Free website hits

Is It Compulsory To File A Nil ITR?

Is it compulsory to file a nil ITR? This question arises in the minds of many individuals. According to the provision of the Income Tax Act 1961, it is not mandatory to file an income tax return if the taxable income of the individual is less than the basic exemption limit. The limit prescribed by the income tax department is as follows:

  • Rs 250000 for individuals below 60 years.
  • Rs 300000 for senior citizens (more than 60 years)
  • Rs 500000 for super senior citizens (more than 80 years)

But even if one falls in the above category, one may still have to file ITR. ITR filing is mandatory if:

  • Expenditure of more than Rs.100000 towards electricity consumption
  • Expenditure of more than Rs. 200000 towards foreign travel
  • When someone wants to carry forward losses to the next year
  • When the assets of the individual are located outside of India
  • When more than 1 crore is deposited in the bank account in the previous year

Advantages Of Filing Nil ITR 

There are certain advantages to filing ITR, even if one falls below the exemption limit. These advantages are:

Acts as a proof

Income tax returns may act as valid proof when submitted to the government. Also, students may require income tax returns for availing of scholarships.

Loan and credit card approvals:

Income tax returns can also act as proof in certain areas. Sometimes banks and insurance companies ask for proof of income. It helps in the faster processing of loans and credit card applications.

Not liable for a higher tax deduction or collection: 

Section 206AB or Section 206CCA prescribes the deduction or collection of tax at higher rates where a person fails to furnish his return of income for a specified period and the amount of tax deduction/collection during the period exceeds the specified limit. A person can avoid such a higher tax deduction/collection by furnishing an income tax return.

Avoids the best judgement assessment:

Best judgement assessment is done by tax authorities to assess the tax liabilities of taxpayers when they fail to provide accurate information. Filing an ITR helps to avoid the best judgement assessment.

Also Read: Smart Strategies: How to Choose the Perfect Tax-Saving Investment for Optimal Income Tax Savings


In conclusion, filing nil ITR not only helps in keeping a record of our income but also provides us with many benefits. Filing returns ensures compliance and helps us avail most of the available tax benefits. For further guidance and information regarding Income tax filing, you can contact our tax experts at FileMyReturn.

2 minutes

Leave a Reply

Discover more from

Subscribe now to keep reading and get access to the full archive.

Continue Reading

%d bloggers like this: