ITR Filing: Few Instances When You Need To File ITR Even If You Have Less Income

It’s easy to assume that if you are earning below the income tax exemption limit, you don’t need to bother with filing income tax returns (ITRs). After all, no tax means no paperwork, right? Well, not quite. The tax rules have changed over time, and what many people don’t realise is that income is just one part of the story.

You may still have to file an ITR, even if your income falls below the threshold or even in the absence of an income, under certain cases.

Low Income Doesn’t Always Mean You’re Exempt

There are several financial situations where the law still expects you to file your ITR, even if your total income isn’t taxable. The government now tracks a wide range of financial activity, and certain transactions or lifestyle indicators can automatically make return filing mandatory.

For instance, even something as routine as spending a little more than usual on travel or utility bills, or making large deposits or withdrawals, might bring you under the scope of compulsory filing.

When You Need To File ITR

Here are a few instances when you need to file your ITR, irrespective of your income.

Owning Assets or Booking Losses: If you hold any assets abroad—even something seemingly small, like a foreign bank account or overseas investment—the law requires you to file a return, no matter your income level. And if you have incurred a capital loss that you plan to carry forward into future years, you will need to report it this year should you want to carry forward the loss. In case you don’t file your ITR, you cannot carry forward the loss.

ITR Refund: Many individuals who earn income either as contractual consultants, or in the form of bank interest will have their tax deducted at source. If that tax was more than what you technically owe, you can only get that money back by filing your return. If you skip it, the refund stays with the government.

Good Habits Go A Long Way

Filing your ITR isn’t just about obeying the law—it’s about creating a personal financial record. These returns often become useful when applying for loans, scholarships, visas, or even when renting property. It shows you’re responsible, organised, and transparent.

Don’t Wait To Be Told To File ITR

Also, not filing your return could invite tax notices in certain instances. Tax laws are evolving, and staying informed and up-to-date, can save you from trouble later.