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Income Tax Return: Why Filing A Nil ITR Is Important Even If Your Income Is Below The Exemption Limit
Many taxpayers with income below the exemption limit skip filing an Income Tax Return, assuming it is unnecessary. Yet filing an ITR, even with no tax payable, can support future financial plans. A filed return acts as formal income proof, helps in claiming any tax refund due, and remains important because deadlines and forms differ across income types and financial years.
Under income tax rules, individuals whose taxable income stays below the basic exemption limit are not legally required to file an ITR. Despite this, many taxpayers still submit a Nil ITR. They do this to maintain updated records with the Income Tax department, support applications for financial products, and ensure any tax deducted at source can be reclaimed whenever eligible.
Who benefits from filing an Income Tax Return below the exemption limit
Submitting a Nil Income Tax Return creates an official record of income for the financial year. Lenders and card issuers often ask for ITR acknowledgements when assessing applications for loans, credit cards, or other credit lines. Visa authorities and some foreign institutions may also request ITR copies. Filing a Nil ITR therefore strengthens documentation, even when taxable income falls below the exemption threshold.
Income Tax Return and tax slabs under the new and old regimes
The basic exemption limit depends on whether a taxpayer selects the new tax regime or the old one. Under the new tax regime, income up to ₹4 lakh is tax-free. Earnings from ₹4 lakh to ₹8 lakh are taxed at 5%, with higher slabs applying to larger incomes. The highest rate of 30% applies when income exceeds ₹24 lakh within this structure.
For taxpayers using the old tax regime, the basic exemption limit stands at ₹2.5 lakh. Income from ₹2.5 lakh to ₹5 lakh is taxed at 5%. Income between ₹5 lakh and ₹10 lakh attracts a 20% tax rate. Any income above ₹10 lakh is taxed at 30%. Choosing between regimes affects total tax liability and whether tax deducted at source leads to a refund claim.
These slab rates for the Income Tax Return under both regimes can be presented as follows for clarity:
| Tax Regime | Income Range (₹) | Tax Rate |
|---|---|---|
| New tax regime | Up to 4,00,000 | Nil |
| New tax regime | 4,00,001 – 8,00,000 | 5% |
| New tax regime | Above 24,00,000 | 30% (highest slab) |
| Old tax regime | Up to 2,50,000 | Nil |
| Old tax regime | 2,50,001 – 5,00,000 | 5% |
| Old tax regime | 5,00,001 – 10,00,000 | 20% |
| Old tax regime | Above 10,00,000 | 30% |
Income Tax Return refunds and use of Nil returns
Even when income falls under the exemption limit, tax may already have been deducted at source on interest, salary, or other payments. After applying eligible deductions and exemptions, some taxpayers find their final taxable income is below the threshold. Filing an Income Tax Return becomes essential in such cases because the ITR is needed to claim back any excess TDS collected during the year.
Income Tax Return deadlines for FY 2025-26
Deadlines for filing the Income Tax Return in FY 2025-26 differ according to the nature of income and whether an audit applies. Individuals in non-audit cases, such as salaried employees, pensioners, and many investors, must file ITR-1 or ITR-2 by 31 July 2026, unless the Income Tax department extends this last date through a formal notification.
For non-audit Business or Profession income, including freelancers and small businesses, the due date to file ITR-3 or ITR-4 is 31 August 2026. Taxpayers whose accounts require audit must submit ITR-3 or ITR-4 by 31 October 2026. Those who miss these due dates can still file a belated Income Tax Return, but this must reach the department by 31 December 2026.
The key Income Tax Return due dates for FY 2025-26 can be outlined as follows:
| Category | Applicable ITR Forms | Due Date (FY 2025-26) |
|---|---|---|
| Individuals (Non-audit): Salaried, pensioners, investors | ITR-1, ITR-2 | 31 July 2026 |
| Business/Profession (Non-audit): Freelancers, small businesses | ITR-3, ITR-4 | 31 August 2026 |
| Tax audit cases: Business owners, professionals requiring audit | ITR-3, ITR-4 | 31 October 2026 |
| Belated Return (Late filing) | All ITR forms | 31 December 2026 |
Income Tax Return forms notified for AY 2026-27 and author details
The Income Tax department has already notified all Income Tax Return forms for assessment year 2026-27. ITR forms 1 to 4, used mainly by small and medium taxpayers, were notified on 30 March. ITR forms 2, 3, 5, 6 and 7, along with ITR-U for updated returns, were notified on 31 March. These notifications allow taxpayers to plan ITR filing well in advance.
This explanation of Income Tax Return rules and timelines draws on the work of Sanchari Ghosh, Assistant Editor at Mint. Sanchari Ghosh has over 12 years of journalism experience in personal finance, Distributed Ledger Technology, DeFi, geopolitics, and foreign policy. The reporting highlights how money choices intersect with wider political and economic developments that affect households and investors.
Sanchari Ghosh writes about everyday money decisions, helping readers understand how personal finance works in practice. Coverage includes investing patterns as AI influences behaviour, capital movement into decentralised ecosystems, and the operation of DLT, DeFi protocols, and crypto markets. The focus stays on how assets are managed, traded, and valued within these technical frameworks, and how such trends might shape the future structure of money systems.
Along with tracking personal finance, Sanchari Ghosh explains immigration-related matters such as visas, passports, overseas financial planning, and challenges Indians face while moving abroad. Work in international politics examines contemporary and historical conflicts and how state decisions affect economies and markets. This combined lens links geopolitical shifts with individual financial choices and the Income Tax Return backdrop.
Sanchari Ghosh began a career as a desk editor, building skills in clear news writing before naturally focusing on personal finance. Before joining Mint in 2020, Sanchari Ghosh worked at DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. Living independently in cities such as Delhi, Mumbai, and Pune added real-world experience with managing money, further informing coverage.
Across this work, Sanchari Ghosh emphasises accuracy, intellectual rigour, and fairness. An English Major by training, Sanchari Ghosh also enjoys sports outside the newsroom, regularly playing lawn tennis and squash, and previously competing as a national-level badminton player. Readers looking at income tax questions and Income Tax Return decisions gain context from this mix of professional expertise and personal financial experience.
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