Income Tax Alert: Even with Low Income, You May Still Need to File ITR – Know the Situations That Can Trigger a Notice

Income Tax Return (ITR) Filing 2025: The ITR filing season is in full swing, with over 1.23 crore taxpayers already having submitted their returns. While the deadline to file your ITR this year is September 15, 2025, many individuals believe that if their annual income is below the exemption limit, they don’t need to file. But experts warn: in several specific scenarios, even low-income individuals are required to file an income tax return — failing which, the Income Tax Department may send you a notice.

When Is ITR Filing Mandatory – Even with Low Income?

According to the Income Tax Act, 1961, not everyone with low or exempt income can skip filing a return. In fact, the law mandates compulsory ITR filing in certain financial situations, regardless of your income bracket. If you ignore these, you may receive a compliance notice asking why the return was not filed.

Here Are the Scenarios Where ITR Filing Becomes Compulsory:

Even if your annual income is below ₹2.5 lakh (old regime) or below ₹3 lakh (new tax regime), you still must file an ITR if you fall under any of these categories:

Aggregate deposit of ₹50 lakh or more in savings bank accounts.

Deposits exceeding ₹1 crore in current accounts during the financial year.

Annual turnover above ₹60 lakh in case of business.

Professional income exceeding ₹10 lakh.

Electricity bill payments exceeding ₹1 lakh during the year.

Total TDS/TCS deduction above ₹25,000 (₹50,000 for senior citizens).

Foreign income or ownership of assets abroad.

Foreign travel expenses exceeding ₹2 lakh.

In these situations, filing ITR is not optional, regardless of income.

Why Filing ITR Even with Low Income Makes Sense

Experts say that even if you’re not legally required to file an ITR, doing so offers significant benefits:

• Loan Applications: Financial institutions often ask for ITR copies when you apply for a home loan, car loan, or personal loan.

• Proof of Income: ITR is considered one of the most credible proofs of income by banks, visa authorities, and government agencies.

• Avoid Future Scrutiny: Filing timely returns builds a clean tax record and reduces the chances of notices or verification issues later.

Filing ITR Is Now Easier Than Ever

The Income Tax Department has made ITR filing a completely online and user-friendly process. If your income sources are simple (like salary or pension), you can file ITR using the ITR-1 form directly from the official income tax portal.

Here’s what you’ll need:

• A valid PAN number

• Form 16 issued by your employer (for salaried individuals)

• Basic personal and financial information

• Bank account details for refund purposes

This online facility allows taxpayers to file returns from the comfort of home without professional help (unless your case is complex).

Don’t Wait Until the Last Minute

Although the deadline for ITR filing is 15 September 2025, tax experts recommend filing early:

• Faster refunds

• More time to correct errors

• Avoiding last-minute portal traffic and server issues

Consequences of Not Filing When Required

If you don’t file ITR despite meeting any of the mandatory filing conditions:

• You may receive a compliance notice from the Income Tax Department.

• You might face penalties or scrutiny, especially if high-value transactions are reported in your name.

• Delayed filing may also result in loss of interest on tax refunds.

Final Word: Stay Compliant and Proactive

Filing your income tax return is not just a legal formality — it’s an important financial discipline. Whether or not you cross the exemption limit, always evaluate your transactions and financial activities. If you match any of the above criteria, file your ITR without delay.