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CA Intermediate · Taxation · Provisions for filing Return of Income and Self Assessment

Kavita Nair, a resident individual and a salaried employee, has a total income of Rs 3,00,000 for the tax year 2026-27, which is below the basic exemption limit. During the year she deposited Rs 1,20,00,000 in aggregate in a current account held in her name for a family venture, and she has no other transactions that would trigger a filing requirement. Which statement is correct?

Kavita must file a return. Although her income is below the basic exemption limit, filing is compulsory where the aggregate deposits in one or more current accounts in the year amount to Rs 1 crore or more. Her deposits of Rs 1.2 crore cross this threshold, and the mode of deposit does not matter.

  1. AShe need not file a return because her income is below the basic exemption limit
  2. BShe must file a return because aggregate deposits in current accounts are Rs 1 crore or moreCorrect
  3. CShe must file a return only if the deposits were made in cash
  4. DShe may file a return only if she wants to claim a refund

Explanation

The obligation to file for an individual is not limited to income above the basic exemption limit. A return is also compulsory where aggregate deposits in one or more current accounts during the year are Rs 1 crore or more, whatever the mode of deposit and whatever the income. Kavita's deposits of Rs 1.2 crore meet this condition.

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