NIL ITR: People whose income does not fall under the tax bracket do not file ITR. But even if you have zero tax liability, you should file zero return. In this, you do not have to pay even a single rupee tax, so it is called zero return. This means that you have to tell the Income Tax Department that your income is below the taxable income, so you did not pay tax.
NIL ITR: The last date for filing Income Tax Return (ITR) is 31st July. Now you will have to pay a penalty for not filing income tax. But, zero return i.e. return with zero tax liability can still be filed without any penalty. The thing to keep in mind in this is that you will not be able to claim any deduction. Your total income should fall directly within the basic exemption limit.
In the new tax regime, the basic exemption limit is Rs 3 lakh for everyone. Whereas, in the old tax regime, the basic exemption limit for people below 60 years of age is Rs 2.5 lakh. For 60-80 years, it is Rs 3 lakh and for people above 80 years of age, it is Rs 5 lakh. People falling in this category can file returns without penalty.
Let us know why one can file zero return, why it is filed, what are its benefits.
Easily get loan
Income tax return serves as proof of your income. When you file ITR, it becomes a solid proof that you are earning from some source. This also creates your credit profile. This makes it easier for you to get a loan from a bank or NBFC (Non-Banking Finance Companies).
TDS will be refunded
If you are a salaried person and are unable to submit Form 15G/H, then TDS (Tax Deduction at Source) will be deducted from your salary. In such a situation, zero return can save you from loss. With its help, you can claim the refund of the TDS amount which your company has deducted from your salary.
The advantage of showing a loss
If you invest in business or stock market, you may incur loss during the financial year. In such a situation, you can show your loss by filing zero return. When you make profit in the future, you can adjust that loss in taxable income. This will reduce your tax liability.
You will get visa easily
With zero ITR, you can easily get visa for many countries. Sometimes visa officers ask for ITR of a few years for foreign travel. They actually want to verify your income level. In such a case, ITR may also be required along with bank statements and other financial documents.
Also Read- GST taxpayers Alert! GSTR-1 will not be filed without bank account information, the rule will be applicable from this day
Also helpful for scholarship
Many scholarships or fellowships are given on the basis of income. If you have filed zero ITR, then you can easily show your income limit. This will make it easier for you to get those government fellowships, which are especially for low-income families.
Who can file zero return?
If you are filing income tax return for the first time and your total income does not fall under the taxable income bracket, then you can file NIL return. It can also be filed by those who have been filing returns for the past several years, but this time their income has fallen below the income tax bracket. However, filing a zero return after the deadline does not provide benefits like carrying forward of losses.
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