Income Tax Return 2025: Situations Where You Must File ITR Even if Your Income is Below Exemption Limit

Filing an Income Tax Return (ITR) is usually mandatory when an individual’s annual income crosses the basic exemption threshold. Under the old tax regime, people below 60 years of age enjoy exemption on income up to ₹2.5 lakh, while under the new regime, the exemption limit has been raised to ₹3 lakh.

This means that if your income does not exceed the respective limit, you are not required to file an ITR. However, there are certain conditions where filing a return becomes mandatory, even if your income is below the exemption level. Ignoring these conditions can invite a tax notice from the Income Tax Department.

1. Spending Over ₹2 Lakh on Foreign Travel

If you have spent more than ₹2 lakh on overseas travel, you are required to file an ITR regardless of your income level. This condition also applies if you have sponsored someone else’s foreign trip and the total expenditure exceeds ₹2 lakh.

Therefore, even if your annual income falls below ₹2.5 lakh (old regime) or ₹3 lakh (new regime), you must file your return if such expenses are incurred.

2. Paying Electricity Bills Exceeding ₹1 Lakh

Another situation where filing ITR becomes mandatory is if your electricity bill payments exceed ₹1 lakh in a financial year. Whether your income is taxable or not, crossing this threshold obligates you to report it by filing a return.

This provision helps tax authorities track high-value expenditures and ensures better compliance.

3. Depositing Over ₹1 Crore in a Bank Account

If you have deposited ₹1 crore or more in one or multiple bank accounts during a financial year, you must file your income tax return.

It does not matter whether the deposit was made in a single transaction or through multiple smaller deposits that collectively exceed ₹1 crore. In both cases, the ITR filing requirement is triggered.

4. High Business Turnover

Individuals engaged in business must file ITR if their total turnover, sales, or gross receipts exceed ₹60 lakh in a financial year.

Similarly, for professionals, filing ITR is mandatory if their gross receipts surpass ₹10 lakh in the previous year.

5. TDS and TCS Exceeding ₹25,000

Even if your income is low, if the total Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) in your case exceeds ₹25,000 in a financial year, you are required to file a return.

For senior citizens (aged 60 years and above), the threshold is slightly higher at ₹50,000.

6. Large Savings Account Deposits

If you have deposited ₹50 lakh or more in one or more savings accounts during a financial year, you must file ITR irrespective of your income level.

This rule ensures that individuals making significant deposits remain under the purview of the tax system.

Why These Rules Exist

The government has introduced these provisions to track high-value transactions that may otherwise go unreported. Even if an individual’s declared income is below the taxable limit, their spending or deposits can indicate higher financial capacity. Filing ITR in such cases helps maintain financial transparency and prevents tax evasion.

Final Take

While the exemption limits under both the old and new tax regimes provide relief for low-income individuals, certain financial activities automatically make it mandatory to file ITR.

You must file ITR if:

• You spend over ₹2 lakh on foreign travel

• Your electricity bills exceed ₹1 lakh annually

• You deposit ₹1 crore or more in bank accounts

• Business turnover crosses ₹60 lakh or professional receipts exceed ₹10 lakh

• TDS/TCS is more than ₹25,000 (₹50,000 for senior citizens)

• Deposits in savings accounts exceed ₹50 lakh in a year

Failing to file a return in these cases can attract notices and penalties. Hence, it is always advisable to check these conditions carefully and file ITR on time, even if your income is below the exemption limit.