NIL Returns

April 11, 2025 by Team Instabizfilings

What is a NIL Return?

Taxpayers who complete NIL returns need to file when they have no taxable business activities during a particular period. Tax regulations require filing NIL returns regardless of sales and purchases made or tax payments needing to be reported which helps prevent penalties.

When Should You File a NIL Return?

A taxpayer must file a NIL return if:

Throughout the period the organization conducted no transactions involving sales or purchases.
No taxable transactions occurred.
There is no tax liability to be paid.
The taxpayer is registered under GST, Income Tax, or TDS/TCS but has no financial activity.

Types of NIL Returns in India

GST NIL Returns

Under the Goods and Services Tax (GST) regime, registered taxpayers must file returns regularly, even if there is no business activity.

Who Needs to File GST NIL Returns?

Businesses registered under Regular GST who had no sales, purchases, or tax liability.
Composition Scheme taxpayers with no transactions in a quarter.
Taxpayers registered under the GST Quarterly Return Monthly Payment (QRMP) Scheme with no taxable transactions.

Types of GST NIL Returns

GST Form	Description	Due Date
GSTR-1	NIL return for sales (outward supplies)	11th of the following month
GSTR-3B	NIL summary return for tax liability	20th of the following month
GSTR-4	NIL return for composition taxpayers (quarterly)	30th April of the following financial year
GSTR-9	NIL annual return for taxpayers with no transactions	31st December of the following financial year

The Process to Submit GST NIL Return through the Online Platform

Login to the GST portal (www.gst.gov.in).
Navigate to the Returns Dashboard.
Select the Return Type (GSTR-1, GSTR-3B, GSTR-4, etc.).
Click "NIL Return" (if eligible).
Send the return for approval by using Digital Signature Certificate or an OTP authentication process.

Penalty for Late Filing of NIL GST Returns

The penalty for late submission of nil GST returns consists of ₹20 per day (composed of ₹10 each for CGST and SGST) yet it may not exceed ₹500 for a given return.
Failure to file NIL returns might result in Input Tax Credit (ITC) being blocked for businesses.

Income Tax NIL Returns

If an individual or business does not have taxable income but wants to remain compliant, they can file an Income Tax NIL return.

Who Can File Income Tax NIL Returns?

Individuals with income below the taxable limit.
Salaried individuals with zero taxable salary (due to exemptions or deductions).
Businesses and freelancers with no revenue in a financial year.
Companies with no operations but registered under Income Tax.

How to File Income Tax NIL Return Online?

Visit the Income Tax e-Filing Portal (www.incometax.gov.in).
Login using PAN and password.
Select ITR Form (ITR-1, ITR-2, ITR-3, etc.).
Enter zero income details in relevant sections.
Verify & Submit using OTP, DSC, or Aadhar verification.

Penalty for Not Filing Income Tax NIL Return

No penalty if income is below taxable limits.
If a taxpayer earns taxable income later, past non-filing may trigger an Income Tax Notice.

NIL TDS & TCS Returns

TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) deductors must file quarterly NIL returns if no tax was deducted or collected.

Who Should File NIL TDS/TCS Returns?

Employers and businesses who did not deduct TDS/TCS in a quarter.
Entities with a TAN (Tax Deduction and Collection Account Number) but no transactions.

How to File NIL TDS Return?

Login to the TRACES Portal (www.tdscpc.gov.in).
Select "File Return" under TDS/TCS section.
Enter zero values for TDS/TCS deductions.
Submit and verify using digital signature.

Penalty for Non-Filing of NIL TDS Returns

No penalty for NIL returns.
The tax authority will issue a notification to such taxpayers who do not file their tax returns on time.

Benefits of Filing NIL Returns

Avoids penalties and legal issues.
The maintenance of business records through filing becomes crucial since it assists financial and tax evaluation activities later on.
Non-filing activities continuously result in GST Registration deactivation.
Damaging loan applications – Financial institutions frequently request filed returns during their approval process.
Tax compliance remains facile when no tax notices arise because of proper tax oversight procedures.

Conclusion

Failure to submit NIL returns represents a regulatory obligation that affects registered organizations and individuals in Income Tax and GST as well as TDS/TCS systems. Businesses and individuals must submit NIL returns since the process guards against penalties while upholding operational compliance and functional tax documentation.

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same.

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.