Benefits Of Filing Income Tax Returns


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7/25/2020 Benefits Of Filing Income Tax Returns | by India Tax | Jul 2020 | Medium 1/4 Benets Of Filing Income Tax Returns India Tax Jul 24 · 4 min read Individuals whose annual income is in excess of the basic exemption limit of Rs 2.5 lakh must mandatorily file their income tax returns. Even when there is no tax liability an income tax return ITR must be filed if the total income exceeds the above- mentioned threshold. ‘Income tax return’ is a form in which taxpayers declare details of income deductions exemptions and taxes payable on their taxable income. Filing income tax returns is mandatory to claim tax deductions under Section 80C 80D etc. and other eligible exemptions like long-term capital gains exemptions which may eventually bring your taxable income to zero.

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7/25/2020 Benefits Of Filing Income Tax Returns | by India Tax | Jul 2020 | Medium 2/4 Filing ITR not only keeps you tax-compliant but also offers the following benefits: 1. Filing ITR avoids penalties Effective from FY 2017 –18 the Income Tax Department levies a penalty of Rs 10000 under section 234F on individuals who do not file their income tax return. Filing ITR on time avoids unnecessary penalties. Even though the penalty has been kept at Rs 1000 if your annual income is not more than Rs 5 lakh as a law-abiding citizen it is your duty to file your tax returns. 2. ITR receipt is a very important document You need to preserve ITR receipts carefully as they are very important proof of your income and of payment of your taxes. It is much more detailed than Form 16. It contains your total income details and has details of your income from other sources. 3. ITR receipt is a useful document for hassle-free processing of bank loans Most banks and NBFCs ask for ITR receipts of the latest three years when you apply for high-value loans like home and car loans. Lenders consider ITR as the most authentic document supporting an individual’s income. Hence you should regularly file income tax returns if you are planning to avail home or car loans in the future.

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7/25/2020 Benefits Of Filing Income Tax Returns | by India Tax | Jul 2020 | Medium 3/4 4. Visa processing Embassies of developed countries like the United States United Kingdom Canada and Australia ask for ITR receipts of the past years to process your visa application. They are very particular about your tax compliance and hence you are asked to furnish past ITR receipts. This helps them assess your income and ensure that you are able to take care of the expenses on your trip. 5. Compensate losses in the next financial year Individuals cannot carry forward losses of the current financial year to the next financial year until an ITR is filed. As per the income tax law individuals are not allowed to carry forward losses and set them off against future years’ income if the ITR is not filed within the due date. Hence it is important to file your income tax return on time in order to claim the losses in future years. Filing ITR on time is beneficial in many ways while keeping you tax-compliant. The e- filing season has begun for the Financial Year 2018 –19 and the due date is 31 July 2019. Be a responsible citizen and file your taxes early to avoid the last-minute issues. 6. Claiming refund: There could be a possibility that there has been tax deducted at source TDS on some investment made in the name of the individual. “If TDS has been cut one will have to file the ITR to claim refund of the same.

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7/25/2020 Benefits Of Filing Income Tax Returns | by India Tax | Jul 2020 | Medium 4/4 7. Being a law abiding law abiding citizen: More than any other benefit being on the right side of law helps. “It is also recommended to keep the income tax department informed about your income and taxability. This communication is only possible when you file your ITR. Income Tax Return Gst One Person Company Private Limited Company Esi Registration About Help Legal Get the Medium app