For the financial year 2025-26, many taxpayers may find their income below the taxable threshold due to various deductions and lower earnings. Despite having no tax liability, filing a nil Income Tax Return (ITR) is a strategic decision that offers several advantages. Firstly, it establishes a formal record of income with the Income Tax Department, which is essential for maintaining consistency and legal compliance. In an era of increased digitisation and data tracking, filing an ITR helps prevent discrepancies and scrutiny from tax authorities. Additionally, taxpayers may still have Tax Deducted at Source (TDS) on interest or dividends, and filing an ITR is necessary to claim refunds for these amounts. Furthermore, banks and financial institutions often request ITR documentation as proof of income, making a nil return valuable for securing loans and credit. Regular filing also enables individuals to carry forward losses from previous years, aiding in future tax adjustments. Overall, filing a nil ITR not only enhances credibility and accountability but also strengthens financial documentation for personal loans, travel, and investments.