Fast Guide to NIL Income Tax Return with Advantages for Individuals

One should not think of furnishing the ITR when your income comes beneath the tax slab. It is called nil income tax. A form where the assessee shows their income is called an Income tax return (ITR). There are various causes why an assessee should furnish an ITR, the main cause being claiming the tax deductions. While from the individual assessee, even the firms, proprietorships, and Limited Liability Partnerships are needed to furnish the nil income tax returns when there are no profits or business activities. In the latest tax regime, the person would avail of deduction beneath the income tax section 80CCD(2). The deduction would be availed when the employer contributes 10% of the basic salary to the Tier-I NPS account of the employee.

What Do You Mean by The Nil Income Tax Return

A nil ITR is furnished by the person whose taxable income comes below the income tax slab and does not need to furnish any taxes. It is essential to furnish the ITR irrespective of low/nil income.

Advantages of Filing The Nil Returns

• Filing nil returns would not be acknowledged as a load but it has its own advantages. Non-filing may indeed need to furnish the penalty to the IT department. when you have the 0% tax slab, furnish the nil returns every year and it will save you from penalties. Some of the advantages are:
• Proof of your income: A nil ITR provides the legal document providing all the needed information about your financial status. 
• To avail of the tax refund: Sometimes TDS is deducted on the income i.e on interest on bank FDR earned in FY even when the total income is less than the basic exemption limit. To avail of the TDS deducted, it is essential to furnish the income tax return. 
• Legal proof while applying for loans: It provides a legal document while applying for loans.
• Applying for a visa: A nil return is a proof when applying for the visa application as mentioned income proof is indeed a portion of the complete application process. 
• Set off losses: if you face the stock market, filing a nil return may assist you in this. 

What is The Method to Furnish The Nil ITR

There is no specific form to furnish the nil income tax returns. It would be furnished with the help of the same returns furnishing process that is compiled by another assessee.