Income Tax Return (commonly referred to as ITR) is a self-declaration made by the taxpayer regarding his/her income, deductions, and tax payable. As per the law, it is mandatory to file an ITR if your annual income exceeds 2.50 lakh.
But due to ignorance and less awareness about the benefits of filing ITR, people fail to furnish their ITR. So we thought it’s better to help you understand its usefulness.
Time and again we come across people who ask us “What are the benefits of filing an ITR other than to stay compliant?” In this piece of information, we will be explaining many benefits of filing ITR that are often overlooked by taxpayers!
If you too are intrigued by the same question, this article will help you understand the benefits of ITR filing clearly!
Let’s get going!
Benefits of filing ITR
• No penalties!
Nobody likes to pay penalties! So if you want to avoid a hefty penalty, it is crucial that you file your ITR on time. As per the Government’s mandate, from FY 2017-18, any taxpayer, whose income is above 5 lakh and fails to file ITR, can attract a penalty of INR 10,000!
Even if your income is below 5 lakh, and you fail to file your ITR on time, the penalty is 1,000. So it’s better to be a responsible citizen file your ITR.
• Helps you carry forward the losses
If your ITR is not filed on time, you cannot carry forward your losses as per the Income Tax law. So you cannot set off your current losses against your next year’s income, and you will have to pay more tax next year.
So to claim the current losses, it’s mandatory that you file your ITR on time. By claiming the current year’s losses in the next financial year, you can drastically reduce your taxable income.
• Helpful in getting a bank loan
From the financial point of view, ITR is considered as the most authentic document. Due to such importance, every Bank and Non-banking institutes demand ITRs for the past three years when you want to avail loans from them.
If your ITR filing cycle fails even once, you again have to file three ITRs consecutively to avail of the loan. This will take three years, and your loan availing process might get delayed.
• Mandatory to claim TDS
Without filing ITR, you cannot claim your TDS (Tax deducted at Source). Especially in the case of bank FDs, you will have to fill form 13 and submit it in the branch. Moreover, if you fail to file ITR on time, you will be losing all the money that you paid in the form of TDS.
If you file ITR on time and your income is below the threshold, you will get a full TDS refund. And even if your income is above the threshold, you can avail of the excess amount.
• Helps in getting Visa
Tax compliance and regularity in filing ITR is the crucial factor that is used by many developed countries to process your Visa application. ITR acknowledgment is treated as a valid document of your compliance and ascertains that you are a responsible citizen, who complies with the existing rules and regulations of the country.
Overall, whatever your business or job is, filing ITR on time is always beneficial to you. Moreover, Income Tax is the crucial Source of income for the nation. The tax you pay is utilized in a productive way for the upliftment of the country and people. So as a law-abiding citizen, it’s your duty and responsibility to file your ITR on time.
The due date for filing the ITR is approaching, and hence we would like to advise you that you should file ITR at your earliest behest.
As the final date will approach, more people will start filing their ITR, and hence the system might face some issues.
To avoid any last-minute hassles, talk to our ITR experts, and they will help you out by optimizing your tax and staying compliant with the law!
For more details, feel free to reach us!