No Tax? Why Filing ITR is Still Important for Every Indian

Sep 7, 2025

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Many people in India assume that if their income is below the taxable limit, they don’t need to file an Income Tax Return (ITR). While technically correct, skipping ITR filing can mean missing out on several important financial and legal benefits. Even if you pay zero tax, filing ITR is a smart financial habit that helps you in the long run.

Who is Exempt from Paying Income Tax?

As per the new tax regime (FY 2025-26, AY 2026-27):

Age Category	Basic Exemption Limit (No Tax Payable)
Individuals below 60 years	₹3,00,000
Senior Citizens (60–80 years)	₹3,00,000
Super Senior Citizens (80+)	₹5,00,000
After Rebate u/s 87A	Income up to ₹7,00,000 = No Tax

This means, if your total income is below the above limits, you won’t pay tax. But does that mean you should ignore filing ITR? The answer is No!

Why File ITR Even with Zero Tax?

1. Proof of Income

Your ITR acts as a legal proof of income. This is especially useful when applying for:

Loans (home loan, car loan, personal loan)
Credit cards
Visa applications (many countries ask for 2–3 years ITR copies)

2. Claiming Refunds

Sometimes TDS (Tax Deducted at Source) is deducted from salary, bank FD interest, or freelance income. Without filing ITR, you can’t claim this refund.

3. Carry Forward of Losses

If you incur losses in business, stock market, or property, filing ITR is mandatory to carry forward those losses and set them off against future profits.

4. For Government Tenders & Contracts

If you are a freelancer, contractor, or running a business, many government and corporate contracts require ITR as part of eligibility.

5. Building Financial History

Just like a credit score, regular ITR filing builds your financial credibility and ensures smooth future transactions.

6. Avoiding Notices

Even if your income is below taxable limits, but your high-value transactions (FDs, mutual fund investments, property deals) reflect in Form 26AS or AIS, the Income Tax Department may question you if you don’t file ITR.

Example Scenarios

Person	Income	Tax Liability
A young professional earning ₹6,80,000	Nil (Rebate u/s 87A)	Needed for home loan eligibility
A student earning ₹2,90,000 from part-time job	Nil	Proof of income for visa
A senior citizen with ₹4,50,000 bank FD interest (TDS deducted)	Nil (after rebate)	Can claim TDS refund
A trader with ₹2,00,000 loss in shares	Nil	Can carry forward loss only if ITR filed

Conclusion

Even if your income is not taxable, filing ITR is not a waste of time—it’s an investment in your financial future. It helps you build credibility, claim refunds, and stay on the right side of tax laws.

👉 Bottom line: No tax doesn’t mean no ITR! File it for peace of mind and long-term benefits.