Filing Zero Returns? CA in Durgapur Finally Answers Your Questions

Paying tax is only for the ones who are eligible/liable for paying taxes. There are certain exemption limits set by the government under which if the income of an individual falls, then he or she is not liable to pay any taxes.

This exemption limit is 2.5 lakhs, and if the income of a person goes beyond this he or she has to pay taxes and is also eligible to file returns with the help of an income tax consultant in Durgapur.

Now, the individuals who do not fall under this bracket, are not liable to pay taxes. However, there are several instances when they are needed to file returns which are known as zero returns. Hence, today this blog is about all the things that you need to know about filing zero returns.

Though it is not mandatory to file a zero return, there are quite a few benefits to it. Let's dive deep into the world of zero return and strengthen your tax-related matters.

 

What is Zero Return Filing?

A zero or Nil return filing is called so when the person filing the return is not liable to pay taxes, but still in order to keep their record of income, they have filed under the guidance of a CA firm in Durgapur.

It is also to declare that the person has not paid any taxes during the financial year. The Income Tax Act of India has stated it is mandatory to file the ITRs even if an individual's income is below the exemption rate. But, for the information Zero or Nil returns can only be filed by people who fall under the exemption bracket.

 

Why should you file a zero return?

Filing a zero-tax return is mandatory as per the Income Tax Act. There are reasons why they have made it so as the income tax consultant in Durgapur. As per them, if the government had set the exemption limit to 2.5 lakhs, and if the individuals below that are not needed to pay taxes, then why again the government is directing to even file a zero return? This is because there are reasons to do so, starting with:

Compliance with the laws: Some of the best chartered accountant in Durgapur says that if the government has stated it is mandatory, and in case you're not filing the zero return, you are not in compliance with the tax laws. Hence, it can result in penalties and fines in the future.

Claiming Refunds: Even if you don't owe taxes to the government, sometimes it's possible that you may be eligible for refunds. These are certain tax credits deductions that may finally result in tax returns.

Preserving Tax Records: It is important to preserve your tax records, even if you have nothing to report. Owners of some of the best CA firm in Durgapur say, that filing a zero return creates a record of your tax compliance, which can be essential for various purposes, such as obtaining loans, visas, or government assistance. It can also be helpful if you are ever audited by the IRS. There are further underlying reasons why you should keep your tax records.

Here are some of them:

• To track your income and expenses
• To claim tax deductions and credits
• To prove your income to a potential employer
• To calculate your net worth
• To plan for retirement
• To file your taxes

The IRS recommends that you keep your tax records for at least three years, but as per the best income tax consultant in Durgapur, it is a good idea to keep them for at least seven years. You should also keep your tax records in a safe place where they will not be lost or damaged.

Maintaining goods standing: If you are a small business owner, always try to maintain your tax records, whether you are eligible or not to pay taxes. Filing returns is the best way to be compliant with tax regulations.

As part of legal requirements: For a business, if you are getting any huge contract from the government, or require any specific permits and licenses to start a new project.

So, these are the points that a renowned income tax consultant in Durgapur suggests keeping in mind and filing zero returns.

 

What are the pros and cons of filing a zero return?

There are both downsides and upsides to filing zero returns. As it is mandatory from the government, that you need to file zero returns, hence, you need to know what advantages and disadvantages you have while filing zero returns.

Pros:

• When applying for a Visa ITR is required even if you are non-eligible to pay taxes.
• As proof of address for passport applications tax return files are required.
• When applying for significant loans ITR is required to ascertain eligibility.
• You are probably aware of the TDS deductions by the bank on deposit interests. Here you can get a refund on the TDS by filing a zero return, suggested by most of the income tax consultant in Durgapur.
• When you invest and suffer a loss in the stock market, this loss can be carried forward and minimize tax liability by filing zero returns.

 

Cons

• Administrative Burden is a major issue in filing tax returns, as it requires quite a good amount of paperwork and administrative effort.

 

• When you file zero returns, the authorities may still review and if there are any discrepancies, you may be subjected to further enquiries. These are the times when a CA in Durgapur can be of great help to you.
• There are no direct benefits like tax refunds or credits for filing zero returns, as you don't owe any tax refunds, since you are not liable to pay taxes.

 

How to submit a zero return file by yourself?

Submitting a zero return file is the same as filing an income tax return. So, you can get help from the tax consultant in the best CA firm in Durgapur. They are well-adapted and can help you file the taxes without any discrepancies.

As mentioned in the cons, if there are any -mistakes in your zero returns, then you may be subjected to further scrutiny. Hence, you can follow this guide, though it is not a detailed one. You can search for a detailed guide for e-filing on Google. Or, the best way is to hire an income tax consultant in Durgapur.

• Enter the details of your income and other details on the tax filing website. The income tax will be calculated which will show that you have no due as you fall under the exemption bracket.

 

• Then submit the return to the income tax department, sending your ITR-V to CPC Bangalore to complete the filing process.

 

Final Thoughts

Most of the adept taxpayers always suggest that you seek guidance from an income tax consultant in Durgapur, to file your taxes accurately. This is because filing taxes and returns requires expert supervision, unless you have done it for a long time making mistakes and learning through them. But, these days you cannot afford to make mistakes, as it can heavily affect your income sources and also your reputation to the tax authorities. If you are looking for expertise in these matters contact a CA firm in Durgapur and get the assistance.