Income Below Rs. 12 Lakh? You Still Have to File ITR – New Tax Rules Explained

Introduction

In a significant relief to taxpayers, the Finance Minister has announced that from the financial year 2025-26, individuals with an annual income of up to Rs. 12 lakh will not be liable to pay income tax, thanks to a new rebate mechanism. While this announcement brings great benefits, it is essential to understand the implications and scenarios where ITR (Income Tax Return) filing remains mandatory even if your income falls within the exempted range. This article outlines key situations where filing an ITR is still required.

Cases Where ITR Filing is Mandatory Even Below the Exemption Limit

Although there is no tax liability up to Rs. 12 lakh due to the new rebate, individuals must still file an ITR in the following cases:

1. Deposits Above Rs. 1 Crore in a Bank Account

If an individual deposits more than Rs. 1 crore in one or multiple bank accounts (savings/current) in a financial year, filing an ITR is mandatory. This ensures compliance with tax laws and financial transparency.

2. Foreign Travel Expenditure Exceeding Rs. 2 Lakh

Individuals who spend more than Rs. 2 lakh on foreign travel in a financial year must file an ITR, even if their taxable income is below Rs. 12 lakh.

3. High Electricity Consumption

If an individual incurs an electricity bill exceeding Rs. 1 lakh in a year, ITR filing becomes mandatory to track high-value expenditures.

4. Holding Foreign Assets or Financial Interest

Individuals who hold assets outside India, have financial interests in a foreign entity, or act as beneficiaries of foreign assets must file an ITR, irrespective of their income level.

5. Business Turnover or Professional Receipts Above a Certain Limit

• If a business turnover exceeds Rs. 60 lakh in a financial year.
• If professional income exceeds Rs. 10 lakh in a financial year.

6. TDS or TCS of Rs. 25,000 or More (Rs. 50,000 for Senior Citizens)

If an individual’s tax deducted at source (TDS) or tax collected at source (TCS) exceeds Rs. 25,000 (Rs. 50,000 for senior citizens), ITR filing is necessary.

7. Income from Cryptocurrencies or Other Digital Assets

As per recent tax regulations, earnings from cryptocurrency transactions, non-fungible tokens (NFTs), or other virtual digital assets (VDAs) are taxable and require an ITR filing.

8. Loan or Visa Applications

Even if an individual’s income is below the exemption limit, ITR filing is often required when applying for loans, credit cards, or visas to prove financial credibility.

Conclusion

The new tax rebate up to Rs. 12 lakh in FY 2025-26 is a significant step towards easing the tax burden on individuals. However, various high-value transactions still necessitate ITR filing for transparency and compliance. It is advisable to stay updated with tax regulations and file returns on time to avoid penalties and maintain a clean financial record.