E-File Nil ITR (Income Tax Return)

Important Keyword: Due date, e-File ITR, Nil ITR

E-File Nil ITR (Income Tax Return)

Nil ITR (Income Tax Return) refers to a return filed when the total income earned during a financial year falls below the basic exemption limit, which is currently set at INR 2,50,000. According to the Income Tax Act, individuals earning less than INR 2,50,000 are not required to file an ITR. However, if a return is filed in such cases, it will be considered as a Nil return.

The due date to file a Nil Income Tax Return is the same as that for regular returns, which is on or before 31st July of the Assessment Year. Filing a Nil return after the due date will be considered as a belated return, although no late filing fees will be levied.

It’s worth noting that due to the Covid-19 pandemic, the deadline to file ITR for the Financial Year 2019-20 (Assessment Year 2020-21) was extended to 31st December 2020, provided tax audit was not applicable.

Nil returns can be filed using the following methods:

1. Income Tax e-Filing Account: Log in to your account on the Income Tax e-filing website, prepare the return, and file it online.
2. Prepare ITR Offline Using Utility: Offline preparation of the return can be done using Income Tax Utility, followed by filing the return through your e-filing website login.
3. File Through a DIY Platform: Utilize an Electronic Return Intermediary (ERI) platform like Quicko to file your Income Tax Return (ITR).

What are the benefits of filing a Nil Tax Return?

Even if your income falls below the basic exemption limit, filing a Nil Income Tax Return can offer several benefits:

1. Proof of Income: Filing a Nil ITR serves as evidence of your income for a specific financial year. Financial institutions often require this document when you apply for loans. Additionally, it can be useful when applying for visas to foreign countries.
2. Claim Refund of TDS: If any Tax Deducted at Source (TDS) is deducted on your interest income, filing a Nil return enables you to claim a refund for the deducted TDS amount.
3. Avoid Notices from IT Department: Filing a tax return, even if it’s Nil, can help you avoid receiving notices from the Income Tax Department. The department may issue notices to non-filers, so filing a Nil return proactively prevents such correspondence.
4. Carry Forward Losses: If you incurred losses in business during the financial year, filing an ITR, even with nil income, is necessary to carry forward those losses to the next financial year. This practice ensures that you can offset these losses against future profits, reducing your tax liability in subsequent years. Therefore, filing a Nil return is a prudent financial decision.

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Official Income Tax Return filing website: https://incometaxindia.gov.in/