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In India, ITR Filing is compulsory for an individual (other than company or firm) only in case of his/her yearly earned income surpasses the minimum amount on which the tax is levied. However, one can get rid of charged tax by following the certain exemptions available in the taxation system. But these exceptions do not include many persons belonging to high-value transactions.
That's why, the Finance Minister vide Finance Act (No 2) 2019 following a newly introduced amendment in Section 139, made the filing of ITR compulsory for the persons entering into high-value transactions within the financial year. It will confirm that ITR filing has been done via such category persons or not. They are categorized as given below:
1. If an amount of accumulated amount exceeds INR 1 Crore in a single or more current accounts maintained in a banking company or a co-operative bank, such personals can file their Income Tax Return by Gen IT Software.
2. If an amount or collective amount exceeds INR 2 lakhs for incurred expenditure on travel to a foreign country via himself or any other person, such persons are mandatory to file ITR.
3. People their expenditure towards consumption of electricity exceeds INR 1 lakh, are required to file ITR.
4. if a person getting benefited with rollover investment in a house or bonds or other assets u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB, is compulsory to file ITR, in case his total income before claiming such rollover benefits exceeds the exemption limit for levy of tax.
Some Other Cases which mandate ITR Filing
Other than the cases mentioned in introduced amendments in Finance Act (No.2) 2019 for mandatory filing of ITR. There were a number of other cases where ITR filing was compulsory before the introduction of Finance Act (No. 2) 2019 and continued to be mandatory in future.
They Are:-
1. If there is a Company or Firm, doesnt matter gets a Profit or a Loss
2. If the applicant is willing to claim Income Tax Refund
3. If losses are being carried forward
4. If Resident persons possess assets or financial interest in an entity outside India. (This is not the case with NRI's or RNOR's)
5. If Resident persons have signing authority in any account outside India (This is not the case with NRI's and RNOR's)
6. If person is entitled in receipt of income received from a property falls under a trust for charitable or religious purposes or a political or research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
7. If a foreign company is getting benefits from any treaty in India
In all the above-mentioned cases, the filing of Income Tax Return is compulsory for a person. However, in other cases, the person can get the liberty of not filing ITR but if the person is applying for a Credit Card or a Loan then the proof of Income Tax Return submission is mandatory to process your application further.
Levied Penalty for Late ITR Filing:
In case, the person makes late payment of Income-tax, he/she would not only be liable to pay interest for late payment of income tax but has to pay penalty for late ITR filing.
Before filing for the Income Tax Return, the person has to pay penalty as per the above-mentioned particulars. In case, the person does not pay a penalty before filing for the Income Tax Return, his ITR would not be accepted. In extreme cases, where the assesses wilfully not file the ITR in due time, required to pay penalty under Section 276cc i.e.
1. If the amount to be paid as income tax is less than INR 25 lakhs-the taxpayer can be penalized via income tax officer with a penalty of imprisonment for a term of 3 months to 2 years.
2. If the amount to be paid as income tax exceeds INR 25 Lakhs the suggested penalty from income tax officer may vary from imprisonment a term of 6 months to 7 years.
Well, the penalty of INR 5,000/INR 10,000 is levied mostly, the mentioned penalties are for the extreme cases and levied rarely.
