Filing an Income Tax Return (ITR) is often considered mandatory only if you have taxable income. However, even if you have no income or your income is below the basic exemption limit, filing a zero ITR can be extremely beneficial in many circumstances. In this guide, we will explain what zero ITR means, who should file it, what are its benefits, and how you can file it online.
What is a Nil Tax Return?
A Nil Income Tax Return means filing your ITR even when you don’t have any income, or your income is so low that you don’t have to pay tax. It’s not compulsory in this case, but many people still file it to keep their financial records clean and up to date.
For example, if your total income for the financial year 2024–25 is below the applicable basic exemption limit, you are not required to file an Income Tax Return. However, many people still file a return to show that their income is below the taxable limit. Such a return is commonly known as a Nil Return.
Even though it’s not mandatory, filing a Nil ITR can be useful later — like when you apply for a loan, a credit card, or a visa. It helps build a proper income record and shows that you’re financially responsible.
Who Should File a Nil Return?
Filing a Nil return is not compulsory for everyone, but it is strongly recommended for certain individuals in the following scenarios:
Students or Freshers with Low Income
If you are a student or recently started working as a freelancer, and your income is below the taxable limit, filing a Nil return helps create a financial record for the future.
Homemakers or Non-Earning Family Members
Even if there is no income, filing a Nil ITR for a homemaker shows a clean financial trail and may help in applying for a visa or loan.
Retired Individuals with No Income
Senior citizens whose income is below the exemption limit can file a Nil return as a formality or record keeping.
Individuals With TDS Deducted but No Tax Liability
If TDS was deducted by a bank on interest income but your total income is still below the exemption limit, filing a Nil return allows you to claim a refund.
Applicants for Visa, Loans, or Subsidies
Many embassies and financial institutions ask for ITRs of the last 2–3 years, even if they show zero income. Filing Nil returns ensures you don’t face documentation issues later.
Benefits of Filing a Nil Tax Return
Even if you are not legally required to file, there are several advantages to submitting a Nil return:
Helps maintain a proper financial history
Useful for loan or credit card applications
Required in many government job or tender applications
Mandatory for carrying forward certain losses
Builds a tax record that may help in future income assessment
