Individuals opting to file Income Tax Return online must do so annually with the Income Tax Department. However, not everyone has to file the return. If your previous year’s income exceeds the minimum exemption cap of INR 2,50,000 (only Rupees Two Lakh Fifty Thousand), you are obliged to file the income tax return.
While it is not mandatory for certain individuals to file the Income Tax Return, it should be filed quarterly, because filing offers many advantages.
These are some of the big advantages of filing Income Tax Return-
1. Easy to claim your TDS
TDS means source-deduced at revenue. It is a tax deducted from the income by the individual paying the salary or making another payment related to TDS. During payment, the deductor deducts the tax sum and charges it directly on your behalf to the tax department.
You can get the tax deducted by filing a tax return. If, after filing the tax return, there is no tax balance owed, the entire TDS balance will be refunded.
For those involved in employment with a company and making Rs 2.5 lakh a year or less shall claim TDS from the Tax department. If you are an entrepreneur and need your TDS to be returned to you, you must file an ITR each year.
2. For going out of country
You would like to collect tax returns in order to use a VISA to enter any country. During VISA, ambassadors track income evidence and address private information. Therefore, tax returns are reviewed for revenue and addressed by officials. Therefore, you want to collect your return of tax immediately if you go abroad.
Tax Return post the fiscal year 2017-2018 is mostly filed only during the same taxation year. The tax return of the previous year can not be paid after the top of the assessment year.
3. Required for giant insurance cover
The insurance firms are encouraging you to pay tax returns if you want to use the insurance cover of over INR 50,000 (Rupee Fifty Thousand only). Insurers can determine the exact sum of the premium and insurance from the annual profit and tax returns. Most days, a tax return can be the document required to purchase an insurance cover.
4. Helps in executing financial transactions
Revenue tax Return is mandatory only if financial transactions are performed. Expenses for house, vehicle, mutual funds etc. will need one to file tax returns. Moreover, tax returns are required for some payments for huge investment.
5. Address proof
Income Tax Return also acts as a proof of address proof in many government organisations and agencies and you can use the same as an Address proof in case other documents are not available.
6. Loans and credits
One must have the tax returns of the last 3 years in order to seek a loan. A minimum of three years of tax returns are provided by all banks and lending agencies to provide a private loan. When the application is processed, banks and lending agencies review the income and source reported in order to test the repayment ability of the individual requesting a loan by using the tax return as a yardstick of credibility.
Whether you are applying for a private loan, a home equity loan, or a car loan, you will file a tax return for yourself. You can get a loan from any bank or creditor quite quickly if you also file the tax returns and have a great CIBIL Score. Also banks tend to grant credit cards to persons who file daily returns for tax purposes.
7. Carry-forward of losses
Income tax laws require forward losses to offset them against capital gains only to those who file ITR in the related assessment year. “There are chances that you would have incurred losses for a year. In such a case, you can not stay away from filing your return by claiming that you have income below the exemption cap. Indeed, preferably, you must file your return so that you can carry forward the losses that you have incurred to cover the income of subsequent years.
8. Government tender
Experts claim that if you intend to start your company and need to fill a government offer or two for the same, you’ll need to display your tax return receipts of the past five years. Again, this is to demonstrate your financial position and whether or not you can afford the payment obligation. It can differ depending on the department’s internal laws. Even the number of ITRs can vary.
Conclusion
Filing ITR has therefore, many benefits in lieu of situations that may turn out in future. Also, it is a good financial practice to file ITR from time to time.
