ITR Filing 2025: Do Students or Unemployed Individuals Need to File Income Tax Returns?

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by

Himanshu
in

With the Income Tax Return (ITR) filing deadline for FY 2024-25 (AY 2025-26) extended to 31st October 2025, many students and unemployed individuals are wondering whether they need to file returns at all. The answer depends on income level, source of income, and other financial activities.

🔹 Do Students Need to File ITR in 2025?

Yes, in certain cases. While most students don’t have taxable income, there are situations where filing becomes mandatory:

  • Part-Time Jobs / Internships – If income exceeds the basic exemption limit (₹2.5 lakh under the old regime or ₹3 lakh under the new regime).
  • Scholarships – Exempted from tax under Section 10(16). No need to file ITR for this income.
  • Stipends – Taxability depends on whether it is treated as salary (taxable) or scholarship (exempt). Many company-paid stipends are taxable.
  • Investment Income – Interest from bank deposits, dividends, or capital gains (shares, crypto, mutual funds) is taxable if above limits.
  • TDS Deduction – If TDS is deducted on any earnings (e.g., FD interest), students should file ITR to claim a refund.

🔹 Do Unemployed Individuals Need to File ITR in 2025?

Unemployed persons may also need to file ITR if:

  • They Earn from Other Sources – Interest, rent, dividends, or capital gains above exemption limit.
  • Received Severance, PF Withdrawal, or Compensation – Certain payouts are taxable.
  • They Want to Claim Refund of TDS – Banks deduct TDS on FD/interest income even if the person is unemployed.
  • To Carry Forward Losses – If they have a capital loss (like in stocks), filing ITR allows them to carry it forward to set off against future gains.
  • Loan or Visa Requirement – Even with zero/low income, ITR is often required as proof of financial status.

🔹 Income Tax Exemption Limits for FY 2024-25

  • Old Regime: ₹2.5 lakh basic exemption
  • New Regime: ₹3 lakh basic exemption (₹7 lakh effective exemption with rebate u/s 87A)

👉 If a student or unemployed person’s income is below these limits and no TDS has been deducted, filing is not mandatory.

🔹 Benefits of Filing ITR Even If Not Mandatory

  1. Proof of Income for loans, visas, or higher studies abroad.
  2. TDS Refund – Helps reclaim deducted taxes.
  3. Credit Score Improvement – Regular filing supports financial credibility.
  4. Carry Forward Losses – Useful for investors in stocks, crypto, or mutual funds.

🔹 Final Word

For students and unemployed individuals, ITR filing in 2025 is not compulsory unless their income crosses the exemption threshold or TDS has been deducted. However, it is still advisable to file voluntarily as it builds a financial track record and provides legal benefits.

⚠️ Disclaimer: This article is for informational purposes only. Tax laws are subject to change. Please consult a qualified tax advisor or refer to official Income Tax Department guidelines before making decisions.

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