The government has made income tax return filing mandatory for high spenders even if their taxable income is below the threshold exemption limit of Rs 5 lakh.
Those mandated to file returns include people spending more than Rs 2 lakh on a foreign trip or depositing Rs 1 crore in a year in a bank account or paying electricity bill of more than Rs 1 lakh in a year.
"Currently, a person other than a company or a firm is required to furnish the return of income only if his total income exceeds the maximum amount not chargeable to tax, subject to certain exceptions. Therefore, a person entering into certain high-value transactions is not necessarily required to furnish his return of income," the Budget documents said.
It proposed to amend section 139 of the Income Tax Act to ensure that persons who enter into certain high-value transactions have to furnish their return of income.
So, any person who has in the previous year "deposited an amount or aggregate of the amounts exceeding Rs one crore in one or more current account maintained with a banking company or a co-operative bank; or has incurred expenditure of an amount or aggregate of the amounts exceeding Rs two lakh for himself or any other person for travel to a foreign country; or has incurred expenditure of an amount or aggregate of the amounts exceeding Rs one lakh towards consumption of electricity" will have to file a tax return.
Also, any person claiming the benefits of tax exemption from long term capital gains under various provisions under section 54 of the Income Tax Act will have to file a tax return.
"Further, currently, a person claiming rollover benefit of exemption from capital gains tax on investment in specified assets like house, bonds etc, is not required to furnish a return of income, if, after claim of such rollover benefits, his total income is not more than the maximum amount not chargeable to tax.
"In order to make furnishing of return compulsory for such persons, it is proposed to amend the sixth proviso to section 139 of the Act to provide that a person who is claiming such rollover benefits on investment in a house or a bond or other assets, shall necessarily be required to furnish a return, if, before claim of the rollover benefits, his total income is more than the maximum amount not chargeable to tax," it said.