A nil income tax return is filed by an individual whose taxable income falls below the income tax slab and therefore, he/she is not required to pay any taxes. It is important to file an ITR irrespective of low/nil income. If you fall under this category and choose to file a nil ITR, you are declaring to the Income Tax Department that you have earned nil/low income during that assessment year. So, is it really mandatory to file a nil ITR? Read ahead to find out.
You should file a nil ITR to showcase the following:
Filing a nil ITR does not require a special request. The procedure is the same as filing a regular ITR. You can file a nil ITR online through e-filing.
Yes you can. But it is recommended that you file a nil ITR, even though your income is below Rs. 2.5 lakhs. This will help maintain records and build a sound financial profile.
Ans: You need to compute your tax liability, pay the pending taxes (if any), and give a written submission to the Assessing Officer in your ward.
Ans: The penalty for not filing an ITR before 31st July is Rs. 5,000. If the taxable income is less than Rs. 5 lakhs, the penalty is capped at Rs. 1,000.
Ans: Yes, you have to file a nil return for your company, even if there is no revenue or activity in the company.
Ans: Yes, NIL return filing is mandatory for companies which do not have a bank account.
Ans: Yes, you have to file a nil return for an LPP, even if there is no revenue or activity.
Ans: ITR-3 or ITR-4 is applicable for a sole proprietor/proprietorship.
