What Is Nil Income Tax Return?How to file Nil Income Tax Return?
Here Is Why You Should File It
Did you know that you can file a tax return even if your income for the
year is below the taxable limit? If your taxable income is less than the
threshold limit of Rs 2.5 lakhs in a year, you are not mandated to file
income tax return. But if you want to, you can file a nil return.
But you may wonder why get into the hassle of filing a tax return when
you don’t have to pay any taxes. There are certain benefits of filing
tax returns that you may not be aware of
1) To carry forward losses
The only condition to carry forward losses is that you have to file tax
return on time. If you file your income-tax return after due date which
is generally July 31 of the year, you will not be allowed to set off
your capital losses against capital gains in a belated return
For
example, you have incurred a loss suppose on sale of equity shares. To
carry forward these losses for future adjustment with capital gains you
must file tax returns.
2) To claim TDS refund
If your bank has deducted tax deducted at source (TDS) on your interest
income over Rs 10,000, despite the fact that your income is below the
taxable limit, you can claim a refund only if you have filed a tax
return. Also, in case your rental income is more than Rs 1.8 lakhs in a
year, your tenant is liable to deduct TDS. You will have to file a tax
return for refund of TDS.
3) To show proof of your income
If you are applying for any kind of loan, most lenders ask for your
income tax return of the past few years as a proof of income. Even if
you are applying for a visa, foreign countries often ask for
your income-tax return to know your financial position before issuing
visa
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