Earn below ₹4 lakh? 6 reasons why you should still file ITR

Summary: Think you don’t need to file taxes because your income is below Rs 4 lakh (new tax regime)? Think again. Filing a Nil income tax return could give you a head start on your financial future. So, register to find the joys of filing a Nil ITR.

Shweta, a 24-year-old freelancer, made just under Rs 2.5 lakh last year. She didn’t owe any tax. Her dad told her not to bother with income tax returns. But she filed it anyway.

Three months later, when she applied for a travel visa, the embassy asked for her ITRs. Thanks to her Nil return, she cleared the process without a hitch. Had she skipped it, she might’ve faced a delay. Or worse, rejection.

Filing a Nil income tax return (ITR) might seem pointless when your income is under the basic exemption limit. But in reality, it can be surprisingly useful.

What is Nil ITR and who should file it?

Filing a Nil ITR is your way of officially informing the tax department that your income is below the taxable limit and that you owe no tax for the year.

You can file a Nil ITR if your income falls below the basic exemption limit:

Old tax regime

• Rs 2.5 lakh for individuals below 60
• Rs 3 lakh for those aged 60–80
• Rs 5 lakh for those over 80

New tax regime

• Rs 4 lakh

This includes:

• Students doing internships or part-time jobs
• Homemakers with some income from interest or rent
• Senior citizens earning below the exemption limit
• Unemployed individuals during a gap year

Why file if you don’t owe any tax?

Here’s what filing a Nil ITR unlocks:

1. Builds financial proof

Your ITR is considered an authentic income proof by banks, NBFCs, embassies and even landlords. Whether you're applying for a home loan, education loan or a visa, having a consistent ITR record can strengthen your case.

2. Makes it easier to claim future losses

If you want to carry forward capital losses, for example, from mutual fund exits, you need to file your ITR, even if you don’t owe taxes. Missing that deadline could cost you the benefit in future years.

3. Helps in getting TDS refunds

Did your bank deduct TDS on fixed deposit (FD) interest or some other interest income? Even if your income is below the taxable threshold, you need to file an ITR to get that refund. No return, no refund.

4. Avoid compliance notices

In some cases, the IT Department may receive details about your high-value transactions — say, if you’ve invested in mutual funds, bought gold or deposited cash above Rs 10 lakh in a year. If you haven’t filed an ITR, this could trigger a compliance notice. A Nil return can keep your record clean and transparent.

5. Opens the door to home/education loans and scholarships

6. Helps you get funding if you open a startup

A smart habit for long-term gain

Filing a Nil return is like building a credit history — except it’s your income history. If you’re planning to grow your income in the coming years (and who isn’t?), creating that paper trail early could pay off.

By the bye, the cut-off to file the ITR is September 15, 2025.

Want to go from low income to long-term wealth?

At Value Research, we believe that wealth creation begins with the right habits — and Nil ITR filing is one of them.

When you’re ready to grow your wealth, let us help you invest smartly.

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Also read: You now have until September 15 to file your ITR

This article was originally published on July 23, 2025.