Income Tax Return (ITR) Filing: A Strategic Step Towards Financial Strength

"Strategic tax filing isn’t just compliance—it’s a step towards stronger financial growth."

Understanding Income Tax Return (ITR)

Income Tax Return (ITR) is an official document through which an individual, firm, or company declares:

• Total income earned during the financial year

• Deductions and exemptions claimed

• Taxes paid and taxes payable, if any

The Income Tax Department provides different forms (ITR-1 to ITR-7), depending on the type of taxpayer and nature of income, such as salary, business profits, capital gains, or foreign income sources.

Taxpayers Required to File ITR

The obligation to file ITR extends to a wide category of taxpayers, including:

• Individuals: Salaried employees, freelancers, self-employed professionals

• Companies and Firms: Regardless of profit or loss

• Hindu Undivided Families (HUFs)

• Trusts and Associations

ITR filing becomes mandatory in the following cases:

Scenario	Condition
Gross income before deductions exceeds ₹2.5 lakh (individuals below 60 years)	Old Tax Regime
Gross income before deductions exceeds ₹3 lakh (individuals aged 60–80 years)	Old Tax Regime
Gross income before deductions exceeds ₹5 lakh (individuals above 80 years)	Old Tax Regime
Gross income exceeds ₹4 lakh	New Tax Regime
Claiming tax refund	Any excess TDS requires ITR filing
Income from property, capital gains, or foreign sources	Mandatory
Carrying forward business or capital losses	Filing compulsory
All companies and firms	Regardless of income or loss

Strategic Benefits of Filing an ITR

Filing an ITR offers strategic financial advantages even when not legally mandatory:

• Facilitates Easy Loan Approvals: Banks often require ITR copies when evaluating loan applications.

• Strengthens Visa Applications: Embassies consider ITRs as proof of financial credibility.

• Enables Refund Claims: Refund of excess TDS is processed only when ITR is filed.

• Acts as Valid Income Proof: Essential for credit card applications, insurance covers, and large purchases.

• Avoids Late Filing Penalties: Penalty under Section 234F can be up to ₹5,000 or more.

• Allows Carry Forward of Losses: Only timely filed returns allow future set-off of business and capital losses.

• Required for Tenders and Contracts: Government and corporate tenders often mandate submission of past ITRs.

Circumstances Mandating ITR Filing Beyond Income Thresholds

Apart from income levels, certain financial activities make ITR filing compulsory:

Condition	Threshold
Aggregate deposit in one or more savings accounts exceeds	₹50 lakh annually
Deposit in current accounts exceeds	₹1 crore annually
Expenditure on foreign travel exceeds	₹2 lakh annually
Annual electricity bill exceeds	₹1 lakh annually
TDS/TCS deduction exceeds	₹25,000 (₹50,000 for senior citizens)
Professional income exceeds	₹10 lakh annually
Business turnover exceeds	₹60 lakh annually
Ownership or signing authority in foreign assets or accounts	Any value

Timelines and Availability of TDS and Other Information on Income Tax Portal

While the due date for filing Income Tax Returns for most individuals (non-audit cases) is 31st July 2025 for Assessment Year 2025–26, it is important to note:

• TDS details, Tax Payment records, and Annual Information Statement (AIS) along with Form 26AS are generally fully updated on the Income Tax Portal by around 15th June 2025.

• Taxpayers are advised to verify all TDS credits, advance taxes, and other pre-filled information after 15th June 2025 before proceeding with filing to ensure correctness and avoid mismatches.

• Smooth and accurate filing usually begins post-15th June once all data is populated by deductors and the Income Tax Department.

Early filing after verifying the complete data not only reduces last-minute errors but also facilitates early processing of refunds.

Exemptions from ITR Filing for Senior Citizens under Section 194P

Section 194P of the Income Tax Act, introduced through Budget 2021, provides conditional relief to senior citizens above 75 years of age from filing ITR, subject to:

• Age and Residency: The individual must be over 75 years old and a Resident Indian in the relevant financial year.

• Nature of Income: Only pension income and interest income from the same bank where pension is received.

• Specified Bank Declaration: A declaration must be submitted to the bank, which then computes and deducts the due taxes appropriately.

• Specified Bank Compliance: The bank must be notified by the Central Government for this purpose.

This facility eliminates the need for senior citizens fulfilling the above conditions to file their ITR separately.

Conclusion: Filing ITR as a Pillar of Financial Planning

Filing your Income Tax Return is no longer just a regulatory formality—it has evolved into a critical pillar of prudent financial planning.
Whether or not your income crosses the basic exemption limit, maintaining a clean tax filing record:

• Strengthens your financial credibility,

• Opens doors to better financial products,

• Safeguards you against future penalties and notices.