filing of return of income having below taxable income.

pkpworld.. (Querist) 04 November 2009 This query is : Resolved
Every perosn whose income is exceeding income which is not chargeable to tax in any assessment year is required to fild a return of income.

Can a person having income below taxable inocme (i.e.120,000 for AY 2009-10)file a return in income tax office?

The receiving officer had refused to accept return of income having below taxable income. One person having taxable inocme of Rs.120,000 p.a. for AY 2009-10 wanted to file his retrun income for the purpose of taking a loan from a bank. The bank had asked to assessee for acknowledgement of filing of return. Without such document bank will not sanction loan.

The assessee had approched to the income tax officer but he had expained the section 139(1) and said he will not receive the return because of below taxable income.

The bank also refused to give loan whihout evidence of filing of return.

What to do in this circumsatances?

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Raj Kumar Makkad (Expert) 04 November 2009
The acction of ITO is justified under section 139 (1) of IT Act but your problem is bank loan. Better file a return showing income above the permitted limit and avail various deductions available under variou sections and in such case you shall not only make compliance of IT Act but also bank's requirement.

Vineet (Expert) 04 November 2009
The action of ITO is not justified at all. Any person having a valid PAN can file return of income irrespective of income being below or above taxable income. Section 139 only makes it mandatory for persons having taxable income to file their return but it does not bar persons having no taxable income or income below taxable income from filing return. Otherwise, how somebody having loss return will be able to file.

You can take up the matter with higher authorities who will pass suitable directions to the ITO. Alternatively, you can file your return online which is a more convenient way.

Arul Kumar (Expert) 04 November 2009
Mr. Vineet is right. A person below the taxable income can file a NIL return. It is a legal compliance as a PAN card holder.

Vineet (Expert) 04 November 2009
Thanks Mr Arul, I would like to clarify that filing return is not legally mandatory for every PAN holder. It is mandatory only for persons specified u/s 139(1).