New Delhi, July 3 -- Many taxpayers assume that filing an income tax return (ITR) is necessary only if they have taxable income or an income above the basic exemption limit. As a result, individuals with an annual salary below Rs.4 lakh often believe they can skip filing their return altogether, which is not the case.

The Income-tax Act prescribes several situations where filing an ITR is mandatory regardless of the amount of tax payable. Apart from income, certain high-value financial transactions and specified reporting requirements can also trigger the obligation to file a return. Failing to do so in such cases could attract notices, penalties, or other compliance issues.

The Income-tax rules also mandate ITR filing for individuals w...