ITR filing for the financial year 2024-25 (Assessment Year 2025-26) has officially begun, with the Income Tax Department permitting Excel Utility-based returns since May 30th. While online filing is still on the horizon, nearly 55,000 returns have already been filed as of June 2nd, 2025.
Who Needs to File an Income Tax Return (ITR)?
Whether you’re a salaried professional, a freelancer, or a business owner, there are several situations where filing an ITR is either mandatory or highly recommended.
Mandatory Filing Scenarios:
- Income Exceeds Basic Exemption Limit:
- If you’re under 60, and your total income is above Rs. 2.5 lakh.
- If you’re between 60 and 80, and your total income is above Rs. 3 lakh.
- If you’re over 80, and your total income is above Rs. 5 lakh.
- Under the New Tax Regime, the basic exemption limit is Rs. 3 lakh for all individuals, regardless of age.
- Businesses and Firms: Every company and firm in India must file an ITR, irrespective of profit or loss.
- Claiming a Tax Refund: If you’re due a refund from excess TDS/TCS, you’ll need to file an ITR to get it.
- Foreign Income or Assets: If you’re an Indian resident with any foreign assets or financial interests, filing an ITR is a must.
- Carrying Forward Losses: To offset future income with current losses (e.g., from business or capital gains), you need to report them in your ITR.
- High-Value Transactions: This includes depositing Rs. 1 crore or more in current accounts, Rs. 50 lakh or more in savings accounts, spending over Rs. 2 lakh on foreign travel, or having an electricity bill exceeding Rs. 1 lakh.
- Significant TDS/TCS: If your total TDS/TCS is Rs. 25,000 or more (Rs. 50,000 for senior citizens).
- High Turnover: If your business turnover is over Rs. 60 lakh or professional income exceeds Rs. 10 lakh.
Why File an ITR Even if It’s Not Mandatory?
Even if your income falls below the taxable threshold, filing an ITR offers several advantages:
- Proof of Income: ITRs are crucial legal documents that verify your income, especially useful for freelancers and self-employed individuals.
- Loan and Visa Applications: Banks often require ITRs for loan approvals, and many countries ask for them as part of visa applications.
- Claiming Refunds: It’s the only way to get back any excess tax you’ve paid.
- Carrying Forward Losses: You can carry forward losses to reduce future tax liabilities.
- Financial Discipline: It encourages better financial management and tracking.
- Avoid Penalties: Filing on time helps you avoid late fees and interest charges.
- Building Financial History: Consistent ITR filing builds a strong financial record, beneficial for future financial endeavors.
The deadline for non-audit ITRs this year has been extended to September 15, 2025, giving you more time to get your affairs in order. It’s always a good idea to file your ITR, even if not strictly required, to leverage its many benefits.