Benefits of Income Tax Return (ITR) Filing
March 31, 2021
Income Tax Return or ITR is an annual online activity that needs to be filed by every responsible Indian citizen - it keeps the record of your income and taxes that you are liable to pay during a year. Here are some benefits of filing ITR.
An ITR gives information about your yearly income and tax liability to the Income Tax Department. In fact, it is a mandatory activity that every citizen should do if, your gross annual income is more than the basic exemption limit, you have more than one source of income, you want to claim a tax refund, you wish to apply for a visa or loan, among others. Keeping aside the compulsion for ITR filing, an ITR receipt can be actually beneficial in many ways.
Listed below are the benefits of filing ITR:
- Easy loan approval: ITR filing can help you get easy approval on loans like Personal Loan, Car Loan, home loan etc. At the time of loan processing, lenders always ask borrowers to submit ITR documents of the last three years. This enables the banks to know your income stability, which thereby helps in quick sanction
- One of the best options for address and income proofs: If you do not have proper address proof when you apply for a loan or any other facility, an ITR document will save you from the hassle. In fact, you can also submit it as proof of income. So, be sure to preserve your ITR receipt as a proof of your income and paying regular taxes
- Quick Visa processing: When you’re applying for a Visa, embassies of countries like the United States, United Kingdom, Australia, Canada ask for ITR receipt of the past three years. Visa processing requires you to be tax compliant as it gives them an assurance of your income and ability to manage expenses on your trip
- Claim tax refund: One of the biggest benefits of ITR filing is you get to claim a tax refund.. If you have made investments in tax saving instruments and have paid more income tax, you are liable for a tax refund
- Compensate for losses: As per the income tax laws, individuals cannot carry forward losses faced in the current financial year to the next financial year. Hence, it is important to file an ITR on time
Benefits of filing income tax return should not be taken for granted. If you are not filing or there is a delay, a tax officer has the right to impose a penalty of up to Rs 10,000. In case you’re delaying it, you are required to pay interest. Typically, an ITR should be filed by July 31st of any year. Make sure you file it before the assessment year in order to avoid penalties of any kind and reap the above benefits.
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