Why is IT Filing Mandatory in India

Why is IT Filing Mandatory in India



E-filing or electronic filing is the process of submitting tax returns over the internet using a pre-approved software program. This system has become increasingly popular due to its many benefits. Some of these include: the ability to file tax returns from anywhere, a simple filing process and the ability to file multiple returns at one time. This is especially useful for self-employed individuals who do not receive a Form 16 from their employers.

The Income Tax Department makes e-filing mandatory for companies with turnovers of more than Rs 1 crore and for professionals whose income is more than Rs 25 lakh. It is also compulsory for individuals whose gross receipts exceed Rs 50 lakh in savings bank accounts, individuals who have deposited more than Rs 2 lakh in foreign currency in their banks, and those who have incurred expenses exceeding Rs two lakh for overseas travel.

However, for NRIs, it is not mandatory to file tax returns unless they earn or accrue income tax department in India that exceeds the basic exemption limit (Rs 2.5 lakh for individuals below 60 years, and Rs 3 lakh for senior citizens). It is also compulsory to file tax returns by Indian residents acting as signing authority for a foreign account, and those who possess assets or financial interest entities located outside India.

Once a tax return is filed, it must be verified in order to prevent any errors. This can be done online through the use of an EVC or Aadhaar OTP, or by sending a signed copy of the ITR-V form to the CPC office in Bengaluru.


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