Nil return income tax
A nil income tax return is filed to show the Income Tax Department that the individual fall below the taxable income,
Therefore, did not pay taxes during the year.
Nil return filing is mandatory under the Income Tax Act 1961, for certain types of taxpayers.
By filing a nil return, the taxpayer would declare to the Income Tax Authorities that the taxpayer had
:-no income or activities during the assessment year.
According to Income Tax Act 1961, individual have income more than Rs.2.5 lakhs requires:-
to file income tax return in ITR-1or ITR-2 FORM each year.
Individual should file tax before or on 31st july of every year.
Individual fails to file tax return after 31st july have to pay 5000rs as penalty
and if filed before 31st december have to pay 10000 rs penalty.
The penalty for late filing income tax return is charge with an amount of Rs.1000, if the annual income is less than Rs.5 lakhs.
Individual have less income than Rs.2.5 lakhs in a year are exempt from file NIL return.
However, we recommend that an individual should file NIL return,
even if the taxable income is less than Rs.2.5 lakhs, if he/she had filed income tax return in the previous year.
An individual can file income tax return, even if the taxable income is less than Rs.2.5 lakhs.
Proprietorship, trader or entrepreneurship:-
Bussiness companies should file income tax return under form ITR-3 or ITR-4.
Tax payer want to option for presumptive vacation scheme should file FORM ITR-4.
Proprietorship firms who filed return previously are
recommended to file form-ITR-3 or ITR-4 may if there is no bussiness activity.
proprietorship firms suffering from loss or no revenue or activity have to carry forward as loss have to file nile income tax return.
limited liability partnership (LLP) , a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008.
All LLPs registere’s itself in India requires to file income tax return each year in :-
Form ITR-5 irrespective of business turnover or profit or activity.
If after incorporation a LLP has not commenced any activity, the LLP still require’s to :-
file NIL income tax return and MCA annual return – Form-8 and FORM-11
Failure to file NIL return under Income Tax Act for a company would lead to a penalty of Rs.5000,
if the return is filed before 31st December and a penalty of Rs.10,000 if the return is filed after 31st December.
Will I have to file return for LLP of there is no bussiness activity?
Yes,you have to file NIL return even if there is no revenue or activity in the LLP.
NIL return filing is mandatory even for LLPs who are not a bank account holder’s.
Penalty for not filing nil return
In case a taxpayer who is require’s to file NIL return does not file before or on 31st july
Have to pay penalty of 5000rs and will be applicable from 1st august to 31st december
Penalty will further increased hoti 10000rs if not filed before or on 31st december.
In case a taxpayer has a taxable income of less than Rs.5 lakhs, the penalty is capped at Rs.1000.
Nil return income tax:-
As explained in this article, NIL return filing under Income Tax is mandatory for all types of business entity even if there is
no activity or if business has not commenced.
In case of individuals as well, it is recommended that they file NIL return for income tax,
even if they have a taxable income of less than Rs.2.5 lakhs per annum once they have began filing income tax return.
-BY COMPANY VAKIL LEGAL BLOG INDIA