What is a Nil Return, when does it need to be filled?
Filing a Nil tax return means that the taxpayer does not have taxable income.
The Nil or Zero Return Income Tax Department is filed to show that your income is less than the taxable income. So, you have not filled the tax in that financial year.
If your total salary is less than Rs 2,50,000, then you are not liable for tax. You do not pay any tax for this. Hence, Nil Return is an income tax return with ‘Zero or Nil’ tax liability. Filing a silent tax return means that the taxpayer does not have taxable income. He is filing this to inform the tax department.
When and who needs to file this?
– You can file a clean return to claim the tax refund. During the year your income tax exemption limit may be less than 2.5 lakh rupees. But, the bank has deducted TDS from the interest because you have forgotten to submit Form 15H / G. In that case, you can file a clean return to claim the tax deducted.
– If someone has applied to the bank for a loan or credit card and the bank has asked to show proof of income. Then if someone has filed a clean return, he can show it as income proof.
Income proof is required to apply for a travel visa. Income tax return helps in this.
– Many times small companies do not give Form 16. Hence, income tax can be used as proof of return income. Under the seventh provision of section 139 (1) of the Income Tax Act 1961, if someone’s income is less than the exempted limit, he will have to file ITR in certain circumstances. These include the situations described below:
1. If someone pays an electricity bill of more than 1 lakh rupees during the year;
2. Spends more than 2 lakh rupees on travel in foreign countries;
3. There are more than 1 crore deposits in the current account.