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Who Needs to File ITR in India and Who Doesn’t – Complete Guide for FY 2025-26
Income Tax Return (ITR) filing is a crucial part of financial compliance in India. However, not everyone is required to file an ITR. Understanding whether you need to file or not can save you time, avoid penalties, and help you manage your finances better.
In this guide, we’ll cover:
- Who is required to file ITR
- Who can skip filing
- Important exemptions and benefits of filing even when not mandatory
1. Who is Required to File ITR?
Filing ITR is mandatory if any of the following applies:
| Criteria | Explanation |
|---|---|
| Income above basic exemption limit | For FY 2025-26, individuals earning above ₹3,00,000 (below 60 yrs), ₹3,50,000 (60–79 yrs), ₹5,00,000 (80+ yrs) must file ITR. |
| Tax deducted at source (TDS) | If TDS has been deducted from your salary, bank interest, or other income, filing ITR is required to claim refunds. |
| Foreign assets or income | Individuals having foreign income, assets, or bank accounts must file ITR. |
| Business or professional income | Individuals earning from business, profession, or freelancing must file ITR. |
| Capital gains | Sale of property, stocks, or mutual funds generating capital gains requires ITR filing. |
2. Who Doesn’t Need to File ITR?
Certain individuals may not need to file ITR if they meet the following conditions:
2.1 Income Below Exemption Limit
| Age Group | Basic Exemption Limit (FY 2025-26) |
|---|---|
| Below 60 years | ₹3,00,000 |
| 60–79 years | ₹3,50,000 |
| 80+ years | ₹5,00,000 |
- If your total taxable income is below these limits and no other criteria apply, ITR filing is generally not mandatory.
2.2 Exempt Income
Some incomes are fully tax-exempt and do not require filing:
- Agricultural income below ₹5,000
- Certain allowances for government employees
- Tax-free interest from specified bonds or savings schemes
2.3 No Tax Liability and No Refund
If your employer has already deducted TDS and:
- You have no other taxable income
- You are not claiming any refund
Then filing ITR is optional.
2.4 Non-Residents With No Taxable Income
NRIs with no income sourced in India generally aren’t required to file ITR.
3. Why You Might Still Want to File ITR Even If Not Mandatory
Even if you fall into the “not required” category, filing ITR can be beneficial:
- Claim refunds for excess TDS deducted
- Loan or visa applications may require proof of income via ITR
- Carry forward losses to offset future taxable income
- Maintain financial records for personal and legal purposes
4. Key Points to Remember
| Point | Detail |
|---|---|
| Filing Deadlines | Usually 31st July for individuals (may vary) |
| Forms | ITR-1 for salaried individuals, ITR-2/3/4 for other cases |
| Penalties | Late filing may attract ₹5,000 fine (Section 234F) |
| Audit Requirement | Not needed if turnover < ₹1 crore for businesses/professionals under normal circumstances |
5. Conclusion
Understanding who needs to file ITR and who doesn’t is crucial for financial planning. While some individuals may not be legally required to file, doing so can bring several benefits, including tax refunds and smoother financial documentation for loans and visas.
Pro Tip: Even if your income is below the exemption limit, filing ITR can establish a good financial record for future needs.