If you have salary below ₹12 lakh, do you need to file income tax return (ITR)?

With the Union Budget 2025-26 raising the tax-free income limit to ₹12 lakh under the new tax regime, many salaried individuals earning less than ₹12 lakh are wondering whether they still need to file their Income Tax Return (ITR).

However, they must still file their ITR if their income exceeds the basic exemption limit of ₹4 lakh.

Even if no tax is payable, filing an ITR is recommended for individuals to:

• Claim tax refunds in case of excess TDS deductions.
• Maintain a financial record for loan applications or visa processing.
• Carry forward losses for future tax benefits.
• Avoid notices from the Income Tax Department in case of high-value transactions.

Taxpayers earning below ₹12 lakh but having capital gains, foreign income, or business income may also have separate tax obligations.

The new tax regime was introduced in FY 2020-21. Taxpayers can choose between the old and new tax regimes. However, the new tax regime has become the default regime from FY 2023-24. It offers no tax deductions but lower tax rates for different slabs. In contrast, the old regime offered multiple deductions and exemptions under various sections of the Income Tax Act, 1961 but higher tax rates.