As the extended deadline for filing Income Tax Returns (ITR) for Financial Year 2024-25 (Assessment Year 2025-26) approaches (September 15, 2025), many individuals—especially those with income below the taxable threshold or Non-Resident Indians (NRIs) without Indian income—often wonder: “Do I still need to file my ITR?”
The short answer is Yes, and here’s why filing your ITR is crucial even if you have no tax to pay.
The Common Misconception: No Tax = No ITR
Many people mistakenly believe that if their income is below the exemption limit or they have no tax payable, they are not required to file an ITR. However, as per the Income Tax Act, 1961, individuals must file tax returns if their gross total income before deductions exceeds the basic exemption limit.
Exemption Limits for FY 2024-25
- Old Tax Regime
- Below 60 years: ₹2.5 lakh
- Senior Citizens (60-80 years): ₹3 lakh
- Super Senior Citizens (80+ years): ₹5 lakh
- New Tax Regime (Default Regime)
- ₹3 lakh for all individuals
Even if your income becomes non-taxable after deductions or rebates, the requirement to file ITR may still apply based on your gross income.
When You Must File ITR Even With No Tax Payable
1. To Claim TDS Refunds
If tax has been deducted at source (TDS) from your income, the only way to claim a refund is by filing your ITR.
Example:
Mr. A earned ₹2.4 lakh from pension and fixed deposits in FY 2024-25. Despite being below the exemption limit, his bank deducted ₹6,000 as TDS on FD interest. Filing an ITR is the only way for him to claim this refund.
2. To Carry Forward Capital Losses
If you’ve incurred a capital loss, such as from selling shares or mutual funds at a loss, filing your ITR within the due date is essential to carry forward those losses. These can be adjusted against future capital gains, reducing your tax liability later.
Note: Under the new tax regime, carrying forward losses from house property is not permitted.
3. Mandatory Reporting of Foreign Assets
Individuals classified as Resident and Ordinarily Resident (ROR) in India must disclose their overseas assets under Schedule FA in the ITR, irrespective of their income level.
This includes:
- Foreign bank accounts
- Investments in foreign companies
- Overseas ESOPs from your employer
- Immovable property abroad
Example:
If Mr. A and his spouse jointly own property abroad, both are legally required to report this in their respective ITRs, even if they have no income from that property.
Failure to report foreign assets may lead to heavy penalties under the Black Money Act, 2015, and in severe cases, prosecution.
Global Information Sharing Makes ITR Filing More Critical
Due to global agreements like the Common Reporting Standard (CRS), Indian tax authorities receive data on foreign bank accounts, investments, and transactions. Non-disclosure of such assets or avoiding ITR filing may result in scrutiny, notices, and penalties.
Expanded List of Situations Where ITR Filing Is Mandatory Under Section 139(1)
You are required to file an ITR even if your income is below the exemption limit, in the following situations:
✅ Deposits exceeding ₹1 crore in aggregate in current accounts with banks or co-operative banks
✅ Expenses over ₹2 lakh on foreign travel for self or others
✅ Electricity bills exceeding ₹1 lakh in a financial year
✅ Holding foreign assets, being a signing authority for a foreign account, or being a beneficiary of foreign assets
✅ Claiming exemptions on capital gains under sections 54, 54B, 54EC, or 54F of the Income Tax Act
ITR: Your Financial and Legal Passport
Your ITR is more than a tax document—it’s your financial identity. It plays a crucial role in:
1. Visa Applications
Many embassies, including those of the US, UK, Schengen countries, and Canada, often require ITRs for the past 2-3 financial years to process visa applications.
Example:
Priya, a freelancer earning ₹2 lakh annually, skipped ITR filing. Later, her Schengen visa application was delayed because she couldn’t provide ITRs, even though her income was below the taxable limit.
2. Loan Applications
Banks and NBFCs often ask for ITRs when evaluating your eligibility for home, car, or personal loans. Even if your bank statements look healthy, missing ITRs can affect your credibility.
Key Takeaways
✔ Filing ITR is essential to claim tax refunds
✔ It enables you to carry forward capital losses
✔ Mandatory to report foreign assets for ROR individuals
✔ Required in high-value transactions, irrespective of income
✔ Crucial for visa, loan applications, and building financial credibility
Conclusion
Filing your ITR is not just about meeting tax obligations—it safeguards your financial interests, builds credibility, and keeps you compliant with global and domestic tax regulations.
Whether you are a retiree with TDS deductions, a salaried employee with foreign ESOPs, a homemaker with overseas accounts, or someone planning to travel internationally, filing your ITR is a wise and necessary step.
Evaluate your situation carefully and ensure timely ITR filing for FY 2024-25 to stay on the right side of the law.