WHO SHOULD FILE ITR?
The Income Tax Department states the requirement of the following assessee to file yearly IT returns:
If your gross income exceeds the exemption limit before deductions under Sections 80C to 80U, then you must file an ITR return.
What is Form 16 ?
Form 16 is a certificate that contains details of the salary earned by an employee and the TDS duducted by the employer.
If the salary income exceeds the basic excemption limit , The employer is required to deduct TDS on salary at the time of making the payment and deposit the same with the government within the due date.
The employee receives this form annually from their company to include with their tax return.
Form 16 has two parts :
Part A contains the names, addresses, PAN numbers, TAN numbers of both employer and employee, tax deducted and deposited.
Part B specifies the employee's allowances, perquisites, other benefits and deductions allowed under Income Tax Act.
Every firm, whether it's a private limited, LLP, or partnership, is required to file IT returns, regardless of whether it made a profit or loss.
Individuals who are Directors in a Private Limited Company or a Partner in a Limited Liability Partnership firm are also required to file IT returns.
Having Income from other sources
you earn dividends from mutual funds, bonds, equities, fixed deposits, interest, or other sources, then you must file an IT return.
Income from charity or voluntary contributions
you receive income through charity or religious trusts, as well as income from voluntary contributions, then you are required to file IT returns.
NRIs and tech professionals on onsite deputation, as well as anyone with foreign income or assets, are required to file IT returns.
Other situations where it is mandatory to file ITR
If you have deposited an amount exceeding Rs.1 crore in one or more current accounts during the financial year
If you are seeking tax refunds, whether you are an individual or a business, then you must file IT returns.
If you have paid an electricity bill exceeding Rs. 1 crore in a single bill or on an aggregate basis during the financial year.
If you have spent Rs. 12 lakh or more on foreign country travel.
If you hold any asset outside India or have signing authority in any foreign account.
If your total sales or turnover in a business is Rs 60 lakhs or more during the financial year.
It is always advisable to file ITR even if you are not required to do so, as it helps in building a good credit history and may be required as proof of income in various situations like availing loans, obtaining visas, etc.