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Under the new income tax regime, a standard deduction of Rs 75,000 is also available
Tax experts say that tax return filing obligations are based on income level and not on the tax liability. (Representative image)
In a major relief to the common man, Union Finance Minister Nirmala Sitharaman on Saturday announced that people with incomes of up to Rs 12 lakh will not have to pay a single rupee in income tax.
Finance Minister Sitharaman presented her eighth consecutive Union Budget on Saturday, bringing joy to the middle class.
“To taxpayers with up to Rs 12 lakh of normal income (excluding special rate income such as capital gains), a tax rebate is being provided in addition to the benefit from slab rate reductions, ensuring that no tax is payable by them,” FM Sitharaman said in her Budget speech.
Further, under the new income tax regime, a standard deduction of Rs 75,000 is also available. With the introduction of this change, salaried individuals with an annual income of up to Rs 12.75 lakh will have zero tax liability under the new tax regime.
But will they, along with others with no tax liability, be required to file an income tax return (ITR)?
ITR filing is mandatory for individuals whose income exceeds the basic exemption limit, which is Rs 2.5 lakh under the old tax regime and Rs 4 lakh under the new tax regime.
Furthermore, tax experts say that tax return filing obligations are based on income level and not on the tax liability. In other words, even if a taxpayer’s liability comes down to zero due to rebates or deductions, they must file an ITR, reflecting their zero tax liability.
Filing ITR helps in maintaining a clean financial record and can be beneficial in securing loans, visas, or other financial services.
