New Delhi :
With the deadline for Income Tax Return (ITR) filing approaching, individuals are encouraged to file their returns even if their income is not taxable.
Despite the current income tax rules stating that filing is only necessary if income exceeds the basic exemption limit,
there are several advantages to filing ITR in certain situations where income falls below that limit.
Benefits of Filing ITR Even with Non-Taxable Income
Filing a nil Income Tax Return (ITR) can bring several advantages, providing individuals with legal proof of income even when their yearly earnings fall below the Rs 2.50 lakh exemption limit.
Here are five benefits of filing a nil ITR, along with a step-by-step guide on how to file it online.
1) Legal Proof of Income
By filing a nil ITR, individuals can obtain an authentic document that serves as legal proof of their income.
This can be useful in various scenarios, such as applying for loans, securing visas, or demonstrating financial stability.
2) Tax Refund
Even if an individual’s income falls below the exemption limit, if tax has been deducted at source (TDS) from their salary during the financial year, it is mandatory to file an ITR. Filing a nil return ensures compliance and can facilitate the process of claiming a tax refund, if applicable.
3) Borrowing Purposes
When applying for loans like home loans, auto loans, or personal loans, financial institutions often require ITRs as an essential document.
Filing a nil ITR helps demonstrate an individual’s financial status, improving their chances of loan approval.
4) Setting Off Losses
In situations where an individual has incurred losses in the stock market during a financial year and decides to carry forward the equities holding to the next year, filing a nil return becomes necessary. This allows for the proper adjustment of losses and potentially reduces tax liabilities in the future.
5) Passport or Visa Application
A nil return can also serve as income proof when applying for a passport or visa. Including this document as part of the application process helps establish the applicant’s financial background and can streamline the verification process.
How to File a Nil ITR Online?
Filing a NIL ITR follows a similar process to filing a regular ITR and does not require any special request.
Here’s a step-by-step guide to filing a nil ITR online:
Step 1: Visit the official website of the Income Tax Department and log in using your registered user ID and password.
Step 2: Select the option for e-filing and provide your income and deduction details accurately.
Step 3: The income tax computation will be automatically generated, reflecting that no tax is due.
Step 4: Submit the completed return to the income tax department.
Additionally, you will need to send the ITR-V (Income Tax Return Verification) form to the Centralized Processing Centre (CPC) in Bengaluru to finalize the e-filing process.
By following these steps, individuals can file a nil ITR efficiently, ensuring compliance with tax regulations and reaping the benefits associated with filing a tax return, even when their income is below the exemption limit.
