How to file NIL Income Tax Return?

nil income tax return

A nil income tax return is submitted to the Income Tax Department to demonstrate that you have no taxable income and, as a result, paid no taxes for the year. A Nil ITR that has been filed especially to inform the Income Tax authorities that no taxes have been paid for the relevant financial year. When the income is below income tax nil return limit or when a refund results in a tax liability of zero then only nil ITR can be filed.

What is NIL ITR Return?

An individual taxpayer’s tax burden is nil if their annual income is less income tax nil return limit of 2.5 Lakh; as a result, they are not required to pay any income tax. Since they are not subject to the tax, they are not required to file an income tax return for nil income but it is advisable to do ITR filing for nil return. However, it is referred to as a “Nil Return” if they still file ITR even though their income is below income tax nil return limit. There are several benefits of filing nil itr, even though it is not required.

When do I need to File NIL ITR?

  1. File NIL ITR when you’re just getting started, and while your total revenue is below the taxable threshold, you’d still like to keep records. When applying for a visa or acquiring a passport, for instance, income tax can be used as proof in a number of different circumstances.
  2. You have been filing income tax returns for many years, but this year you were below the taxable limit. So Nil ITR filing is done to keep a record going and as a precaution in case the Income Tax Department looks into something.
  3. Even though a person’s income is less than Rs. 2.5 lakhs, they are still required to file nil return in income tax if they possess foreign assets.

Is it okay if I don’t File ITR NIL Return?

You must file ITR NIL Return if your income tax nil return amount is more than Rs. 2,50,000. We urge you to file NIL ITR return even though it is not needed if your total income is less than NIL ITR limit of Rs. 2,50,000.

Steps for ITR NIL Return Filing Online?

Procedure to file nil income tax return online is same as that of a standard income tax return, just matter of amount and type of income can be different.

What are the Benefits of Filing NIL Income Tax Return?

You can still fill Nil ITR if your income is below the basic exemption threshold. Benefits of filing nil income tax return are as follows:

  • Income Proof: ITR is used to prove a person’s income for a particular financial year. When asking for a loan or a visa to a foreign nation, banking organizations will accept it as acceptable income proof.
  • Claim TDS Refund: When filing ITR zero return, you can claim any TDS that was taken from your interest income or any other receipt as a refund by online nil return filing.
  • To carry forward losses: ITR filing is required in order to carry over business losses or capital losses to the following financial year. Therefore, filing a tax return is essential.
  • While Applying for Visa: A NIL return comes in handy when applying for a VISA because the process also includes providing evidence of income. For instance, even if you did not have any income, you must submit the returns from the previous three years when applying for a Schengen visa.
  • While Applying for Loans: Once more, a legal document is required when applying for a car, housing loan, etc. When making any form of loan, bankers frequently request the latest three to five years’ Income tax returns. You would benefit from filing a NIL tax return in this circumstance.

So these were some NIL ITR benefits.

What is NIL Income Tax Return Last Date?

Nil income tax return last date is the assessment year’s July 31. The same day as a regular return is the deadline for filing a nil ITR. The nil return will be regarded as a belated return if it is submitted after the deadline. No late filing fines will be assessed for late filing of nil returns, but still income tax nil return filing must be done within due date else you won’t be able to roll losses over to the following year.

Frequently Asked Questions (FAQ)

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