It is mandatory for individuals, NRIs, partnership firms, LLPs, companies and Trust to file income tax returns each year. Individuals and NRIs are required to file income tax return, if their income exceeds Rs.2.5 lakhs per annum. Proprietorship firms and partnership firms are required income tax return - irrespective of amount of income or loss. All companies and LLPs are mandatorily required to file income tax return, irrespective of turnover or profit.

Taxpayers who do not file their income tax return on time are subject to penalty and charged an interest on the late payment of income tax. The penalty for late filing income tax return is now as follows: