income tax

Who Must File Income Tax Returns for FY 2023-24: A Comprehensive Guide

Introduction

As the Income Tax Return (ITR) filing period for the Financial Year 2023-24 commences, understanding your obligations for filing is crucial. Below is a detailed guide on who is mandated to file an Income Tax Return as per Section 139 of the Income Tax Act.

Who Must File ITR?

Requirements for Companies and Firms

  1. Companies and Partnership Firms: All companies and partnership firms, including Limited Liability Partnerships (LLPs), must file their Income Tax Returns regardless of their income level.

Requirements for Individuals and Other Entities

  1. Individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons: These entities are required to file an ITR if their income exceeds the exemption threshold, without considering deductions or exemptions under specific sections:

    • Exemption Limits:
      • Old Regime: ₹2,50,000
      • New Regime (Section 115BAC): ₹3,00,000

  2. Mandatory Filing Conditions: Individuals (excluding companies and firms) must file ITR irrespective of income if they meet any of the following criteria during the previous year:

    • Deposited amounts exceeding ₹1 crore in one or more current accounts (cash and electronic deposits included).
    • Aggregate deposits of ₹50 lakhs or more in one or more savings bank accounts (cash and electronic deposits included).
    • Incurred expenditure exceeding ₹2 lakhs for travel abroad for themselves or others.
    • Incurred expenditure exceeding ₹1 lakh on electricity consumption.
    • Total sales, turnover, or gross receipts from business exceeding ₹60 lakhs, or from a profession exceeding ₹10 lakhs.
    • Had tax deducted at source (TDS) or tax collected at source (TCS) during the previous year amounting to ₹25,000 or more (for senior citizens, this threshold is ₹50,000).

Requirements for Residents

  1. Residents (Not Ordinarily Resident): A resident individual must file ITR if, at any point during the previous year, they:
    • Held beneficial ownership or had signing authority over any asset located outside India, including financial interests in foreign entities.
    • Were a beneficiary of any asset located outside India, including financial interests in foreign entities.

Conclusion

Understanding the requirements for filing an Income Tax Return is essential to comply with legal obligations. Be sure to assess your situation based on the criteria outlined in this guide to determine your filing requirements for FY 2023-24.