Income Below Rs 4 Lakh? One Mistake Could Cost You—Check If You Must File ITR

Even as the ITR filing deadline for AY 2026-2027 approaches, taxpayers must be aware of specific conditions that mandate filing a return despite having an income below the exemption limit. These conditions, under Section 139(1), include depositing over Rs 1 crore in current accounts, spending over Rs 2 lakh on foreign travel.

Taxpayers are rapidly filing their income tax returns even as the AY 2026–2027 ITR filing deadline draws near. For the assessment year 2026–2027, over 3 crore ITRs have been filed thus far; on July 21 alone, over 15 lakh returns were filed. The deadline for filing ITR-1 and ITR-2 is July 31. In addition to income levels, be aware of the following circumstances that require taxpayers to submit an ITR.

“3 Crore + ITRs have already been filed for A.Y 2026-27, with 15 Lakh+ ITRs filed yesterday alone! Don’t wait for the deadline rush! File your ITR 1 & 2 for A.Y 2026-27 before July 31, 2026 at http://incometax.gov.in," said Income Tax India in a post on X on Wednesday, July 22.

Generally, filing ITR is mandatory if your an annual income exceeds income tax exemption limit — Rs 4 lakh under the new tax regime and Rs 2.5 lakh under the old regime.

When Is ITR Filing Mandatory Despite Low Income?

Even if a person's total income is less than the basic exemption level, they are nevertheless required under the Income Tax Act of 1961 to submit an ITR if they satisfy any of the requirements listed under Section 139(1).

Deposits Above Rs 1 Crore In Current Accounts

If a person deposits more than Rs 1 crore in one or more current accounts kept with a bank or cooperative bank throughout the fiscal year, they must file an ITR. The purpose of this clause is to include high-value banking transactions in the framework for tax reporting.

Foreign Travel Expenses Exceed Rs 2 Lakh

If an individual spends more than Rs 2 lakh on travel abroad for himself or another person during the fiscal year, they are required to file an ITR. Travel packages, airline tickets, and other permissible international travel expenditures as specified by the regulations may be included in the spending.

Electricity Bill Above Rs 1 Lakh

Regardless of overall income, submitting an income tax return becomes mandatory if an individual's yearly energy usage results in bills surpassing Rs 1 lakh during the fiscal year. The purpose of the clause is to find people who have notable spending habits.

Foreign Assets

Even if their income is below the taxable limit, residents who own any assets outside of India, have a financial stake in a foreign company, or have signing power in any international bank account are usually obliged to file an income tax return. The framework for disclosing foreign assets in India includes this disclosure obligation.

There are a number of advantages to filing an income tax return, even if it is not required by law. It helps get visas, allows taxpayers to claim refunds of excess TDS, and permits qualified taxpayers to carry over some losses to future years. It also acts as evidence of income when applying for house, personal, or car loans.