Attention those earning less than ₹4 lakh! You may not have to pay tax, but filing an ITR is mandatory; know these 6 strict rules..

ITR Filing Rules for Income Below Exemption Limit: The deadline for filing the Income Tax Return (ITR) without a late fee for the Assessment Year 2026-27 is July 31, 2026, which is fast approaching. According to the Income Tax Department, over 3 crore taxpayers have already filed their ITRs.

It is generally believed that filing an ITR is mandatory only if annual income exceeds ₹4 lakh under the new tax regime or ₹2.5 lakh under the old tax regime. However, did you know that even if your annual income is below this basic exemption limit, you might still be required to file an ITR to avoid penalties or legal consequences?

Section 139(1) of the Income Tax Act, 1961, outlines six specific conditions under which filing an ITR becomes mandatory. Let us understand these in simple terms.

Filing ITR is mandatory in these 6 situations, even with low income:

Even if your annual income is below the basic exemption limit, you must file an ITR if any of the following conditions are met:

1- Deposit of over ₹1 crore in a current account: If you have deposited cash amounting to ₹1 crore or more in one or more current accounts during the financial year.

2- Expenditure of over ₹2 lakh on foreign travel: If you have spent more than ₹2 lakh on foreign travel—such as air tickets, tour packages, etc.—for yourself or any other person.

3- Electricity bill exceeding ₹1 lakh: If your total electricity bill for the entire year exceeds ₹1 lakh.

4- Exceeding TDS or TCS limits: If the total TDS/TCS deducted against your income during the financial year is ₹25,000 or more (for individuals under 60 years of age). For senior citizens (aged 60 years or above), this limit is set at ₹50,000.

5- Deposits of ₹50 lakh or more in savings accounts: If the total deposits across one or more of your savings accounts amount to ₹50 lakh or more during the financial year.

6- Foreign assets or signing authority on a foreign bank account: If you are a resident of India and hold assets, financial shares, or signing rights for a foreign bank account abroad.

4 Major Benefits of Filing an ITR Despite Low Income

Even if filing an ITR is not legally mandatory for you, there are significant benefits to filing a voluntary return:

Easier loan approval: An ITR serves as the strongest proof of income when applying for home loans, car loans, or personal loans.

Visa processing: Submitting ITRs for the past 2–3 years is often mandatory to obtain visas for countries like the USA, the UK, and European nations.

Claiming TDS refunds: Filing a return is the only way to reclaim any TDS that has been deducted.

Carrying forward losses: Filing an ITR on time is essential to set off losses incurred in the stock market, mutual funds, or business against future profits.

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