Filing a nil ITR: 6 unexpected benefits from getting a travel visa, loan, scholarship & more

• by Vaibhav
• Updated: July 15th, 2025

Filing an income tax return (ITR) offers several advantages.

If your total income for the financial year 2024–25 (assessment year 2025–26) is below the basic exemption limit, or you haven’t engaged in certain specified transactions, you are not obligated to file an income tax return (ITR). However, if your income crosses the exemption threshold, filing an ITR becomes compulsory.

A Nil ITR refers to an income tax return filed when no tax is due. According to Ankit Jain, Chartered Accountant and Partner at Ved Jain & Associates, this usually happens in two cases:

• Either the person’s taxable income is below the legal exemption limit,
• Their income is above that limit but they don’t owe any tax because of available deductions or a rebate under Section 87A.

When you submit an Income Tax Return (ITR) even though it's not legally required, or to claim a rebate under Section 87A, it is referred to as a 'Nil ITR.' This means no tax is payable after filing. For the financial year 2024–25 (assessment year 2025–26), the basic exemption limit is ₹2.5 lakh under the old tax regime and ₹3 lakh under the new regime for individuals under 60 years of age.

For individuals who are not required to undergo an income tax audit, the last date to file the ITR for the financial year 2024–25 (assessment year 2025–26) is July 31, 2025. If your total income is within the basic exemption limit, there will be no penalty or late fee charged by the Income Tax Department for filing after the deadline.

How filing an ITR can benefit you in areas like travel visas, loans, and more

According to experts, even if you’re not legally required to file an Income Tax Return (ITR), doing so—especially filing a Nil ITR—can be highly beneficial. Filing an ITR can support applications for visas, loans, and offer several other advantages. Here’s a look at some key benefits of filing your return.

Easier Travel Visa Approval:

Filing income tax returns (ITR) can greatly improve your chances of getting a travel visa. According to Swapnil Bhaskar, Chief of Strategy at Niyo, ITR serves as valid proof of income, which is why many embassies request ITRs for the past three years to assess the applicant’s financial history and stability. Regular ITR filing also shows financial responsibility and strong ties to India, lowering the risk of visa overstay. In some cases, embassies also view consistent ITR filing as a sign of being a law-abiding citizen, which boosts the applicant's credibility and increases the likelihood of visa approval.

Easier Access to Scholarships:

For certain scholarships, applicants must show that their family income is below a specified limit. In such cases, if the student and their family have filed ITRs—even when their income is below the basic exemption—it can support the application by serving as official proof of income, improving the chances of approval.

Scholarships Linked to Income Proof – A Practical Example:

For instance, under the West Bengal government’s Kanyashree Prakalpa scheme—which promotes girls’ education—only students whose family income is ₹1.2 lakh or less per year are eligible. Many other central and state-level scholarships also use family income as a key criterion. Filing an Income Tax Return (ITR), even if no tax is due, provides an official record of income. “ITRs serve as proof of annual income and can significantly support your scholarship application,” says Alay Razvi, Partner at law firm Accord Juris.

Carry Forward Losses for Future Tax Relief

One of the key benefits of filing an Income Tax Return (ITR) is the ability to carry forward certain losses to offset future income. “Even filing a nil ITR enables individuals to take advantage of this provision,” explains chartered accountant Jain. For instance, capital losses can be carried forward for up to eight years and set off against capital gains in future years. This strategy helps reduce future taxable income, serving as an effective tax planning tool.

Gifts and Asset Transfers: Why ITR Filing Matters

Filing an ITR also acts as an official record of income or assets acquired in a given year. This becomes particularly important in cases involving gifts, including immovable property.

While gifts from specified relatives are exempt from income tax, it’s still advisable to declare them in your ITR. Doing so helps avoid legal or tax-related complications later—especially when the gift is traceable through a bank transfer or registered property deed. A declared ITR ensures transparency and helps prevent disputes or scrutiny in the future.

Easier Loan Approvals with Filed ITRs

Income Tax Returns play a crucial role in securing loans—especially high-value ones like home or business loans. While salary slips and employer letters suffice for basic income verification, large loan amounts demand deeper scrutiny. In such cases, banks look at multiple years of filed ITRs to assess income consistency and financial stability. For self-employed individuals, ITRs often serve as the primary income proof, offering a government-certified document that’s more reliable than self-declared statements. Regular ITR filing reflects financial discipline, which lenders view favorably during credit evaluation.

Claiming TDS Refunds

Tax Deducted at Source (TDS) applies to various transactions—like interest earned on fixed deposits above a set limit, or rent received exceeding ₹50,000 per month. If excess TDS has been deducted, filing an ITR is necessary to claim a refund. Without submitting an ITR, eligible individuals won’t be able to recover the deducted amount, even if they qualify for a refund.

Disclaimer: The views and information shared here are for general awareness only. Please seek professional advice before making any financial or legal decisions.