Every individual or entity whose income exceeds the prescribed exemption limit must file an income tax
return under Section 139. Non-compliance attracts penalties under Sections 234F and 271F, and may also
result in prosecution under Section 276CC.

Under the Income Tax Act, 1961, every individual or entity classified as a taxpayer has certain legal obligations, and these are binding in nature. The primary legal obligations of a taxpayer include:

1. Filing of Income Tax Return (ITR):
Every person whose total income during a financial year exceeds the basic exemption limit (as prescribed under the Act) is legally required to file an income tax return within the due date. Non-filing or late filing attracts interest, penalties, and in certain cases, prosecution.


2. Accurate Disclosure of Income:
It is the legal duty of the taxpayer to correctly and fully disclose all sources of income — whether from salary, house property, business or profession, capital gains, or other sources.


3. Payment of Tax Dues:
Taxpayers are obligated to compute their tax liability as per applicable rates and pay taxes accordingly. This includes advance tax payments, self-assessment tax, and taxes deducted at source (TDS).


4. Maintaining Books of Account:
Certain professionals, businesses, or entities are required to maintain regular books of account as prescribed under Section 44AA and to get them audited under Section 44AB, if applicable.


5. Responding to Notices and Inquiries:
If the Income Tax Department issues any notice (under Sections like 142(1), 143(2), 148, etc.), the taxpayer is legally bound to respond and cooperate with the assessment or inquiry proceedings.


6. Deduction and Deposit of TDS:
If a person is liable to deduct tax at source (e.g., an employer paying salary, a business paying contractors), they must deduct and deposit TDS within the prescribed time limits and file TDS returns.


7. Compliance with Tax Laws:
A taxpayer must comply with all applicable provisions, rules, and notifications under the Act, and avoid acts of tax evasion, concealment of income, or false statements.



Failure to meet these obligations can result in penalties, interest, prosecution, and in serious cases, imprisonment under Chapter XXII of the Income Tax Act.

Hence, every taxpayer has a legal and moral duty to contribute their due share to the exchequer and abide by the provisions of the Income Tax Act, 1961.