Who Should File Income Tax Return?

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Who Should File Income Tax Return?

Understanding and adhering to the income tax regulations is the responsibility of every eligible taxpayer in India.

One such crucial requirement is filing an income tax return. It is the process of declaring your income, tax liabilities, and deductions to the country's Income Tax Department.

If you haven’t filed an ITR before and are wondering who will file an income tax return and who will be exempt from it in 2024, we have got you covered.

ITR Full Form - What is the Meaning of Filing an ITR?

You may have already understood by now that the ITR full form is: Income Tax Returns.

Filing an ITR or income tax return is a process through which individuals or entities in India declare their income, tax deductions and tax liabilities to the Income Tax Department of India.

It is a mandatory requirement for every citizen, entity and other individuals who come under the income tax jurisdiction of the Indian government.

Who is Eligible for ITR?

Indian citizens and other individuals who are earning an income in the country and come under the tax jurisdiction of the government must pay tax as per their applicable tax rate.

The following are the entities or individuals who must file income tax returns in India:

Salaried Individuals: Every salaried employee, regardless of how much their annual income is, is required to file an ITR.

They are provided with Form 16 by their employer, which outlines their salary breakdown along with the tax deductions and other details for filing ITR.

Those with Taxable Income: Every Indian who is generating a taxable income should file an ITR.

In simple words, if you are earning in India and your income is above the maximum tax exemption limit, then you will have to file your ITR.

The tax exemption limit for an individual depends on several factors, such as gross income, choice of tax regime, age, gender, etc.

Businesses: All the companies and business organisations generating income in India, regardless of their profit/loss profile, must file ITR and declare their earnings for the specified financial year.

Self-employed Individuals: Self-employed individuals such as freelancers, designers, and other professionals are eligible to file ITR.

NRIs Earning in India: Non-residential Indians who are generating income in the country are also required to file income tax returns.

Those Seeking Tax Refund: If you have paid a higher tax amount than required and want to claim a refund, then you must file an ITR as soon as possible.

Those with LTCG Gains Over ₹2.5: If you have invested in a long-term scheme and earning capital gains of more than ₹2.5 lakhs, then you are eligible to file income tax returns

Foreign Company: Any foreign firm or business that is operating and earning in India is required to file ITR according to the category they fall into.

Income Held by Non-profit Organisation: If you receive income held by a non-profit organisation or charitable organisation must also file an ITR.

Those Seeking Loans: Most banks and financial institutions require ITR from their loan applicants. So, if you are planning to apply for a loan, then you should file your income tax returns.

Who is Exempt from Filing Income Tax Return?

Earning Below Taxable Income: Those who are earning less than the taxable limit are exempt from paying income tax.

The tax exemption limit is ₹2.5 lakhs per annum under the old tax regime and ₹3 lakh per annum under the new tax regime.

Agricultural Income: Individuals whose only source of income is agriculture or farming are exempt from filing income returns. However, if the agricultural income exceeds a certain threshold, then individuals may be required to file their ITR.

Certain NRIs: If the NRIs are only generating income from dividends or interest, or if their income is subject to TDS, then they might be exempted from filing tax returns.

Senior Citizens (above 75 years): Senior citizens above the age of 75 whose income consists of pension and interest can be exempt from filing ITR.

Income Tax Slabs for 2024-25 - Old Tax Regime Vs New Tax Regime

Income Slabs Old Tax Regime
Up to ₹2,50,000 Nil
₹2,50,001 to ₹3,00,000 0.05
₹3,00,001 to ₹5,00,000 0.05
₹5,00,001 to ₹10,00,000 0.2
Above ₹10,00,000 0.3
Income Slabs New Tax Regime
Up to ₹3,00,000 Nil
₹3,00,001 to ₹6,00,000 5% (tax rebate under section 87A)
₹6,00,001 to ₹900,000 10% (tax rebate under section 87A for income up to ₹7 lakhs)
₹900,001 to ₹12,00,000 0.15
₹12,00,001 to ₹15,00,000 0.2
Above ₹15,00,000 0.3

Different Categories of ITR to Choose From

Type of ITR Who is it For?
ITR-1 Salaried professionals, as well as pensioners earning up to ₹50 lakhs per year, use ITR-1 to file their income tax returns.  ITR-1 is also applicable when income is earned from a single house or sources (excluding lottery), which doesn’t need to be carried forward to the subsequent years. 
ITR-2 ITR-2 is applicable if the income from salary /pension, capital gains, more than one house, foreign asset or agriculture is below ₹5,000. 
ITR-3 ITR-3 must be filed by businessmen, professionals, and HUF members who generate income from a proprietary business. 
ITR-4 Any businessman or self-employed individual who has enrolled into a presumptive income scheme can use ITR-4 for filing tax returns. It includes freelancers, wholesalers, insurance agents, doctors, and so on. If the income from the business is more than ₹2 crore, then ITR-3 must be used. 

Benefits of Filing Income Tax Return

Claim Income Tax Refunds: If you have paid a higher tax than applicable to your income, you must file your ITR as soon as possible. It will help you initiate your tax refund as soon as possible.

Easy Loan Approvals: Filing your ITR makes it easier to get various kinds of loans, such as vehicle loans, home loans, personal loans, etc.

Official Proof of Income: An income tax return is a well-recognised proof of income as well as an address. You can use it instead of your payslips or bank statements.

Faster Visa Processing: A majority of embassies and consulates consider income tax return (ITR) as valid proof of income when applying for visas and passports.

Carry Forward Losses to Next Year: By filing your ITR within the specified deadline, you can carry forward your losses to the upcoming year. This, in turn, helps you in managing your finances in a better way.

ITR Filing Process - How to File an Income Tax Return?

Step 1: Visit the e-filing Website

On the e-filing website, click “Login”. Next, enter your PAN and hit “Continue”. Now, tick in the security message box, enter your password, and hit “Continue” again.

Step 2: Navigate to “File Income Tax Return”

On the top menu bar, go to “e-File” -> “Income Tax Returns” -> “File Income Tax Return”.

Step 3: Choose Your Assessment Year

Select the assessment year for which you are filing your ITR.

Step 4: Select Your Filing Status

On the following page, you will be required to choose your filing status from the given options: Individual, HUF, or others. Choose “Individual” and then “Continue”.

Step 5: Select the Right ITR Category

Next, select the ITR form applicable to your scenario. For instance, if you are a salaried individual with no other income, then you should choose ITR-1. You can check out your applicable ITR type in the above section.

Step 6: Select the Reason

In the next section, you will be requested to fill in the reason for filing your ITR. You need to select the option that aligns with your situation:

Your gross income exceeds the basic tax exemption limit.

You meet a particular criteria.

Other reasons

Step 7: Add Bank Details

Next, fill in your bank information. If these details are automatically updated, make sure to cross-check and verify them. Then, confirm the summary of ITR by validating all the details.

Step 8: Verify ITR

The final step to IT return filing is to e-verify your tax return. Remember, not verifying an ITR is the same as not filing an ITR at all.

There are several ways in which you can electronically verify your income tax return. You can do so via netbanking, Aadhaar OTP, EVC (Electronic Verification Code), etc.

Alternatively, you can also send a physical copy of form ITR-V to Bengaluru CPC to manually verify your tax return.

ITR Filing Date for FY 2024-25 - When to File an ITR?

As per section 139(1), the due date for filing income tax returns for AY 2024-25 is July 31st, 2024, unless changed by the government of India.

It means every eligible taxpayer must file their income tax return before July 31st 2024.

Is There a Penalty for Not Filing the ITR?

Yes. Any failure to meet the ITR deadline can attract several legal consequences, including hefty penalties.

As per section 234F, a late fee will be levied on the taxpayers who file their returns after the due date.

Effective from FY 2017-18, a fine of ₹5,000 will be imposed if you file your income tax return after July 31st 2024, but before December 31st.

Note that there is a small relief given to the low-income groups — if your total income is below ₹5 lakhs, then you need to pay a late fee of ₹1,000 instead of ₹5,000.


If you generate an income in India that is above the basic tax exemption limit, then you must file an income tax return mandatorily.

It applies to every earning individual including salaried employees, business owners, freelancers, and even NRIs.

Always remember, filing an ITR is not merely a mandatory income tax regulation, it is an exercise that keeps everything fair and transparent between the government and the citizens.

We have discussed everything you need to know about the ITR filing process and eligibility. We hope it helps!

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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How to use Section 54F in income tax?

How to use Section 54F in income tax?


In order to utilise this exemption, under section 54F, you need to reinvest the capital gains from the sale of property in a residential area. This needs to be done within the stipulated time so as to claim an exemption from long-term capital gains tax.

How much capital gain is tax-free on property?


If the entire sale proceeds are invested in residential property and meet the specified conditions, the entire capital gain is tax-free on the property under section 54F.

Can section 54F be applied to commercial property?


Section 54F is applicable only to residential property, exclusively. Hence, the exemption is not applicable to commercial property of any kind.

What happens if the entire capital gain after the property sale is not reinvested?


When there is a property sale, and the investor decides to invest a portion of the capital gain, the exemption under section 54F will be proportionately reduced. The remaining capital gain on the property sale will be taxable income.