At the point when your taxable income is below the exemption limit your tax liability comes to zero and hence you are not liable to pay any tax. Along these lines, income tax return having tax obligation as "Zero or nil" is known as a nil return. At this point, numerous a times, people get confounded whether in such cases, they are required to file their income tax return or not? The appropriate response is "Yes". You should file a nil return in order to get many benefits associated with the filing of income tax returns. There is no different shape or process for recording nil tax and the whole procedure is like filing a typical return which you file often. The Form to be utilized remains ITR-1 Sahaj itself.
Benefits associated with the Filing of Nil returns
There are many people who are often confused when it comes to filing income tax returns when their income is below the non-taxable limit. But for the sake of argument if we carefully examine the benefits of filing income tax returns then results will always be in favor of the filing income tax returns even if it is the case of Nil or Zero return. Some of the benefits that can be listed for the filing of nil income tax returns are easy loan processing, easily get funded for your startup etc. It can actually expedite visa processing and the process of obtaining LIC agency and for appointment in judicial and class one jobs. Actually, filing the income tax returns shows the persons credibility. Let us have a look at some more benefits associated with filing income tax returns in details.
1. It can expedite your loan processing
One of the most important advantages of paying taxes and filing your income tax return is that only the income revealed by you in your income tax return is thought to be your actual income. In the event that you apply for a loan in the bank than the income revealed by you in your income tax return would be considered as the legitimate source of income. The vast majority of the bank demands your last three-year ITR at the time of applying for a loan. In the event that you filed your ITR then it will expedite your loan processing time.
2. You are eligible to carry forward your losses
If you have filed your return then you are eligible to carry forward your losses to the next financial years. Even you have the option to carry forward the Losses under the speculation business including business and profession, capital gain, income from different sources can also be carry forwarded. On account of a not filed income tax return you are not eligible to carry forward your losses despite the fact that taxes have been paid on time on any of the losses.
3. for avoiding penal consequences
Non-filing of income tax returns has penal consequences, for example, a penalty, prosecution, and scrutiny from Income Tax Departments. Even Union Budget 2017 has proposed a late fee on non-filing of your income tax liability.
4. You can get interests on your refunds
As indicated by income tax rule in the event that you have paid an extra tax to the administration then you are qualified to get interested of 0.5 percent for each month on the extra sum. Such interest would be calculated from first April to the concerned date on which discount is allowed. Here is a word of caution, you would not get any interest on your extra tax in the event that you filed your ITR after the due date. Thus it is constantly prudent to file your ITR with a specific end goal to gain interests on refunds.