ITR Filing Deadline: The deadline for filing income tax return is 31 July 2023. This is the time when most of the taxpayers are busy in filing ITR. There is a misconception in the mind of some people that if their annual income is less than Rs 5 lakh, then they do not need to file tax return as they do not have to pay tax. So know that it is not like that at all.
What is the rule
Taxpayers whose annual income is less than Rs 5 lakh do not have to pay tax as they get a deduction of Rs 12,500 under section 87A. It is not that their income does not come under the taxable limit. The tax exemption limit is only up to Rs 2.50 lakh.
What is zero return or NIL return?
Zero returns are those in which taxpayers do not have to pay any tax. This happens when the income of a taxpayer is less than the exemption limit. When a taxpayer’s income is less than Rs 2.50 lakh in a financial year, then he has no tax liability. Such people are not required to file tax returns as they do not fall in the tax bracket. If such people still file returns, whose income is less than Rs 2.50 lakh, then it is called NIL return. Let us tell you here that it is not mandatory to file zero return. However, there are many advantages of filing NIL or zero return.
What is the meaning of zero return
Zero return means that you are telling the tax department that your income is not taxable. Your income is less than Rs 2.50 lakh. Filing zero return means that you are not paying tax in that financial year.
Benefits of filing zero return
Loan is easily available
If you file ITR then you get loan easily. To take a loan, you have to give ITR of 3 years.
TDS refund becomes easy
If a taxpayer forgets to fill 15G or H, then his tax is deducted, then he can fill the return by filing ITR.
ITR will be required for Visa
Filing zero returns makes it easier for you to apply for visa applications and credit cards. It acts as proof of your income.