{"id":29452,"date":"2021-04-28T11:55:26","date_gmt":"2021-04-28T06:25:26","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=29452"},"modified":"2021-04-28T11:56:04","modified_gmt":"2021-04-28T06:26:04","slug":"file-itr-below-2-5-lakhs","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/file-itr-below-2-5-lakhs\/","title":{"rendered":"Is it Mandatory to File ITR below 2.5 Lakhs? Let\u2019s Understand in Detail!"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Every income earning citizen of India is subject to The\u00a0Income Tax Act, 1961, and the Income Tax Rules, 1962, and is obligated to file returns at the end of every\u00a0financial year with the Income Tax Department if his income is under the taxable limit.\u00a0The <a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\"><strong>income tax return<\/strong><\/a> should be filed before the specified due date. The Finance Ministry has framed an Income Tax slab in accordance with which the citizens have to comply and file their Income tax return. It starts from income earners from 0 to 2.5 lakhs and hence the question always comes that whether is it Mandatory to File an ITR below 2.5 lakhs?<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/file-itr-below-2-5-lakhs\/#What_Constitute_Income_Tax\" >What Constitute Income Tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/file-itr-below-2-5-lakhs\/#What_is_Income_Tax_Slab\" >What is Income Tax Slab?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/file-itr-below-2-5-lakhs\/#Is_it_Mandatory_to_file_ITR_below_25_lakhs\" >Is it Mandatory to file ITR below 2.5 lakhs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/file-itr-below-2-5-lakhs\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Constitute_Income_Tax\"><\/span>What Constitute Income Tax?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>Income Tax in India is divided into two categories:<\/strong><\/em><\/p>\n\n\n\n<ul><li><strong>Direct Taxes<\/strong> &#8211; Direct tax is a tax that is directly paid on an individual\u2019s income to the government. Direct tax is further divided into two:-<ul><li><strong>Income Tax<\/strong>\u00a0\u2013 Any individual or a Hindu Undivided Family or any taxpayer except the companies, are liable to pay Income tax from the income received. The\u00a0Income Tax Act, 1961 mentions the rate at which the income should be taxed.<\/li><li><strong>Corporate Tax<\/strong>\u00a0\u2013 This tax is paid by the companies on the profits made by them from their businesses. Even here a particular tax rate has been prescribed by the income tax laws of India for the corporate world.<\/li><\/ul><\/li><li><strong>Indirect Taxes<\/strong> &#8211; Indirect tax is a tax that someone else collects on the behalf of the taxpayer and is indirectly paid to the government. Few examples: Theatres, restaurants and e-commerce websites recover taxes from taxpayers on goods purchased by him or any services availed by him.\u00a0<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/types-of-itr-income-tax-returns-online\/\">Types of ITR (Income Tax Returns)<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Income_Tax_Slab\"><\/span>What is Income Tax Slab?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Income tax slab is the division of\nsalaries which are applicable to different income earners and in respect of it\nthe rate of income tax is mentioned which the respective taxpayer is bound to\npay. So, each of the taxpayers are differently taxed under the Income Tax Act. <\/p>\n\n\n\n<p>The Indian companies and the firms have their tax rate fixed which is 30% of the profits. But the individual, <em><strong>HUF<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/HUF\"><em><strong>[1]<\/strong><\/em><\/a><\/sup><em><strong> <\/strong><\/em>and other taxpayers are taxed according to their income as under the income tax slab. Tax slab or tax brackets are the incomes of people grouped into blocks. In India, we have divided the tax brackets into four tax slabs each with an escalating tax rate.<\/p>\n\n\n\n<table class=\"table table-bordered\"><thead><tr><td>\n   <strong>Income Tax Slab<\/strong>\n   <\/td><td>\n   <strong>New Regime Income Tax\n   Slab Rates <br>\n   <\/strong><strong>(Applicable for All Individuals &amp; HUF)<\/strong><strong><\/strong>\n   <\/td><\/tr><\/thead><tbody><tr><td>\n  Rs\n  0.0 \u2013 Rs 2.5 Lakhs\n  <\/td><td>\n  NIL\n  <\/td><\/tr><tr><td>\n  Rs 2.5 lakhs- Rs 3.00\n  Lakhs\n  <\/td><td>\n  5%&nbsp;(tax\n  rebate u\/s 87a is available)\n  <\/td><\/tr><tr><td>\n  Rs. 3.00 lakhs \u2013 Rs 5.00\n  Lakhs\n  <\/td><\/tr><tr><td>\n  Rs. 5.00 lakhs- Rs 7.5\n  Lakhs\n  <\/td><td>\n  10%\n  <\/td><\/tr><tr><td>\n  Rs 7.5 lakhs \u2013 Rs 10.00\n  Lakhs\n  <\/td><td>\n  15%\n  <\/td><\/tr><tr><td>\n  Rs 10.00 lakhs \u2013 Rs.\n  12.50 Lakhs\n  <\/td><td>\n  20%\n  <\/td><\/tr><tr><td>\n  Rs. 12.5 lakhs- Rs. 15.00\n  Lakhs\n  <\/td><td>\n  25%\n  <\/td><\/tr><tr><td>\n  &gt; Rs. 15 Lakhs\n  <\/td><td>\n  30%\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p><strong>\u00a0Individuals (Senior Citizen)<\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  Up to Rs. 3,00,000\n  <\/td><td>\n  \u2013\n  <\/td><\/tr><tr><td>\n  Rs. 3,00,000 to Rs.\n  5,00,000\n  <\/td><td>\n  5%\n  <\/td><\/tr><tr><td>\n  Rs. 5,00,000 to Rs.\n  10,00,000\n  <\/td><td>\n  20%\n  <\/td><\/tr><tr><td>\n  Above Rs. 10,00,000\n  <\/td><td>\n  30%\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p><strong>Individuals (Super Senior Citizen)<\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  Up to Rs. 5,00,000\n  <\/td><td>\n  \u2013\n  <\/td><\/tr><tr><td>\n  Rs. 5,00,000 to Rs.\n  10,00,000\n  <\/td><td>\n  20%\n  <\/td><\/tr><tr><td>\n  Above Rs. 10,00,000\n  <\/td><td>\n  30%\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_Mandatory_to_file_ITR_below_25_lakhs\"><\/span>Is it Mandatory to file ITR below 2.5 lakhs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The answer to this question is:\nNo, it is not mandatory to file ITR below 2.5 lakhs. As per the tax slab under\nIncome Tax Act it is clearly given that any individual whose income is falling Up\nto Rs.2, 50,000 has a zero Income tax rate. Thus, it is not compulsory to file\nincome tax return or pay any taxes.<\/p>\n\n\n\n<p>However, it is recommended that a taxpayer can file a NIL income tax return and pay no tax. So, the taxpayer on ITR below 2.5 lakhs can still file income tax return as there are many benefits of it. Thus, given below are the various benefits even on zero tax liability:-<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/Is-it-Mandatory-to-file-ITR-below-2.5-lakhs.png\" alt=\"benefits even on zero tax liability\" class=\"wp-image-29453\" width=\"510\" height=\"529\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/Is-it-Mandatory-to-file-ITR-below-2.5-lakhs.png 959w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/Is-it-Mandatory-to-file-ITR-below-2.5-lakhs-289x300.png 289w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/Is-it-Mandatory-to-file-ITR-below-2.5-lakhs-768x798.png 768w\" sizes=\"(max-width: 510px) 100vw, 510px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Loans<\/h3>\n\n\n\n<p>Whoever applies for loan has to\ngive their account statement as evidence to the bank. All the major banks\ndemand a copy of tax returns of the taxpayers. These banks ask for salary slip where\ncertificate of TDS, deductions and a copy of last two years of the Income Tax\nReturn is mandatory for the individual to submit.<\/p>\n\n\n\n<p>Moreover, submission of copy of the\nITR receipt even when he is filing ITR below 2.5 lakhs makes it comparatively\neasy if there are chances of the loan application getting rejected or getting loan\nof less amount than what the person has exactly applied for.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To Claim Refund<\/h3>\n\n\n\n<p>When a person has made any investment through fixed deposits the chances are that the person gets taxed on the basis of TDS. So, the person will have to claim refund from the Income Tax Department. <\/p>\n\n\n\n<p>Thus, for claiming the refund\namount it is necessary to file the returns as without that the person will have\nto go without claiming his refund amount. Even if the person is falling under the\ncategory of zero tax liability, he can avail the benefit of claiming the whole\nrefund amount only if he lies in the category of ITR below 2.5 lakhs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To Carry Forward Losses<\/h3>\n\n\n\n<p>If the person is not filing ITR, he\nwon\u2019t be able to carry forward the losses faced in the financial year. So,\nfiling ITR enables to carry forward the capital loses to eight successive years\nright away after the year of loss so that in case of capital gain the amount\nwould be adjusted. Thus, the person shall not be liable to pay taxes in the\nyear of capital loss only if he is filing ITR below 2.5 lakhs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Visa Processing<\/h3>\n\n\n\n<p>ITR receipts are required to prove\nwhen the person is travelling overseas or planning on travelling to USA,\nCanada, UK and Europe. Therefore, it is necessary to show copy of ITR as foreign\nconsulates check the ITR receipts during visa interviews to ensure a legitimate\nsource of income in India. Therefore, experts suggest that person should file\nITR below 2.5 lakhs as that will be helpful while travelling to foreign\ncountries.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Purchasing a High Life-Cover<\/h3>\n\n\n\n<p>It is\nvery common for the people topurchase a life cover of above Rs. 50 Lakh. Nonetheless,\nthe insurance companies only permit to choose for such high cover when they are\nshown the ITR documents for verification of the annual income because the amount\nof cover is mainly dependent on the income as earned by the person. Therefore,\nit is recommended to file ITR below 2.5 lakhs of salary to show the insurance\nprovider.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Hence, it is not mandatory to file an ITR below 2.5 lakhs but it is highly recommended that in order to avail the advantages of Income tax the person should file nil income tax even if his income range is below 2.5 lakhs. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/\">ITR for Businesses: Things you need to Know<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every income earning citizen of India is subject to The\u00a0Income Tax Act, 1961, and the Income Tax Rules, 1962, and is obligated to file returns at the end of every\u00a0financial year with the Income Tax Department if his income is under the taxable limit.\u00a0The income tax return should be filed before the specified due date. [&hellip;]<\/p>\n","protected":false},"author":33,"featured_media":29460,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[1696],"acf":{"service_id":"403"},"authorName":"Kandarp Vanita","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/image_2021_02_01T09_09_44_024Z.png","authorDescription":"Kandarp Vanita has done masters in Corporate and Commercial Law from WB National University of Juridical Sciences. She has 3 yrs of experience in drafting legal documents &amp; dissertations. Being a curious reader, she is also passionately into providing legal backups and comprehensive understandings in every aspect of Law to the firms.","postViews":4964,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29452"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=29452"}],"version-history":[{"count":16,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29452\/revisions"}],"predecessor-version":[{"id":29471,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29452\/revisions\/29471"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/29460"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=29452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=29452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=29452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}