How to File NIL Return Online in India
What is a NIL Return in Income Tax?
A NIL return in income tax is an Income Tax Return (ITR) filed when a taxpayer’s income falls below the basic exemption limit and no tax liability arises. Even though there is no taxable income, individuals may still choose to file a NIL return to officially declare their income status to the Income Tax Department.
For example, if a salaried employee earns below the taxable threshold or a freelancer records minimal income that does not attract tax, they can file a NIL return. It serves as an official confirmation of income levels and ensures transparency with tax authorities.
Who Should File a NIL Return in India?
If your income is below the basic exemption limit, filing a NIL return is not compulsory. However, it is advisable in certain cases such as if TDS was deducted, you want to claim a refund, or you need official income proof.
- Individuals with income below the taxable threshold
- Freelancers and self-employed professionals with low annual income
- Salaried employees whose employers deducted Tax Deducted at Source (TDS)
- Individuals with foreign assets or income abroad
- Pensioners or senior citizens with income below taxable limit
- Students or part-time earners who receive taxable payments but remain below exemption limits
- Individuals wishing to claim a TDS refund despite no tax liability
Benefits of Filing a NIL ITR
Filing a NIL return offers multiple advantages, including:
- Proof of income, useful for future financial transactions
- Easier loan approvals and visa applications
- Ability to claim refunds on TDS deductions
- Option to carry forward losses for future tax years
- Compliance with tax norms, reducing risk of notices
- Building financial credibility and creditworthiness
How to File NIL Return Online: Step-by-Step Guide
Filing a NIL return online can be done easily on the Income Tax Department’s e-filing portal. The steps are as follows:
- Visit the official Income Tax e-filing portal (www.incometax.gov.in)
- Log in using your PAN, Aadhaar or registered user ID
- Select the option to file Income Tax Return
- Choose the correct assessment year and ITR form (ITR-1 is most common for NIL return)
- Enter your personal and income details as required
- Confirm that your taxable income is below exemption limit
- Review all entries carefully before submission
- Submit the return and complete the e-verification through Aadhaar OTP, net banking, or other available options
Also Read: How to File Income Tax Return 2025: Complete Step-by-Step Guide
Required Documents and Information for NIL Return Filing
- PAN card
- Aadhaar card
- Bank account details and statements
- Form 16, if applicable
- Any other relevant income proofs
Also Read: ITR Form 16 Filing: How to File ITR Using Form 16
Common Mistakes to Avoid While Filing NIL Return
- Entering incorrect personal details such as PAN or Aadhaar
- Selecting the wrong ITR form
- Forgetting to complete e-verification after submission
- Reporting mismatched or incomplete income details
NIL Return Filing Deadlines and Penalties
For AY 2025-26, the due date to file is 15 September 2025. Belated returns can be filed till 31 December 2025. Filing on time helps avoid compliance issues. Key points include:
- Belated returns may be filed within the extended timeline allowed by the Income Tax Department
- No penalty is applicable for genuine NIL returns, but missing deadlines may create compliance issues
- Filing within time helps in avoiding unnecessary complications
NIL Return Filing for Special Categories
Different taxpayer categories may have specific considerations for NIL return filing:
- Freelancers: Can file NIL returns to declare low income and claim TDS refunds
- Senior citizens: Advised to file NIL returns for record-keeping and financial credibility
- Pensioners: Filing ensures smooth processing of future financial needs
- Individuals with foreign assets: Must file to remain compliant with foreign asset disclosure norms
FAQs
Q.1. Is filing a NIL return mandatory if my income is below the taxable limit?
A. Filing a NIL return is not mandatory if your total income is below the basic exemption limit.
Q.2. Can I file a NIL ITR without Form 16?
A. Yes, alternative proofs like bank statements or income certificates may be used.
Q.3. How long does it take to file a NIL return online?
A. If documents are ready, filing online through the e-filing portal usually takes 15–30 minutes.
Q.4. What happens if I miss the NIL return deadline?
A. For AY 2025-26, the ITR deadline is extended to 15 September 2025, belated returns can be filed until 31 December, and Section 234F late fees apply only if filing was mandatory and income exceeds the exemption limit.
Q.5. Can I claim a refund if TDS was deducted but my income is below exemption limit?
A. Yes, filing a NIL ITR allows you to claim such refunds.
Q.6. Which ITR form should I use for filing NIL return?
A. Most individuals can use ITR-1, depending on the source of income.
Disclaimer:
The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com.
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