In recent times most of us have a common belief that if our salaries don’t come under the income tax slab, then there is no such need for filing an income tax return. However, as said earlier, it is truly a misconception one shouldn’t fall prey to. Filing an income tax return is propitious in every possible way. Also, individuals having an annual income of more than the basic exemption limit of Rs 2.5 lakh must file their income tax returns in due time.
Even for the ones who are exempted, filing an income tax return will stand beneficial always. An income tax return is a form with which a taxpayer reports about the details of his/her income, exemptions, taxes, and other deductions. Keeping the income tax slab in mind, filing an ITR is a mandatory prerequisite for claiming their deducted taxes under section 80C, 80D, and various others. Doing so will almost bring the taxable income down to zero.
Moving on to the next part, and talking about the benefits one gets while filing their income tax returns will be discussed and stated in the article below. Here you will come across six such amazing benefits an individual gets as soon as he/she files her income tax return within a suitable time frame.
File Income Tax Return to Deviate Unnecessary Penalties
The same is effective from the financial year 2017-18, where the income tax department taxes a penalty of Rs 10,000 for those who don’t file their income tax return under section 234F. Hence, filing the income tax return within the due time evades the misfortune of facing such a penalty. The penalty at the same time is Rs 1,000 for those whose annual income is not more than Rs 5 lakh. But, then again, being a responsible law-abiding citizen, it is of utmost importance from your side to file your return under the income tax slab you fall in within due time.
Makes the Bank Loan Documentation Process Hassle-Free
If you are sincere enough and file your income tax returns in due time, then it makes a lot easier for the banks to sanction the loan you are looking for. It is so because when you file your ITR under your income tax slab rate, it becomes easier for the financial institutions to assess, evaluate your source of income, financial capabilities, and various other nomenclatures. Hence, all these banks normally ask you for a copy of your income tax return file for a previous couple of years to determine your income capacity and sanction you a loan that is going to be just appropriate.
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ITR Receipt is a Viable Document
As long as filing income tax returns is beneficial in so many ways, the ITR receipt also makes up a very important document. One should store their ITR receipts safely as it portrays the detailed proof of your income and the payment of your taxes. The receipt is much more detailed than Form 16 itself, as it constitutes of total income details and income from various other sources.
ITR Receipt Assists in Easier Visa Processing
The third benefit of filing an income tax return on time will be easier and hassle-free visa processing. Embassies of evolved nations like Australia, Canada, the United Kingdom, and the United States ask you for your income tax return receipt. The case here is also similar to the bank’s loan approval case. They will be asking you for your ITR for the past couple of years and will be extremely particular about your compliance policy with your country’s income tax slab. Hence, having an ITR receipt will help you fetch the Visa you have been looking for. Also, at the same time, they will come across your income capacities and whether you are capable enough to pull off the expenses of the trip you are planning.
Compensate Losses in the next Financial Year
Any taxpayer can never forward the losses he/she faces in the current financial year to the next one until and unless an income tax return is filed. The same falls under the income tax law of our country, and no one can carry forward losses and settle them in the next year unless the ITR is filed within the said date. Besides that, it is of utmost importance to file your income tax within due time to get hold of your losses in the upcoming years.
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Avoid Paying Extra Interest
If one is not filing his/her income tax return on time, then the same could lead to paying an extra interest of 1% per month for the remainder of the tax payable by him/her. Let’s say that the banks would deduct a certain amount of tax with interest from the fixed deposits you have. Hence, to avoid all such extra interests, one must file the ITR within the due date.
As you came across the article, you have somehow realized the importance of filing income tax returns under your income tax slab. Apart from that, you also got to know about all the benefits filing income tax returns on time has got to offer.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.