Nil ITR: Why should you file ITR even if you don't fall into income tax bracket? It serves some important purposes

Income Tax Return (ITR) serves as conclusive proof of a person's income. For individuals who work but do not earn enough to enter the tax bracket, meaning they are not required to pay taxes, it is advisable to file an ITR. This filing, even if it's a Nil ITR indicating no taxable income, notifies the tax department that no tax payment was made during the financial year.

While filing a Nil ITR is not mandatory, it can be beneficial because an ITR serves as solid proof of your income. If you haven't filed your ITR yet, understanding its benefits is crucial. File your ITR before July 31 to avail of these benefits.

Easy Loan Approval:

The biggest advantage of filing a Nil ITR is easy loan approval. Nowadays, everyone needs loans for land, business, housing, or vehicles. Financial institutions require proof of income. If you are employed, you can provide salary slips as proof, but if you are self-employed or a housewife seeking a loan, your loan approval will be facilitated if you submit copies of your ITR for the last three years. This acts as conclusive proof of your income.

Ease in Visa Application:

Countries like the USA and some developed Western nations request copies of Income Tax Returns as part of the visa issuance process. Through ITR, they verify the financial status of individuals planning to visit or migrate to their country. Even if you don't earn yourself, copies of your parents' or guardians' ITR can be submitted.

For High-Value Insurance Policies:

When purchasing insurance policies worth Rs 50 lakhs or more, especially term policies in LIC, you are required to show proof of ITR. This ensures that you are eligible for such substantial insurance coverage.

Helpful in Starting a Business:

If you are starting a business and intend to procure contracts from government departments, filing your ITR for the past five years is essential. It demonstrates your financial credibility.

Proof of Address:

Filing Income Tax Returns online is prevalent nowadays. However, if you file manually, the receipt of Income Tax Return sent to your registered address serves as proof of address. Thus, ITR also acts as an address proof.

Filing a Nil ITR isn't mandatory but has numerous benefits. Understanding these advantages can motivate you to file your ITR timely.