Once in a year, you must come across the term Income Tax Return. And you start wondering "Whether should I file my income tax return or not?" It is also a valid question if your income doesn't fall under the tax exemption category. However, whether your income falls under the income tax category or not, you should file your Income Tax Return on time as it has many benefits for you.
Income Tax Filing
Some people are required to file income tax returns. Individuals in India are only required to file tax returns if their taxable income exceeds Rs 250,000.Individuals and businesses can avoid costly fines by reporting ITR on time.
If the yearly revenue is less than Rs 5 lakhs, the IT Department imposes a Rs 1000 fine. Otherwise, the fine might be as high as Rs 10,000.
Individuals who pay more than Rs 100,000 for electricity use or who spend more than Rs 200,000 on overseas trips must also file a tax return. The benefits of filing ITR on time are as follows:
There is the consequence of filing a late ITR! Filing an ITR after the due date issued by the Income Tax Department may result in a penalty of up to Rs 10,000, according to Income Tax guidelines in India.
Carry Forward your losses
Individual taxpayers must file their income tax returns before the due date in order to claim specific losses, such as losses from capital gains, company or profession, and so on. This implies you can deduct some losses from relevant income, which can help you decrease your future income tax bill. This is not feasible unless the income tax return is filed.
Failure to file an ITR on time may result in the imposition of interest on the tax owed. However, pursuant to Sections 234A and section 234B, you can avoid interest on the due tax by reporting your ITR on time. There is no penalty relief for the late submission of ITR.
Easy Loan Approval
Filing the ITR will assist individuals when applying for a vehicle loan, a home loan, and so forth. All banking institutions might request a copy of your tax returns as proof of income. This is a required document for loan approval.
Claim a Tax Refund
Most individual taxpayers with passive income, such as term deposit interest or dividend income, must submit tax returns in order to collect a tax refund. Even for salaried taxpayers who had extra taxes withheld, submitting forms are required in order to obtain a refund of the excess taxes.
The income-tax return is a vital document for the evaluation and approval for numerous purposes. Bankers want copies of tax returns filed when an application for a home or vehicle loan is submitted in order to verify the individual's sources of revenue.
Application for VISA
t the time of visa application, most embassies around the world require you to provide copies of your tax returns for the previous two years. These are among the legally needed documents, thus it is always advised to file your ITR on time.
Serves as Proof of Income
Self-employed taxpayers have no evidence of income, whereas salaried employees obtain a wage certificate in Form 16. Filing tax returns not only allows the individual to claim expenses carried forward in coming years, but it also acts as a record of losses that can be reclaimed in the future.