For the financial year 2019-20, I have earned interest and long-term capital gain. The entire long-term capital gain has been invested in a new residential house under Section 54 of the Income Tax Act and therefore nothing is taxable. After deduction, my total income does not exceed the maximum amount which is chargeable for Income Tax. Therefore, am I supposed to file IT return in view of non-taxable income?
Yes, you are under obligation to file return of income if your total income exceeds the taxable limit before claiming deduction under Section 54 of the Income Tax Act. This has been made very clear under proviso to Section 139(1) of the Income Tax Act. As such please file your return to avoid penalty, interest and prosecution. For your information, under the present law, even if your income is below the taxable limit but if you have deposited more than₹1 crore in any bank account even through cheques or bank transfer or you have incurred expenses exceeding ₹2 lakhs on yourself or any other person for foreign travel or incurred expenses of an amount more than ₹1 lakh towards payment of electricity bill, then you are required to file your return of income under Section 139(1) of the Income Tax Act. This is also clearly mentioned in the 7th proviso to Section 139(1) of the Income Tax Act. Further, you are also required to furnish relevant details in the ITR form.
You can read up to 3 premium stories before you subscribe to Magzter GOLD
Log in, if you are already a subscriber
Get unlimited access to thousands of curated premium stories, newspapers and 5,000+ magazines
READ THE ENTIRE ISSUE
August 03 - 16, 2020