As the income tax return (ITR) submission deadline nears, which was extended until 15 September 2025 for assessment year 2025-26, several individuals with no taxable income are questioning and wondering if filing in their case is at all required?
The answer to this problem is simple, submitting your ITR provides crucial long term benefits even when your total tax liability is zero. Further, filing your ITR ensures smoother personal loan approvals, quicker refunds, and stronger financial credibility. It also helps avoid tax scrutiny and secures access to government benefits and schemes.
According to government data, India recorded over 9.19 crore ITR filings in FY 2024–25. This was a clear reflection of growing awareness and sensible financial behaviour. In comparison, only 6.72 crore ITRs were filed in FY 2020–21. This consistent rise highlights the increasing importance of voluntary compliance, even among taxpayers with nil liability.
- Claiming tax refunds
In case tax was deducted at source (TDS) for example, if you received dividend income from equity market investments in stocks or paid advance tax, then the only way to claim a refund is by filing an ITR. Once you submit your income tax return following the directions of the income tax department as provided on their official website, only then will the process of initiating your refund will begin. - Carry forward capital losses
Filing your ITR permits you to carry forward your short or long term capital losses. These losses can help you in reducing your future tax outgo on gains due to adjustments. Further, if you consistently file your income tax for a decade this can even help you in boosting your credit profile, credit score and showcase responsible financial management. - Proof of income and legal compliance
Freelancers, gig workers, retirees can use the ITR as official income proof for documentation, tender applications, or even subsidy eligibility. The ITR hence acts as a crucial documentation to establish income proof. It is also a clear demonstration of tax compliance with Indian laws reinforcing the credibility of a taxpayer in official and financial matters.
Why filing for FY 2024–25 matters more than ever?
For the assessment year 2025-26, submitting your ITR is not just about tax, it is about being financially proactive. With digital records, easier e-filing portal and updated ITR application forms, staying compliant helps in building a strong financial foundation.
Therefore, whether you are claiming refunds, applying for government schemes and benefits or even future proofing your credit profile, on time filing remains indispensable, even with no tax dues.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Readers are advised to consult a qualified tax professional or financial advisor for personalised guidance based on their individual income and filing status.