For the Assessment Year (AY) 2026-27, the Income Tax Department allows certain individuals to be exempt from filing ITR if they fall under the basic income exemption norms. Under the new tax regime, those with an annual income of up to Rs 4 lakh are generally not required to file an ITR based on the basic exemption limit. Under the old tax regime, the basic exemption limit remains Rs 2.5 lakh.
However, the Income Tax Department has made ITR filing mandatory for certain individuals even if their income is below these limits. This includes people who own foreign assets. It also covers those who undertake specified high-value transactions or are running businesses with turnover above the prescribed threshold.
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Taxpayers are advised to check these conditions before deciding not to file their ITR. Failure to comply with the rules may attract notices or penalties and can lead to financial distress.
Conditions For Mandatory ITR Even With Basic Income Exemption Limit:
1. Foreign Assets: Resident individuals must file an ITR if they own, hold or are beneficiaries of any foreign asset or financial interest, or have signing authority in a bank account located outside India.
2. The Income Tax Department also requires certain individuals to file an ITR for high-value transactions such as depositing more than Rs 1 crore in one or more current accounts. Filing is also mandatory if deposits in savings accounts exceed Rs 50 lakh in a financial year.
3. Those spending over Rs 2 lakh on foreign travel, or paying electricity bills exceeding Rs 1 lakh must also file ITR.
4. Filing is also mandatory for individuals with a business turnover of more than Rs 60 lakh or gross professional receipts exceeding Rs 10 lakh.
5. As per the rules, individuals are also required to file an ITR if their total Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) during the financial year is Rs 25,000 or more. For senior citizens, the threshold is Rs 50,000.
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