There are lots of benefits of filing income tax return on time and every year. but, there are people out there who think filing income tax returns – ITR is not mandatory and cut it off their to-do list as they find it unnecessary and time-consuming. However, it is very important for you to file your taxes. Filing your taxes is just not a statutory duty but it is one of those moral and social duties that every citizen of a country should take care of rather as a responsibility.
What is Income Tax Return – ITR
ITR is stand for income tax return which is a declaration/ information given by assessed to income tax department for his/her income in a specified formation called ITR1, ITR2, ITR3
Filling of ITR is a declaration that you have earned income to government and tax on that income have been duly deposited or submit.
Generally a question arise that if a person income is not exceeds to maximum not chargeable to tax is in benefit of assesse.
Sometime when a customer required loan, credit cards or credit worthness then ITR also play a vital role. So every assesse even not having income chargeable to tax should also file the return.
Cost of filling of ITR is nil and from the website Official Income Tax India by simple login by using their login ID.
Also Read – Best Tax Saving Investments Tips
What are the Benefits of Filing Income Tax Return
What is the benefit of filing income tax return? This is the first question when a client ram into the office of a CA or Tax lawyer. Generally professionals have predefined answers like it benefits for Loan, CC limit, or being loyal with the govt etc. But do every one of us know what is the RARE benefits of filing Income tax returns regularly i.e. without any gap? Here is the answer of benefits of filing income tax return.
For Loan Purpose:
Having filed the ITR will help individuals, when they have to apply for a vehicle loan (two-wheeler or four-wheeler) or Home Loan. All major banks can ask for a copy of tax returns.
To claim refund:
If you have a refund due from the Income Tax Department, you will have to file returns, without which you will have to forgo the refund. Some taxpayers may be primarily investing through fixed deposit. These Investments 10% of tax is deducted at source called TDS. if you want to save this type of tax you can opt for Tax saving Investments. If the individual’s total taxable income is less than the threshold of Rs 2.50 lakh. They can file returns and claim a full refund.
To carry forward losses:
If you do not file returns, you will not be able to carry forward capital losses (short-term or long-term). If any, in a financial year to be adjusted against capital gains made in the subsequent years. A long-term capital loss in one year can be carried forward for eight consecutive years immediately succeeding the year in which the loss is incurred. Long-term capital loss can be adjusted only against a long-term capital gain in the year. But short-term capital loss (STCL) can be adjusted against long- as well as short-term capital gains.
If you are traveling overseas the foreign consulates ask you to furnish ITR receipt of the last couple of years at the time of the visa interview. Some embassies may ask for ITR receipts of previous three years. While some others may ask for the most recent certificate. This is especially true if you plan to travel to the US, UK and Canada or Europe. Not, so stringent for South East Asia or Middle East. Producing ITR receipts show that one has some source of income in India. Thus, strengthening your case as someone who will not leave the country for good but will return. When traveling to foreign countries. whether on a business or leisure trip. Experts suggest you always carry income-related proofs along with salary slip. Form 16 and ITR receipts. Consulates specify these requirements in most cases.
Buying a high life cover:
Buying life cover of Rs 50 lakh or Rs 1 crore has become commonplace. However, these covers are available against your ITR documents to verify annual income. Life insurance companies especially LIC ask for ITR receipts these days. If you opt to buy a term policy with sum insured of Rs 50 lakh or more. The sum insured one can get with a term cover depends on many factors one of which is the income of the insured.
If one plans to start their business and need to fill a government tender or two for the same. They will need to show their tax return receipts of the previous three to five years. This again, is to show your financial status and whether you can support the payment obligation or not. However, this is no strict rule. It may vary depending on the internal rules of the government department.
Businessmen, consultants and partners of firms do not get Form 16. Hence, ITR receipts become an even more important document. ITR provided their annual income exceeds the basic exemption limit of Rs 2.50 lakh. For all sorts of financial transactions ITR receipts will be the only proof of income and tax payment for the self-employed People.
Income tax returns can serve as proof for Non ECR (Non Emigration Check Required) while applying for passport. The applicant needs to produce a copy of proof of assessment of income tax returns & actual payment of income tax for last one year or income tax statement that is stamped by the income tax authorities.
Undisclosed Foreign Income & Assets
Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 has come into existence wherein any foreign income or assets, which has not been included in your income tax returns, needs to be disclosed & tax has to be paid on the same.
When your fill your ITR consistently this will benefit you in future for Filing Income Tax Return.