Who Must File an Income Tax Return? Key Conditions

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All Conditions in Which ITR Filing Is Required

Understanding Mandatory ITR Filing Conditions for FY 2025-26

According to the Income Tax Act of 1961, as outlined in the seventh provision to section 139(1), taxpayers are required to file their income tax returns even if their total income falls below the basic exemption limit, provided that specific conditions are met. Additionally, Rule 12AB establishes further criteria that mandate return filing. Here are some key conditions included in this rule:

Business Turnover Crosses ₹60 Lakh: Businesses with total sales, turnover, or gross receipts exceeding ₹60 lakh during the financial year 2025-26 are required to file an income tax return. This mandate ensures compliance with tax regulations and helps maintain accurate financial records for the business.

Tax Professional’s Income Above ₹10 Lakh: If you are someone who works in a profession, you need to file an income tax return (ITR) if your total earnings for the financial year 2025-26 exceed ₹10 lakh.

TDS and TCS Amount of ₹25,000 or More: Under the Seventh Proviso to Section 139(1) of the Income Tax Act, filing an Income Tax Return (ITR) is mandatory for individuals whose total Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) equals or exceeds ₹25,000 in a financial year. For resident senior citizens (aged 60 years or above), this threshold increases to ₹50,000 or more in combined TDS and TCS deductions.

Mandatory ITR Filing for Savings Bank Deposits Exceeding ₹50 Lakh: If you have a total of ₹50 lakh or more in one or more savings bank accounts, you are required to file an Income Tax Return (ITR) for the financial year 2025-26. This means you need to report your income and savings to the tax authorities.

Other Situations Requiring Mandatory ITR Filing

In addition to the Rule 12AB conditions, certain other requirements may apply for filing income tax returns under Section 139(1). These include situations such as:

Foreign Assets and Bank Accounts: For the relevant financial year, a resident and ordinarily resident (ROR) individual may be required to file an income tax return if they hold an asset or financial interest outside India, have signing authority in a foreign account, or are a beneficiary of an asset or financial interest located outside India.

Deposits of More Than ₹1 Crore in Current Accounts: If someone needs to file an income tax return, they are required to do so if the total amount of money deposited in their current accounts is more than ₹1 crore during the financial year.

Foreign Travel Expenses of More Than ₹2 Lakh: When filing your income tax return (ITR), you need to report any spending that goes over ₹2 lakh for foreign travel during the financial year. This rule applies whether the expenses are for yourself or someone else.

Electricity Expenses Exceeding ₹1 Lakh: If you are a taxpayer who has spent more than ₹1 lakh on electricity during the financial year, you are required to file an income tax return (ITR).

The guidelines for filing income tax returns (ITR) and the corresponding return forms provided by the Income Tax Department illustrate these conditions clearly.

Key Income Tax & Mandatory Filing Rules for FY 2025–26

For the financial year 2025-26, which will be assessed in 2026-27, it's important to keep in mind certain provisions related to income tax. These are outlined in the Income Tax Act of 1961, along with the specific forms you need to fill out for your tax returns in 2026-27. 

According to the guidance from the Income Tax Department, there are some key figures to remember: businesses with a turnover of ₹60 lakh or more, tax professionals with receipts of ₹10 lakh or more, and certain tax deductions at source (TDS) and tax collected at source (TCS) of ₹25,000 or ₹50,000. Additionally, there are savings account deposit thresholds of ₹50 lakh to be aware of. All of these details are part of the seventh proviso framework.

If you are looking for the right income tax software to make tax preparation and e-filing easier and more convenient, Gen IT helps you to simplify your return preparation and filing process with its range of tax-related features.

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