Income Tax Returns: Why You Must File ITR Even If Your Income Is Below ₹12 Lakh

With the ITR deadline for FY 2024-25 (April 2024-March 2025) set for September 15, there is confusion among taxpayers about who must file. Many believe that because the government has announced a rebate up to Rs 12 lakh in the recent Budget, those earning below that amount need not file. Experts are strongly warning that this is incorrect.

The Budget 2025 introduced a rebate for incomes up to ₹12 lakh. However, this rebate will apply from FY 2025-26 onwards. For the current year (FY 2024-25), the limit for rebate remains at ₹7 lakh.

If your income for FY 2024-25 exceeds ₹3 lakh, then filing ITR is mandatory. The rebate does not remove this requirement.

Missed Filing ITR? Penalties & Notices

Missing the ITR filing deadline can attract penalties up to ₹5,000, possible chaos with notices from the Income‐Tax Department. Not filing on time can also lead to unnecessary stress and complications later on.

Even if one’s income is low, ITR filing helps in establishing proof of income which is often needed for loan approvals, credit card applications, or for applying for other financial or government services.

Financial planners have warned that information circulating online suggesting that those earning under Rs 12 lakh are exempt is “dangerously incorrect.”

Individuals have been advised to gather all necessary documents such as Form 16, bank statements, other income proofs to complete filings through the official Income Tax portal, or use a chartered accountant if needed.

Even though the Rs 12 lakh rebate announced in Budget 2025 might give the impression of a higher exemption, the legal requirement to file an ITR for FY 2024-25 started well before that, at the Rs 3 lakh income threshold.

Individuals might face penalties, their financial credibility could be impacted and they could even have future difficulties with loans, schemes, or other formal processes if they don’t file ITR when required.

Financial advisers highlight that staying compliant avoids risk and keeps your financial record clean.