All About NIL Income Tax Returns, Requirements and Filing Details for 2024

With tax season approaching, many individuals are unsure if they still need to file forms even if their income is below the taxable threshold. You must file an Income Tax return (ITR) if your total income exceeds the basic exemption threshold.

Certain forms of income, such as capital gains or profits from overseas assets, may require the filing of an ITR in situations when the income is less than this ceiling.

Furthermore, let’s say that Tax Deducted at Source (TDS) has been deducted from all sources of income, including interest earned on bank deposits. Then, to recover any excess TDS or other tax payments made throughout the fiscal year, it becomes necessary to submit an ITR.

The greatest tax refund that could be obtained under the old tax structure was limited to Rs 12,500; however, under the new tax regime, it may be as much as Rs 25,000. Consequently, you are not required to pay any income tax if your income is within these designated limitations. Even though these refunds result in a lower tax obligation and no tax payment, filing an income tax return (ITR) is still required.

What is a NIL return?

An income tax return for which the taxpayer has no tax due is known as a Nil ITR. To notify the tax authorities that no taxes were paid during the relevant financial year, an income tax return (ITR) is filed. Even if there is no tax obligation, filing an ITR has several benefits, including the chance to get a tax refund, help with visa applications, carry forward capital losses, and more.

A couple of these advantages are covered in depth below: Evidence of income: An official record that may be used to demonstrate your income is your ITR. This might be useful if you need to prove your financial situation while applying for loans, visas, or other financial activities.

Claim deductions and refunds: Taxes deducted at the source (TDS) from a variety of income sources, such as salary or interest, must be taken into account when an individual’s income is below the taxable level. Any excess taxes paid can be refunded to individuals by filing an Income Tax Return (ITR). In addition, taxpayers can maximise their tax benefits by deducting certain investments and costs from their income under sections 80C, 80D, and other pertinent provisions. By taking advantage of these deductions, you may drastically reduce your taxable income and improve your chances of getting a tax refund.

Loan approvals: Income tax reports are used by lending institutions as verified evidence of income, which facilitates loan applications.

Losses: You can carry over and deduct losses from your future income if you have suffered financial setbacks, such as losses from stock market investments or company ventures. It is necessary to submit your ITR to carry out this process.

You may effectively manage your losses and determine your eligibility for different government schemes and rewards by filing your ITR. A requirement of several government programmes, such as subsidies or scholarships, is the filing of an ITR. Therefore, by meeting this prerequisite, you ensure that you may access these advantageous programmes.

Travelling abroad: Several nations need the Income Tax Return (ITR) form as a necessary document when applying for a visa. Providing ITRs increases the likelihood of a visa being approved by demonstrating financial stability.

Tax refunds: Deductions may occur if Form 15G/H for TDS is not submitted. Taxpayers can request a reimbursement from banking institutions for the amount of TDS withheld by filing a Nil ITR.

The procedure for filing a Nil ITR is the same as for filing a standard ITR, and it may be completed online by following these steps:

• Enter your registered user ID and password to access the Income Tax Department’s official website.
• Go to the area for electronic filing.
• Enter the information of your deductions and income.
• Fill out Form 16, Aadhaar, bank account information, salary information, PAN, and investment details.
•  If you have no income, the system will automatically compute your income tax and indicate that there is no tax owed. Submit your return to the Department of Income Taxation.
• You can email your ITR-V to CPC Bengaluru or e-verify your ITR to finish the e-filing procedure.