ITR Filing Rules: Now, Income tax filing made mandatory if TDS, TCS amount exceeds Rs 25000 in year (2025)

CBDT Income Tax Notification 37/2022 dt. 21/04/2022: Rule 12AB on conditions for Mandatory filing of Tax Return (ITR)

Income-tax (Ninth Amendment) Rules, 2022

What is Rule 12AB?

It rules out additional condition which if satisfied, the person has to file Income tax return

For whom is Rule 12AB applicable?

Rule 12AB is applicable for any person other than a company or a firm whose total income is below basic exemption limit and therefore were not required to file income tax return till now before this notification. For individuals who are not senior citizens or super senior citizens, the basic exemption limit is Rs. 250000.

What conditions if satisfied, persons have to file income tax return, even if they are earning below basic exemption limit?

If the person is carrying on a Business, then if total sales, turnover or gross receipts exceeds sixty lakh rupees during the previous year, the person must file income tax return even if his calculated total income is below the basic exemption limit.

If the person is carrying on profession, if his total gross receipts exceed ten lakh rupees during the previous year, then he must file income tax return despite his low total income.

Any person (whether or not he is doing business or profession, other than company and firm) if the aggregate of tax deducted at source and tax collected at source during the previous year, in the case of the person, is twenty-five thousand rupees or more, he has to file income tax return despite his total income being less than the basic exemption limit.

If a person has deposited money in one or more savings bank account of the person, in aggregate, and the amount is rupees fifty lakh or more during the previous year, then he must file return even if his total income is less than the non-taxable limit. Please note that the amount of 50 lakh is to be looked in total of all the savings account that person owns. You can ignore current account deposits.

Special situation

In the case of an individual resident in India who is of the age of sixty years or more, at any time during the relevant previous year, the TDS and TCS condition will have amount fifty thousand as threshold to fall under mandatory filing of returns.

A few questions that come out of this are as follows.

Amount deposited –Does it mean only cash deposited by assessee into his account or does it mean holding more than 50 lakhs at any point in time.

The word as a verb means “to place for safekeeping or in trust”. Going by this, if the total credit in all your savings account added together during the year exceeds the amount of Rs. 50 lakh or more, then that person becomes mandated to file return of income despite his total income being less than the basic exemption limit.

What were the earlier rules?

It may be noted that earlier the seventh proviso to IT Section 139 was inserted vide Finance Act, 2019, which has laid down certain criteria for mandatory filing of tax return (ITR) even if Individual’s income is not exceeding the basic exemption limit, which includes deposits of Rs. 1 crore or more in current account, foreign travel expense exceeding Rs. 2 lacs, electricity consumption exceeding Rs. 1 lac during the previous year.

Are these rules in addition to the previous conditions?

Yes. These are in addition to the previous conditions of filing of return.

From which date is the notification applicable?

April 21, 2022.

Article by CA Siddarth Krishnan V. Please contact author at siddarth@vja.net.in in case of any doubts.