Why should you file an ITR even if you don’t have a Taxable Income?

Income Tax return is a well recognised income proof. So, filing an income tax return is very important for all. As per law the return of income should be filed when the taxable income exceeds more than the basic exemption limit. Then you may think that why we are writing about something which is not required by law. Well, in this article our motive is to make our readers understand the importance of having a continuous record of Income Tax Returns with Income Tax Department and why you should file an ITR even if you do not have a taxable income.

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Who all are obligated to file return on Income basis?

As per Income Tax Law, any person whose income exceeds the basic exemption limit should file a return

Particulars Amount
Age less than 60 years Rs.2,50,000/-
Age between 60-80 years Rs.3,00,000/-
Age above 80 years Rs.5,00,000/-
As per new tax regime, basic exemption limit is Rs.2, 50,000/- in all cases.

As per old and new tax regime, these are the categories of individuals who are required to file their return compulsory. Now, law has specified certain other cases where the individuals need to file returns even if they do not have a taxable income.

Compulsory return filing under law- other than income basis

Following are the cases where law requires individuals to file income tax return even if they do not have taxable income-

  • Deposit of amount or aggregates of amount exceeding Rs 1 crore in one or more current accounts.
  • Incurred expenditure of an amount or aggregate of amount exceeding Rs. 2lakhs for travel to a foreign country for yourself or any other person
  • Incurred expenditure of amount or aggregate of amount exceeding Rs. 1 lakh on consumption of electricity.
  • Where a person is a signing authority for any located outside India.
  • If a person holds an asset outside India or is a beneficiary of any asset located outside India.

Other than this Income Tax Act has made return filing compulsory to avail following   benefits under law-

  • Relief from Double Taxation-Individuals who wish to claim relief from double taxation under tax treaties or double tax avoidance agreements should also furnish the return.
  • Claiming Tax Refund- Sometimes, a person is eligible for Tax refund. The refund can be because of tax deduction or excess payment by the person himself. To claim such refund also return should be filed compulsorily.
  • Carrying Forward and Set-off Losses – In cases where the brought forward losses are to be carried forward, return filing is compulsory under the law. This helps a person to set-off these losses in future years with permissible incomes.

Why you need the returns, even without taxable income

Now, Income tax return is considered as an important income proof. So, there are situations where even if return filing is not required as per law, but you may still need it. It can be for-

  • Availing Loans- There may be situations when a person wants to opt for a loan option for buying car, house etc. However, the lender will definitely want to know your credit worth and here is when Income Tax Returns comes to your help. You need to submit your income tax returns as an income proof to avail such loan facilities.
  • Applying VISA- If you are applying for a Visa and want to shift your base to the other country than also income tax returns are required. Immigration department asks for details about financial standing of the person. The same is taken in the form of valuation report for assets held and income tax return as income proof. So, income tax return can also help you get Visa.
  • Proof of Income- Income tax returns provides as a proof of income for the assessees. Unlike salaried class who have Form-16 to produce, self- employed class do not have any income proof. So for such persons having an income tax return is very beneficial is they want to produce their income proof.
  • Proof of Address- Income Tax Assessment Order is considered as one of the valid documents as per government guidelines. So, income tax return can definitely help in getting us an address proof also.

Other than this also there may be situations where filing returns can be beneficial as it serves as a record to support certain transactions in course of business.


So, hope you have understood that it is better to file an income tax return. A person should file the return even if he does not have a taxable income. The above discussion is enough of a proof to highlight the importance of filing return. The due-date of filing returns of income is 30.09.2021 for AY-2021-22, so hurry up and file the return and our team is ready to help you do the same.

CategoryIncome Tax

CA Rohit Goyal has experience in multiple spheres including general functions in the field of Auditing, Accounting, and handling Scrutiny Assessments, Taxation Matters along with the specialized functions including Finance, Banking and also handles the field of Stock Audit, Internal Audit and other Various Assignments of Banks.

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