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FAQs On ITR filing: What Is A Nil Return And Why Should You File One?
Individuals cannot receive a refund on tax deducted at source (TDS) unless they file their ITR, according to tax experts. As a result, even if their annual income is less than Rs 2.5 lakh, individuals are recommended to file a nil return, but it is not required.
Individuals with annual earnings less than Rs 2.5 lakh are encouraged to file their income tax return (ITR) for the assessment year 2022-23 or financial year 2021-22 by July 31.
According to tax experts, unless you file an income tax return, you cannot seek a refund on tax deducted at source (TDS). As a result, even if your annual income is less than Rs 2.5 lakh, you need file income tax reports.
Here are some often asked nil ITR questions.
What exactly is nil return?
Individuals who earn less than the taxable income must file a nil income tax return. These people are not required to pay income tax throughout the year, but they must demonstrate to the income tax department that they are below the taxable threshold.
Who should file a zero ITR?
Those who earn less than the taxable limit but want to keep track of it can file a zero ITR.
Individuals who have been filing income tax returns for many years and have fallen below the taxable limit this year should file a zero ITR.
Those who have paid TDS must file a nil ITR to receive a refund.
Why should you do so?
When applying for a visa or passport, the ITR acts as proof of income. As a result, filing an income tax return is critical. It also assists individuals in ensuring that there are no gaps in their tax filing records. It is also a precautionary strategy to avoid receiving automatic notices from the IRS.
What are the advantages of filing a nil ITR?
Filing a zero ITR allows you to claim reimbursements for TDS deducted by your employer. Without considering deductions, some people’s total income may be higher than the taxable limit. However, with the deductions, the income may fall below the Rs 2.5 lakh minimum exemption level. Individuals who have paid more in taxes must file income tax returns in order to receive a refund.
Filing no ITR is also advantageous for people who intend to seek for loans. Banks or other lending institutions may request ITR from the individual in order to sanction the loan amount.
How do I submit a nil return online?
Filing a zero return is the same as filing an income tax return. An individual must submit income and deduction information. The income tax will be computed and displayed as zero dues. The individual must next send the ITR to CPC Bengaluru to finish the e-filing process and submit the return to the income tax department.
What if you don’t file a nil return?
It is encouraged, but not required, that persons with a total income of less than Rs 2.5 lakh file income tax returns.