It is mandatory for an individual to file an income tax return if the aggregate tax deducted at source (TDS) or tax collected at source (TCS) during a fiscal year is Rs 25,000 or more. The rule will be applicable even if a person’s income is below the taxable limit.

Earlier on April 21, 2022, the Central Board of Direct Taxes (CBDT) issued a notification — the Income-tax (Ninth Amendment) Rules, 2022 — to mention the additional conditions where it is compulsory to file income tax returns even when the individual’s income is less than basic exemption limit.

Income-tax (Ninth Amendment) Rules, 2022 notified the conditions for filing income tax returns in terms of clause (iv) of the seventh proviso to sub-section (1) of section 139 Income Tax Act, 1961. A new rule 12AB has been inserted in the Income-tax Rules, 1962, to mandate the additional provisions when furnishing a return of income tax is mandatory.

1) An individual has to file an income tax return if his total sales, turnover, or gross receipts in the business exceeds Rs 60 lakh during the previous year

2) If total gross receipts in profession exceed Rs 10 lakh during the previous year, the person needs to file a return.

3) If TDS or TCS during the year is Rs 25,000 or more, it is mandatory to file a return of income tax. For senior citizens, this rule will be applicable if the individuals aggregate TDS or TCS is Rs 50,000 or more a financial year.

4) The deposit in one or more savings bank accounts of the person, in aggregate, is Rs 50 lakh or more during the previous year, it is a must to file income tax return.

These additional provisions will come into force on the date of their publication in the official gazette, the CBDT notification said. So, the new rules will be applicable for the filing of income tax return for the financial year 2021-22 or assessment year 2022-23.

“With this new rule, the income tax department wants to expand the taxpayers’ base and reduce the incidence of tax avoidance. If an individual pays TDS of Rs 25,000 in a year, his or her gross income likely to be more than Rs 2,50,000 in a financial year, the basic tax exemption limit. In this case, it is mandatory to file an income tax return," explained Balwant Jain, tax and investment expert.

Earlier in 2019, the central government had widened the income-tax filing criteria. Now, it is mandatory to file income tax if the person deposits Rs 1 crore or more in the current account; spend Rs 2 lakh or more on foreign travels, pay Rs 1 lakh or more on electricity bill.

If the total income exceeds the basic exemption limit, an individual should file income tax return every year.