ITR submitting FY 2024-25: Why submitting Revenue Tax Return is vital even if in case you have no tax to pay – defined

By Surabhi MarwahITR submitting FY 2024-25 (AY 2025-26: Because the timeline for submitting Revenue-tax Returns (ITR) approaches (September fifteenth for this FY, after extension), people, notably these whose revenue falls under the taxable threshold, in addition to Non-Resident Indians (NRIs) who don’t earn any revenue in India, typically wonder if they’re required to file a tax return in India. The reality is, submitting your return performs an important position in varied points of your monetary and authorized life.

The misunderstanding of “No Tax = No ITR”

A typical false impression is – “If I don’t owe any tax, why ought to I file a tax return?” Let’s make clear a basic level – the Revenue-tax Act, 1961 (the Act) requires people to file tax returns if their gross complete revenue exceeds the fundamental exemption restrict earlier than claiming deductions. For Monetary Yr (FY) 2024-25, the brink below the previous tax regime is INR 2.5 lakhs for people under 60 years of age (INR 3 lakhs for resident people aged between 60 and 80 years, and INR 5 lakhs for resident people aged above 80 years), and it’s INR 3 lakhs below the brand new/concessional tax regime. Because of this people whose revenue isn’t taxable on account of claiming the rebate are additionally required to file tax returns. Nevertheless, that is simply the start line. There are a lot of different conditions the place you have to file an ITR even when you don’t owe any tax or your revenue is under the exemption restrict. This has been additional defined under.Additionally Learn | ITR submitting FY 2024-25: How can taxpayers change between previous and new revenue tax regimes? DefinedFor instance, Mr. A, earned INR 2.4 lakhs in FY 2024–25, primarily from pension and glued deposits within the financial institution. Regardless of being under the exemption restrict, his financial institution deducted INR 6,000 as TDS on curiosity from mounted deposits. Submitting an ITR is his solely method to declare a refund of this deducted tax.Carrying ahead of capital lossesOne key cause to file your ITR, even if in case you have no taxable revenue, is the power to hold ahead capital losses for future tax advantages. It’s nevertheless crucial to notice that carry ahead of losses from home property will not be allowed below the brand new tax regime. Think about you incurred a loss from sale of shares throughout FY 2024-25. If you don’t file your ITR on time, these losses can’t be carried ahead to offset future capital good points. Submitting your return ensures these losses are offset with future capital good points, making a nasty funding yr probably work in your favour later.The significance of international asset reportingOne other essential cause to file returns, even with low or no revenue, is the requirement for international asset disclosure for people qualifying as Resident and Ordinarily Residents (ROR) in India Such people should report their abroad belongings below Schedule FA of the ITR types. Overseas belongings resembling financial institution accounts, monetary pursuits, ESOPs allotted below the employer’s abroad inventory incentive scheme, immovable property are to be reported whatever the revenue ranges. Failure to take action can result in penalties below the Black Cash Act, 2015 and, even prosecution in some circumstances.Additionally Learn | ITR e-filing FY 2024-25: What’s the good thing about pre-filled ITR types on the revenue tax portal? High factorsFor instance, Mr. A and his partner are joint house owners of a international property. On this case, each should report the asset of their respective ITRs. This joint possession requires cautious consideration to make sure compliance, as failure to report can entice scrutiny from tax authorities.Lately, world info sharing has elevated below the Frequent Reporting Commonplace (CRS). ROR receiving international remittances or holding international belongings should guarantee compliance with tax rules. Skipping the submitting of ITR to keep away from FA reporting isn’t solely dangerous however will also be questioned. Tax authorities are actually outfitted with computerized change of data mechanisms that present them with insights into international transactions/ international belongings, resulting in notices and requests for info. Due to this fact, it’s essential for people to file their ITRs precisely and on time to keep away from penalties and guarantee compliance.Widened scope of necessary ITR submitting below part 139(1) of the ActThe Act specifies varied standards for necessary tax return submitting. Listed here are a number of the eventualities that require people to file ITR, regardless of their revenue ranges:

When you meet any of those standards, even when your revenue is under the exemption restrict, you’re required to file your return.Additionally Learn | ITR submitting FY 2024-25: Do you might want to file your revenue tax return if TDS has been deducted? DefinedITR: Your Monetary PassportIn at this time’s world, ITRs have grow to be important paperwork past tax compliance. Monetary establishments, embassies, and even landlords view your return as a testomony to your credibility.When you plan to use for a visa, particularly to international locations just like the US, UK, Schengen nations, or Canada, you’ll typically have to submit ITRs for the previous 2-3 FYs. Not having an ITR may result in delays or denials. Equally, mortgage functions, whether or not for a house or automobile, are sometimes assessed based mostly on the revenue reported in ITRs, even when your financial institution statements look good. For instance, Priya, a freelancer, earned INR 2 lakhs in FY 2024-25. She didn’t file an ITR, pondering it was not needed. Later, whereas making use of for a Schengen visa, her software was delayed as a result of she couldn’t submit ITRs from the final two FYs, one thing consulates typically anticipate, even with out taxable revenue.Additionally Learn | Revenue Tax Return: What’s Kind 16? High issues taxpayers ought to test on this doc earlier than submitting ITRIn conclusion, submitting an ITR is greater than only a tax obligation; it’s a method to set up your monetary presence, guarantee transparency, declare rightful refunds, and meet compliance necessities in an interconnected world. Whether or not you’re a pensioner with TDS, salaried particular person with international shares acquired below an abroad ESOP plan, a pupil with abroad accounts, or a homemaker planning worldwide journey, your tax return can converse volumes when different paperwork can’t. Therefore, it’s important that you just consider your scenario holistically to find out whether or not there’s a requirement to file a tax return or not.(The writer, Surabhi Marwah is Tax Accomplice, EY India. Ammu Sadanandhan, Director- Tax, EY India and Ojaswita Pathak, Tax Skilled, EY India additionally contributed to the article.)