Income tax return 2025: Who is required to file ITR?

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Not everybody who receives income in India needs to file an Income Tax Return (ITR), but a few individuals are either required to or benefit a lot by filing one. Reporting your ITR is not just a legal necessity in most situations, but it will also be useful in claiming refunds, bringing forward losses, and creating a financial history. The following is an analysis of who is required to file an ITR for Assessment Year 2025–26, depending on income and other factors.

What is the minimum income threshold for reporting ITR?

If your gross total income is above the basic exemption limit, you have to file an ITR. For FY 2024-25, the limit under the old tax regime will be ₹2.5 lakh for age below 60, ₹3 lakh for senior citizens (60-79 years), and ₹5 lakh for 80 years and more. In the new regime, the basic exemption is ₹3 lakh for all. You must file once such thresholds are attained, even if you have no tax owing after deductions.

What if you receive income from foreign or capital gain sources?

ITR filing is mandatory if you earn any capital gains income, regardless of the amount, especially short-term or long-term capital gain on shares, property, or mutual funds. You are also required to file in case you are a resident and ordinary Indian with foreign assets or bank accounts or if you earn income in India from abroad. Even if your total income is below the exemption limit, this is compulsory.

Do you have to file ITR to claim a refund or carry forward a loss?

Yes. From the deduction of TDS on your income—on interest on fixed deposits or dividends, for example—if your total income is below taxable ceilings, only through filing ITR can you claim a refund. Similarly, if you incur business or capital losses and wish to carry them forward and utilize them to offset the profits that you earn in the future, it is compulsory to report them in your return filed within the due date. Failing that, you lose the right to modify these losses subsequently.

If you fall under the compulsion to file provisions?

The Income Tax Act stipulates some other conditions which make it compulsory to file ITR. These are if you have deposited over ₹1 crore in a bank account, spent more than ₹2 lakh on foreign travel, or paid electricity bills above ₹1 lakh within a year. Even if you earn below the exempted limit, if you cross any of these limits, you will need to file. Similarly, if you are a company director, an unlisted shareholder, or an NRI earning in India, you too must file a return.

Which ITR form do I use?

The appropriate ITR form depends on the nature of your income. ITR-1 (Sahaj) is for salaried people with total income up to ₹50 lakh and no capital gains or foreign assets. ITR-2 is for those who have capital gains or foreign income but no business income. Professionals and business individuals require ITR-3, and those adopting the presumptive taxation system should fill out ITR-4 (Sugam). Choosing the inappropriate form can make the return defective.

Voluntary filing has its benefits

Even if your income is below the taxable limit, filing ITR builds your financial record. It helps when applying for loans, visas, or government schemes. It also avoids issues if your PAN is flagged for transactions like mutual fund purchases or credit card use. Filing voluntarily ensures you’re not questioned later for not reporting income, even if it was exempt.