No taxable income? You may still have to file a return in these scenarios.

Mint

9 hours ago

One question that always comes up during tax season is: 'Do I need to file a return if my income is below the basic exemption limit?"
At first glance the answer seems obvious. No taxable income, no return. But India's Income tax Act doesn't look at things through the 'income earned" lens alone. And frankly, that makes sense.
Think about that one friend on Instagram whose weekdays are a blur of exotic vacations. When you meet them in person, they complain: 'Buddy, I'm broke." Yet they're somehow sipping sangria in Spain and Seychelles every other week. Wondering how the math works? So is the taxman.
Not having taxable income doesn't automatically mean you're off the hook. The law looks at how you live, spend, and save—not just how you earn. That's why it says: even if there's no taxable income, certain people must still file a return. It's the government's way of keeping track of big financial moves, opulent lifestyles, and transactions that would otherwise have slipped through the cracks.
The basic rule
Companies, limited liability partnerships (LLPs) and partnership firms have no escape—they must file returns every year, even if they have zero income or losses.
For individuals and others, Section 139(1) of the Act requires you to file a return if your gross total income (before deductions under sections 80C, 80D, etc) exceeds the 'maximum amount not chargeable to tax".
This the part that trips people up: is that ₹2.5 lakh (old regime) or ₹3 lakh (new regime)?
Earlier, the limit was ₹2.5 lakh ( ₹3 lakh for senior citizens, ₹5 lakh for super-seniors). But now the new regime under Section 115BAC has become the default, with a basic exemption of ₹3 lakh.
So the trigger can be said to be ₹3 lakh, not ₹2.5 lakh. And it doesn't matter which regime you eventually pick—the law looks at the 'maximum amount not chargeable to tax" under the Finance Act, which is ₹3 lakh.
That said, many professionals still advise filing a return if your income crosses ₹2.5 lakh to avoid disputes and build a clean record.
That's the simple part. Now let's get into some lesser-known but equally important triggers.
Hidden triggers
Even if your income is below taxable limits, you are required to file a return if you cross certain thresholds or perform certain transactions.
You must file a return if in these situations:
Why does the government do this?
This may all sound cumbersome, but it's not about troubling the small guy. It's about gathering data and keeping tabs on large money flows. If someone deposits crores in current accounts or spends lakhs abroad, the tax department wants a paper trail, even if the person technically owes no tax.
Why you should consider filing voluntarily
Even if you are not required to file a tax return, doing so can strengthen your financial profile, speed up loan and visa approvals, ensure refunds are processed smoothly, and act as a shield in case the taxman comes knocking later. Think of it as your annual financial report card.
Vijaykumar Puri is a chartered accountant and partner at VPRP & Co LLP, Chartered Accountants.