Most taxpayers associate return (ITR) filing with one simple rule: if income exceeds the prescribed exemption limit, a return must be filed. But the Income Tax Act casts a wider net.
In several cases, taxpayers may be required to file an ITR even when their income is below the basic exemption limit. The obligation can arise because of foreign asset ownership, high-value banking transactions, overseas travel, business activity or other specified conditions.
As the filing season for Assessment Year (AY) 2026-27 gathers pace, taxpayers should be aware of these lesser-known requirements. The mandatory filing provisions arise from Section 139(1) of the Income Tax Act and the prescribed conditions notified by the government.
Here are nine situations where filing an income tax return is compulsory.
1. You own a foreign asset
A resident individual is required to file an ITR if he or she:
- Owns an asset located outside India
- Has a financial interest in an overseas entity
- Is a beneficiary of a foreign asset
- Has signing authority in a foreign bank account
This provision has become increasingly relevant as more Indians invest in , foreign exchange-traded funds (ETFs) and other overseas assets.
2. You spent more than ₹2 lakh on foreign travel
Return filing becomes mandatory if an individual incurs expenditure exceeding ₹2 lakh on foreign travel for themselves or any other person during the financial year.
The condition applies irrespective of whether tax is ultimately payable and is intended to capture specified high-value transactions.
3. TDS or TCS crossed the prescribed threshold
Many taxpayers may not realise that the amount of tax deducted or collected during the year can itself create a filing requirement.
An ITR must be filed if aggregate(TDS) and tax collected at source (TCS) exceeds:
- ₹25,000 for most taxpayers
- ₹50,000 for senior citizens
This often affects fixed deposit investors, professionals, consultants and individuals receiving payments subject to tax deduction.
4. Deposits in savings accounts exceeded ₹50 lakh
Individuals who deposit more than ₹50 lakh in one or more savings bank accounts during the financial year are required to file an income tax return.
The provision forms part of the government’s framework for tracking high-value financial transactions.
5. Deposits in current accounts exceeded ₹1 crore
ITR filing is mandatory if the aggregate amount deposited in one or more current accounts exceeds ₹1 crore during the financial year.
The requirement applies regardless of whether the taxpayer ultimately has a tax liability.
6. Business turnover crossed ₹60 lakh
Individuals carrying on business must file a return if their total sales, turnover or gross receipts exceed ₹60 lakh during the financial year.
The threshold is linked to turnover rather than profits. As a result, filing may be mandatory even where the business reports limited taxable income.
7. Professional receipts exceeded ₹10 lakh
Professionals such as doctors, lawyers, architects, consultants, freelancers and other self-employed individuals must file an ITR if their gross professional receipts exceed ₹10 lakh during the financial year.
The threshold is based on gross receipts and not net earnings.
8. Electricity bills exceeded ₹1 lakh
Taxpayers whose expenditure on electricity consumption exceeds ₹1 lakh during the financial year are also required to file an income tax return.
Though relatively less discussed, this remains one of the specified mandatory filing conditions.
9. Your income exceeded the exemption limit before deductions
While the above situations are less widely known, the most common filing requirement remains income exceeding the prescribed exemption limit.
Importantly, the calculation is based on income before claiming specified deductions and exemptions, including deductions under to 80U and certain capital gains exemptions.
For AY 2026-27, the basic exemption limit under the new tax regime is ₹4 lakh. Under the old tax regime, the exemption limit is ₹2.5 lakh for individuals below 60 years of age, ₹3 lakh for senior citizens aged 60-79 years and ₹5 lakh for super senior citizens aged 80 years and above.
At a glance: When ITR filing becomes mandatory
|
Situation |
Threshold |
| Foreign assets or financial interest abroad (resident individuals) | Any amount |
| Foreign travel expenditure | Above ₹2 lakh |
| TDS/TCS during the year | ₹25,000 ( ₹50,000 for senior citizens) |
| Deposits in savings accounts | Above ₹50 lakh |
| Deposits in current accounts | Above ₹1 crore |
| Business turnover | Above ₹60 lakh |
| Professional receipts | Above ₹10 lakh |
| Electricity consumption expenditure | Above ₹1 lakh |
| Income before specified deductions and exemptions | Above the applicable basic exemption limit |
| Source: Income Tax Department website | |
For many taxpayers, the decision to file an ITR is not determined solely by income. The tax law also takes into account foreign assets, high-value transactions, business activity and spending patterns while determining whether return filing is mandatory.
Before deciding to skip ITR filing for AY 2026-27, taxpayers should review these conditions carefully. Even where the final tax liability is nil, a return may still be legally required.