Are You Sure You’re Exempt from Filing Your ITR? Discover How Your Lifestyle Might Tell a Different Story!

Many people think that if their annual income is below a certain level, they don’t need to file an Income Tax Return (ITR). However, tax compliance goes beyond just income. Ashish Singhal, co-founder of CoinSwitch and Lemonn, pointed this out in a recent post on LinkedIn.

He emphasized that even if you show zero taxable income, you might still need to file an ITR based on your spending habits. For instance, spending more than Rs 2 lakh on a foreign vacation or having an annual electricity bill that exceeds Rs 1 lakh could trigger a filing requirement. Large bank deposits can also raise eyebrows—even if you don’t have a formal income.

The reason is simple: if you spend like you have a taxable income, the tax department will want to know more about your financial activities.

As the deadline for filing ITR for the financial year 2025–26 approaches—now extended to September 15—this reminder is timely. Many professionals and freelancers, in particular, might unknowingly meet the filing criteria due to their lifestyle choices. Singhal advises everyone to keep an eye on their expenses to avoid any unexpected tax issues.

Interestingly, this situation reflects broader trends in tax compliance, as various countries adapt their tax regulations to better capture individuals who may not fit neatly into traditional income brackets. For example, a recent survey revealed that 45% of self-employed individuals are unaware of their tax obligations, highlighting a gap that needs to be addressed.

In short, it’s vital to stay informed about tax rules and how they relate to your lifestyle, even if you think you’re not earning much. Understanding these nuances can save you from unnecessary hassles down the road.



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