ITR Filing FY25: Should Students and Unemployed Individuals File ITR?

As the tax filing season for FY25 begins, a common question arises should students or unemployed individuals bother filing an income tax return (ITR) when they aren’t earning much, or at all?

While filing may not be legally required for everyone, there are still compelling reasons why it might be a smart financial decision. Let’s break it down.

Is Filing ITR Mandatory for Everyone?

Not necessarily. If your total income is below ₹2.5 lakh under the old tax regime or ₹3 lakh under the new tax regime, you are not legally required to file an Income Tax Return (ITR). This typically covers students and unemployed individuals who have little or no taxable income.

However, just because it's not required doesn't mean it's not worthwhile.

Potential Use Cases for ITR Filing

Even without taxable income, filing ITR offers several practical benefits:

• Proof of Income: Filing ITR provides official documentation of your income, which is often needed for applying for education loans, scholarships, visas, or certain jobs.
• Claiming Tax Refunds: If tax was deducted at source (TDS) on income from fixed deposits, freelance work, or any other source, you can only claim a refund by filing your ITR.
• Facilitating Large Transactions: Planning a major financial transaction like depositing ₹50 lakh or more into your account? Past ITR filings can support your financial position in case of scrutiny.
• Carrying Forward Capital Losses: If you’ve incurred losses from investments like stocks or mutual funds, you can carry forward those losses for up to 8 years provided you file your return.

What ITR Filing Can Reflect for Students?

Filing ITR helps establish your financial footprint early in life. This can make it easier to:

• Access loans or financial aid
• Apply for overseas education or work opportunities
• Prove financial responsibility in various situations
• Build a credible financial history over time

Read More: ITR Filing 2025 Why Filing A Nil Income Tax Return Matters.

Conclusion

For students and those without regular income, ITR filing may not be mandatory, but it can provide real advantages. From building credibility to claiming refunds and preparing for future financial needs.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.