Spending more than INR 2 Lakhs abroad? File an Income Tax Return

While the Budget 2019 was out of the bag yesterday and was more an incremental budget than a reformist one, like always, the devil lies in the details. One of the interesting details from the Budget 2019 live updates was the focus on international travel as a surrogate for being rich enough to file an income tax return.

Budget 2019 Live Updates

I went back and read the Budget 2019 document again, and it said (bolding mine),

It is proposed to make return filing compulsory for persons, who have deposited more than Rs. 1 crore
in a current account in a year, or who have expended more than Rs. 2 lakh on foreign travel or more than Rs. 1 lakh on electricity consumption in a year or who fulfils the prescribed conditions, in order to ensure that persons who enter into high value transactions also furnish return of income. It is also proposed to provide that a person whose income becomes lower than maximum amount not chargeable to tax due to claim of rollover benefit of capital gains shall also be required to furnish the return

Now, while I know many of our readers already do file their ITRs, this is an interesting update for those who don’t so far, because this will now begin to include backpackers, solo travellers, business travellers and anyone who has a PAN/Aadhaar card and is heading out of India (it could be to Sri Lanka or Switzerland, doesn’t matter).

While the details of this move are not available yet, and I expect it to be wildly complicated when it comes out, if you like exploring the world, perhaps an even better time to start using miles and points to defray the cost of your stay abroad rather than cash. As for me, I anyways file my returns so nothing changed!

What do you make of the new move from the Government of India to make you file your tax returns if you spend more than INR 2 lakh on foreign travel?

 

Comments

  1. If you spend INR 2 lakh+ on foreign trips aboard in a year, chances are that you already have taxable income. So this is a good move.

    In any case, if you want to sign up for credit cards or avail other credit facilities from banks and financial institutions, it is a good idea to file your income tax returns.

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