The process of filing income tax returns for the financial year 2024-25 has started. For the assessment year 2025-26, the Income Tax Department has released ITR-1 and ITR-4 forms, which are for those with annual income up to ₹ 50 lakh.
In such a situation, it is important for taxpayers to understand the important sections of the Income Tax Act, 1961 which help in getting tax exemption and correct tax calculation.
Section 139(1): Mandatory to file ITR if income exceeds prescribed limit
Under Section 139(1), it is mandatory for any person or entity to file income tax returns if their annual income exceeds a prescribed limit. This section also applies in cases where the return is filed voluntarily.
Section 10(13A): HRA exemption on rented house
If a person lives in a rented house and pays rent of more than ₹ 1 lakh annually, he can avail tax exemption on House Rent Allowance (HRA) under section 10(13A). For this, some rules have to be followed.
Section 80C: Deduction up to ₹1.5 lakh on tax saving investments
Taxpayers following the old tax regime are eligible to get a deduction of up to ₹1.5 lakh on investments such as PPF, EPF, ELSS, tax saving FD, and life insurance premium under section 80C. However, this exemption is not available in the new tax regime.
The new system allows deduction of up to 10% of employer’s contribution to NPS only under section 80CCD(2). Apart from this, deduction can be claimed on certain expenses under sections 80JJAA and 80CCH.
Section 80D: Deduction up to ₹1 lakh on health insurance
Tax exemption on premiums paid on health insurance is available under section 80D. If the taxpayer and his family members are below 60 years of age, the maximum exemption is up to ₹25,000. For those aged 60 years or above, the limit is ₹50,000. There is a separate exemption for parents, which can take the total exemption to ₹1 lakh.
Section 24B: Home loan interest deduction up to ₹2 lakh
Interest paid on home loan or home improvement loan is eligible for deduction up to a maximum of ₹2 lakh under section 24B. This deduction is available in both the old and new tax regimes.
Section 234F: Penalty for late filing of ITR
If a person files ITR after the due date, then a penalty is imposed on him under section 234F. For those with income less than ₹5 lakh, this penalty is ₹1,000, while for those with income more than ₹5 lakh, the penalty can be up to ₹5,000. Apart from this, interest may also have to be paid under sections 234A and 234B.
Know from the experts who are required to file ITR? (Applicable only to individual taxpayers)
According to tax expert Balwant Jain, under various provisions of the Income Tax Act, it becomes mandatory for individual taxpayers to file ITR in certain situations, even if their total income does not fall under the scope of tax liability. Let us know in which cases it is necessary to file ITR:
1. Gross income exceeds the basic exemption limit
It is mandatory to file ITR if your total income (before deductions under sections 80C, 80D, 80G, etc.) exceeds the following limits:
General individual: ₹2.5 lakh
Residents above 60 years of age: ₹3 lakh
Residents above 80 years of age: ₹5 lakh
Equal exemption for all in new tax regime: ₹3 lakh
Long term capital gains (LTCG) will also be added to this.
2. Have property or signature authority abroad
If you are a resident taxpayer in India and:
You have any property in your name abroad (even if there is no balance amount)
If you have a foreign bank account or share in a property or have signature authority, it
is mandatory for you to file ITR.
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