by Income-tax Act, 2025, applicable to Tax Year 2026–27 onwards, Section 263(1) corresponds broadly to Section 139(1) of the Income-tax Act, 1961 and contains the provisions for filing the original return. For FY 2025–26 / AY 2026–27, the old Act continues to govern the return.
1. Persons Required to File ITR
Under Section 263(1) of the Income-tax Act, 2025, persons meeting the prescribed conditions are required to furnish an Income Tax Return (ITR). The requirement generally applies where the taxpayer’s total income exceeds the basic exemption limit or where specific statutory conditions make filing compulsory. The provision covers different categories of taxpayers, including individuals, companies, firms, and other persons. Therefore, ITR filing is not restricted only to taxpayers who actually have tax payable.
2. Income Exceeding the Basic Exemption Limit
An important basis for compulsory filing is whether the taxpayer’s total income exceeds the maximum amount not chargeable to tax. When taxable income crosses the applicable basic exemption limit, the person is generally required to furnish an ITR within the prescribed time. The applicable threshold depends upon the relevant tax year, taxpayer category, and provisions of the tax law. Taxpayers should therefore consider their total income before determining their filing obligation.
3. Companies and Firms
Companies and firms are generally subject to specific return-filing requirements. Their obligation is not simply dependent on whether their income exceeds the basic exemption limit. The law requires specified entities to furnish a return of income in the prescribed form and within the prescribed time. Consequently, companies and firms should maintain proper books, financial statements, tax records, and supporting documents so that their return can be prepared accurately and filed in accordance with applicable requirements.
4. Filing Based on Specified Conditions
ITR filing can also become compulsory when a taxpayer satisfies certain specified conditions, even if income does not otherwise exceed the basic exemption limit. Such conditions may relate to particular financial transactions, foreign assets or income, expenditure, or other circumstances prescribed under the law. The purpose is to bring specified taxpayers within the tax reporting framework. Therefore, taxpayers should examine both their income level and statutory conditions before deciding whether filing is mandatory.
5. Filing Return for Carry-Forward of Losses
A taxpayer may need to file a return within the prescribed due date when seeking to carry forward certain losses to subsequent tax years. Under the corresponding framework, timely filing is relevant for carrying forward specified losses such as losses from business or profession and capital gains, subject to statutory conditions. The Income Tax Department confirms that filing a loss return within the prescribed due date is a prerequisite for carrying forward specified losses under the new Act.
6. Filing Within the Prescribed Due Date
A person required to file an ITR should submit it within the prescribed due date applicable to that taxpayer. Timely filing helps the taxpayer avoid consequences associated with late filing, including applicable fees and interest. The due date can differ according to the taxpayer’s category and circumstances. For example, certain taxpayers may have different compliance requirements because of business income, audit requirements, or other prescribed conditions.
7. Correct Form and Verification
The taxpayer must furnish the return in the prescribed ITR form, provide the required particulars, and complete the prescribed verification. Different forms apply to different categories of taxpayers and types of income. The return should contain accurate information regarding income, deductions, taxes paid, TDS/TCS, and other relevant particulars. Proper verification confirms the authenticity of the return and forms an important part of the taxpayer’s overall tax compliance responsibility.
8. Consequences of Non-Filing
Failure to furnish a return when it is legally required can result in tax-compliance consequences. Depending on the circumstances, these may include late filing fee, interest, restrictions relating to certain claims, penalties, or other consequences provided under the applicable law. The Income Tax Department states that late filing can attract a prescribed fee and interest where applicable. Therefore, taxpayers should determine their filing obligation carefully and submit the ITR within the prescribed period.
