Know what is a Nil return? When do you need to file one
A nil income tax return is filed to show the Income Tax Department that you fall below the taxable income and therefore did not pay taxes during the year.
If your gross income is less than the maximum amount excluded from tax, which is Rs 2,50,000, your tax obligation is zero, and you pay no taxes for the same. As a result, a nil return is an income tax return with a tax liability of “Zero or nil.” The term “filing a nil return” refers to notifying the tax department that a taxpayer does not have any taxable income for a given fiscal year.
When and who needs to file it?
You can file a nil return to claim tax refund. It is possible that your income for the year is below the exempted limit of Rs 2. 5 lakh but your bank deducted TDS (tax deducted at source) from the interest as you forgot to submit form 15H/G. In this case you can file a Nil return to claim the tax deducted.
In case someone is applying for a loan or credit card, banks ask for income proof. In such cases if one has filed a Nil return, it can be used as income proof.
For applying for a travel visa, one needs to provide income proof, and an income tax return serves as one.
At times smaller companies don’t provide Form 16, therefore the income tax return can be used as proof of income…Read more>>