Do I need to file ITR if my tax is zero?
Yes — if your total income crosses ₹4,00,000 (the new-regime basic exemption for FY 2025-26), you must file an ITR even when your tax is ₹0 after the Section 87A rebate.
Zero tax is not the same as zero filing. Income up to ₹12 lakh pays nil tax under the new regime, but the law (Section 139(1)) still requires you to file because your income is above the exemption limit. Last date: 31 July 2026.
Why ₹0 tax still means you must file
Two different limits get confused here. The 87A rebate decides how much tax you pay. The basic exemption limit decides whether you must file. They are not the same number.
- The tax rule (87A): Under the new regime, if your taxable income is up to ₹12,00,000, the Section 87A rebate (max ₹60,000) cancels your entire slab tax — so net tax is ₹0. With the ₹75,000 standard deduction, salaried income up to ₹12.75 lakh can reach zero tax.
- The filing rule (Sec 139(1)): You must file a return if your total income (before 80C/80D and other Chapter VI-A deductions) is more than the basic exemption limit — ₹4,00,000 in the new regime. ₹8L, ₹10L, ₹12L all cross this, so filing is compulsory even at ₹0 tax.
Worked example: ₹12 lakh income, new regime
Take a taxable income of exactly ₹12,00,000 for FY 2025-26. Here is how the slabs and the 87A rebate land you at ₹0 tax — yet still obligated to file.
| Income slab | Rate | Income in slab | Tax |
|---|---|---|---|
| ₹0 – ₹4,00,000 | Nil | ₹4,00,000 | ₹0 |
| ₹4,00,000 – ₹8,00,000 | 5% | ₹4,00,000 | ₹20,000 |
| ₹8,00,000 – ₹12,00,000 | 10% | ₹4,00,000 | ₹40,000 |
| Gross tax (before rebate) | ₹60,000 | ||
| Less: Section 87A rebate (taxable income ≤ ₹12L) | − ₹60,000 | ||
| Health & education cess (4% of ₹0) | ₹0 | ||
| Net tax payable | ₹0 | ||
Net tax is ₹0, but total income (₹12,00,000) is far above the ₹4,00,000 basic exemption — so the ITR is mandatory. Note: the 87A rebate covers normal slab income only. If part of that ₹12L is capital gains taxed at special rates, the rebate does not shield it.
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Which form — ITR-1 or ITR-2?
Zero tax does not change which form you file. It depends on your income sources:
Frequently asked questions
Do I need to file ITR if my income tax is zero?
Yes, in most cases. Filing is mandatory under Section 139(1) if your total income (before deductions) exceeds the basic exemption limit — ₹4,00,000 under the new regime for FY 2025-26. Your tax may be ₹0 after the 87A rebate, but the return is still required.
What happens if I skip filing even though tax is zero?
Missing the 31 July 2026 deadline can mean a late fee under Section 234F (up to ₹5,000; ₹1,000 if income is ≤ ₹5 lakh), loss of loss-carry-forward, delayed refunds of any TDS deducted, and possible department notices.
Is income up to ₹12 lakh really tax-free?
Yes, under the new regime for FY 2025-26 the Section 87A rebate makes tax ₹0 on taxable income up to ₹12 lakh. With the ₹75,000 standard deduction, a salaried person earning up to ₹12.75 lakh pays nil tax. The rebate does not cover special-rate income like capital gains.
When is the last date to file for FY 2025-26?
31 July 2026 for individuals not requiring an audit (AY 2026-27). A belated return can be filed afterwards with a late fee.
Figures verified for FY 2025-26 (AY 2026-27) against the Income Tax Department (incometax.gov.in) and PIB. This page is general information, not individual tax advice. Confirm specifics for your case or ask our CA.