - 2
It is applicable to you if you are an individual taxpayer or belong to Hindu Undivided Families (HUFs) and are not generating an income from a business or profession.
ITR - 3
It is applicable to you if you are an individual taxpayer or belong to Hindu Undivided Families (HUFs) and are generating an income from a business or profession.
ITR - 4
It is applicable to resident individuals, HUFs and firms,
With income less than ₹50 lakhs,
With an agricultural income of up to ₹5,000
With income from business and profession that is applicable under Section 44AD, 44ADA or 44AE
ITR - 5
It is applicable to eligible taxpayers other than individuals, HUFs, and companies and others who file ITR-7.
ITR - 6
It is applicable to companies that do not qualify for exemptions applicable under Section 11.
ITR - 7
It is applicable to individuals and companies who need to report their financial information under Section 139 (4A), Section 139 (4B), Section 139 (4C) or Section 139 (4D) only.
The ITR filing process is available online and offline. You can visit the IT Department’s official website for e-filing. Explore our quick and easy guide to the steps for filing your ITR and documents required.
By filing the ITR, you can ensure compliance with income tax laws and adherence to all applicable regulations.
If you file your ITR within the stipulated time, you can avoid hefty penalties and legal consequences.
If your TDS or the income tax amount you have paid exceeds your actual income tax liability, you can claim a tax refund by filing the ITR. You will receive the excess amount paid to your bank account.
By filing the ITR, you can also carry forward your losses and offset them in the following year. The loss is applicable to your business or investment.
Banks and other financial institutions need your ITR to approve your loan applications. It is applicable to both business and personal loans.
Prompt ITR filing process ensures smoother visa processing and quick approvals. ITRs serve as proof of your income and financial condition, which is most required while visiting foreign countries.
You can reduce your taxable income and income tax liability by opting for savings and investment plans that offer tax deductions and exemption benefits.
For instance, Section 80C offers a tax deduction benefit for the payments made towards certain expenses, savings and investment plans. The maximum deduction limit is ₹1.5 lakhs.
Section 80D offers a tax deduction benefit* of ₹1 lakh for health premiums paid annually. You can claim this deduction for health insurance plans purchased for yourself, your family and your parents.
At Reliance General Insurance, we provide various health insurance policies online starting at ₹243 per month* to cover a wide range of medical costs. You can also customise your plan with our add-on to extend the coverage for specific illnesses, including critical illnesses like cancer.
Also Read: Section 80D - Health Insurance Tax Deductions.
The basic exemption limit refers to the minimum amount of your income; it is the threshold limit up to which you are not required to pay income tax.
The income tax is calculated on your income exceeding this basic exemption limit. So, if your yearly income is below the basic exemption limit, you are not required to pay income tax.
All individuals and entities with a taxable income are required to file ITR. It is mandatory for all taxpayers whose income exceeds the exemption limit – ₹2.5 lakhs (under 60 years) for the old regime and ₹7 lakhs for the new regime.
Yes, you can file the ITR after the due date but before 31st December. However, you will become liable for penalties and interest payments if you miss the deadline.
Yes, you can use other documents, such as Form 26AS, salary payslips and investment records to file your ITR.
The ITR filing process is important to report your earnings, expenses and income tax liability with the IT Department. It ensures you comply with the income tax laws.
Furthermore, it can help you avoid unnecessary penalties, carry forward your losses (if applicable) and claim a refund if the tax paid exceeds your actual tax liability.
Individuals and entities with a taxable income should file ITR. If your gross total income is greater than the basic exemption limit, you are mandated to file an ITR. It is also mandatory in certain cases when the income is less than the basic exemption limit (cases mentioned above).
The basic exemption limit differs based on your age and the tax regimes that you opt for the financial year.
Disclaimers:
*T&C Apply. For more details on risk factors, terms conditions, brochure, and exclusions, please read the policy wording and CIS carefully before concluding a sale.
Tax benefits: Tax benefits are subject to conditions under the Income Tax Act and amendments thereof. The tax laws are subject to amendments/changes from time to time. Please consult your tax advisor for details.
Premium: The premium mentioned is excluding taxes for single person aged between 5 years to 20 years with individual health policy for Sum Insured of ₹3 lakhs considering no adverse health conditions/pre-existing disease/medical conditions with waiting period of 3 years. For more details, please refer to the policy wordings. Premium used is 2,919/year converted into a month which gives us Rs.243/month (2,919/12).
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