Income tax: Old & new regimes

Not all tax payers are sure whether income tax return has to be filed even in cases where tax computation may be zero.

- Chander Gupta

The answer is simple. If your income exceeds the basic exemption limit, you must file income tax return. The basic exemption limit under the New Tax Regime (Default), for the financial year 2025-26 (Assessment Year 2026-27) is Rs 4 lakhs for all individual taxpayers, regardless of age (including Hindu Undivided Family). If your income exceeds Rs 4 lakh, you must file income tax return even if tax liability comes to nil after application of exemptions, deductions, and rebate.

A rebate of up to Rs 60,000 under section 87A is available for resident individuals with taxable income up to Rs 12 lakh. With a standard deduction of Rs 75,000, the effective tax-free income threshold for salaried taxpayers is Rs 12.75 lakh. However, even if the tax liability comes to zero on account of rebate and deductions, an individual must file IT return if the income exceeds the basic exemption limit of Rs 4 lakh under the new tax regime.