The season for filing income tax returns has started. So far, more than 1.23 crore people have filed their returns. This year, the last date to file returns is 15 September. However, there are benefits to filing early. Experts say that people should not wait until the last date to file their return. One important thing to know is that even if a person’s income is below the tax exemption limit, they may still have to pay tax in some cases.

What Do the Income Tax Rules Say?

According to Income Tax rules, if a person’s income is less than the exemption limit, they do not need to pay tax. In the new tax regime, the exemption limit is ₹3 lakh per year. In the old tax regime, the exemption limit is ₹2.5 lakh per year.

However, in some cases, even if the income is low, it is still necessary to file a return. If the return is not filed, the Income Tax Department may send a notice asking for the reason.

Who Must File a Return Even with Low Income?

As per the Income Tax Act, 1961, people must file returns even if their income is below the exemption limit in the following cases:

  1. If total deposit in savings bank account is more than ₹50 lakh
  2. If deposit in a current account is more than ₹1 crore
  3. If business turnover is more than ₹60 lakh in a year
  4. If professional income is more than ₹10 lakh
  5. If electricity bill payment is more than ₹1 lakh in a year
  6. If TDS or TCS is more than ₹25,000 in a year
  7. If the person earns income from any foreign asset
  8. If the person spends more than ₹2 lakh on foreign travel in a year

Return Can Be Filed Even with Low Income

Experts say that people can still file their income tax return even if their income is below the tax limit. But it is important to have a PAN card. Filing a return helps in getting loans. For example, if someone applies for a home loan or car loan, the bank asks for income tax returns. It is one of the best proofs of a person’s income.

Filing Income Tax Returns is Now Easier

The Income Tax Department has made the return filing process simple and online. People with only one income source can use the ITR-1 form. This can be done easily from home through the internet.

For salaried employees, Form 16 is important. Employers give this form to employees, and it helps in filing the return correctly.