Dear SEO Editor, as an expert in search engine optimization (SEO) at Google, I aim to provide a detailed and comprehensive guide on whether you can file your Income Tax Return (ITR) for the financial year 2020-2021 when you have no income. Here's a step-by-step breakdown on what you need to consider:
1. Filing ITR with Zero Income
Yes, yes, and once again, yes. You can absolutely file your ITR when you have no income. The Internal Revenue Authority in India, the Income Tax Department, allows you to file an ITR even if you have no income. The deadline for filing an ITR is generally by 31st July of the year following the financial year for which the return is being filed, and there is no restriction if you haven't reported any income before. This means you can file for prior years as well, just in case you have any income that was not reported before.
2. Voluntary Nature of Filing ITR
The requirement to file an ITR is voluntary and rests with the individual. The law does not impose any restriction on filing an ITR, as long as your Total Income does not exceed the tax exemption limit. Ponder if you meet any of the criteria mentioned below that mandate the inclusion of 7th Proviso Section 139 (1) requirements before proceeding. Else, you can apply for a nil return by filling out form ITR-1S.
3. Mandatory Filing Conditions (7th Proviso to Section 139 1 of the Income Tax Act 1961)
Under the 7th Proviso to Section 139 1 of the Income Tax Act 1961, you might need to file an ITR if any of the following conditions are met:
3.1 Aggregate of Deposits in Current Accounts
According to this provision, if the aggregate of deposits in your current accounts or any one or more current accounts maintained with banks or cooperative banks exceeds INR 1 crore, you are required to file your ITR under the 7th Proviso to Section 139 1 of the Income Tax Act 1961. This includes deposits via cash, cheque, or online transfer.
3.2 Aggregate of Expenditures on Foreign Travel
If your expenditure on foreign travel (including tours and travels for yourself or others) exceeds INR 2 lakhs, you may have to file an ITR under the 7th Proviso to Section 139 1 of the Income Tax Act 1961. The expenditure on foreign travel must be documented to satisfy the tax authorities.
3.3 Aggregate of Expenditures for Electricity Consumption
An ITR may also be required if you incur an expenditure on the consumption of electricity exceeding INR 1 lakh. This provision covers only the consumption expenditure where electricity is consumed by the person concerned.
4. Other High-Value Transactions and Provisions
In addition to the above conditions, the 7th Proviso to Section 139 1 of the Income Tax Act also applies to any other high-value transactions or conditions that may be prescribed by the Central Board of Direct Taxes.
Therefore, in conclusion, you can indeed file your ITR for the financial year 2020-2021 if you have zero income, as long as none of the above mandatory filing conditions are met. If you do meet any of these conditions, ensure you gather all the necessary documentation before filing your ITR.