New Delhi: The deadline for filing Income Tax Returns (ITR) for the assessment year 2024-25 is approaching, which is July 31, 2024. It is important for taxpayers to file their ITR by this date to avoid penalties. According to the Income Tax Act, individuals earning below the basic exemption limit are not required to mandatorily file an ITR. This often leads to confusion among taxpayers who wonder whether they should file a return if their income is not taxable. If your income is below the taxable threshold, filing an ITR is not compulsory. However, there is no harm in doing so.
In any financial year, if your income is less than the Basic Exemption Limit, then it is not mandatory for you to file an Income Tax return. The basic exemption limit depends on the Income Tax regime chosen by the individual. In the Old Tax Regime, the basic exemption limit for a person below 60 years is Rs 2.5 lakh. For senior citizens this limit is Rs 3 lakh and for super senior citizens, the limit is Rs 5 lakh.
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In the New Tax Regime, the basic exemption limit i.e. Income Tax exemption limit in the financial year 2022-23 is Rs 2.5 lakh. This limit has been increased to Rs 3 lakh from the financial year 2023-24.
What is Nil or Zero Return?
Nil or zero Income Tax return is filed with the Income Tax Department to show that your income is not taxable and hence no tax has been deposited during the year. Nil Return is filed when your income is less than the basic exemption limit of Rs 2.5 lakh or when the rebate reduces the tax liability to zero. The return filed in such cases will be considered as Nil ITR.
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What are the Benefits of Nil ITR?
Benefits of Nil ITR? Under the Income Tax Act, it is necessary to file ITR if the income is above Rs 2.5 lakh. If the income is less than this, it is not necessary to file the return but it is wise because it has many benefits. Some of them are:
1)- Income Tax return is the government proof of your income. If you get salary in cash then you may not have proof of it. In such a situation, you can show government proof of income by filing your Income Tax return.
2)- ITR is useful for many things. In taking maximum loan. Be it home loan, personal loan or car loan, banks everywhere ask you for ITR of at least two years. In case of credit card, ITR has to be given as income proof along with salary slip
3)- You can file Nil return to claim tax refund. If the bank or employer has deducted any kind of TDS from you and your income is less than the basic exemption limit, then refund can be taken by filing Nil return.
4)- Returns are also useful while traveling abroad. If you want to go to Canada, America or any other country then you have to apply for a visa. At that time the visa officer asks for ITR to find out your income or net worth.
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Nil Return: In any financial year, if your income is less than the Basic Exemption Limit, then it is not mandatory for you to file an Income Tax return. The basic exemption limit depends on the Income Tax regime chosen by the individual. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
