In India, is it mandatory to file returns even if the income limit is below the exemption limit?

In India, is it mandatory to file returns even if the income limit is below the exemption limit?

No, it is not mandatory for you to file Income Tax Returns if the income is below the exemption limit but one should preferably file ITR since your ITR is not just a financial document but also indicates your annual earnings, banks and NBFCs seek copies of your ITR when you approach them for a loan. Filing your returns despite having no taxable income will increase your chances of getting a loan approved as compared to someone with the same earnings but no ITR filings.

Also, ITR is mandatory if you own foreign assets. As an Indian resident, if you own any foreign assets, you are required to file your income tax returns as per law. This includes having movable or non-movable foreign assets including a bank account overseas. Failure to disclose your foreign holdings can lead to a possible fine and is considered to be an economic offence. Hence, one should still file ITR so that you can avail all these benefits easily.


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