Being a Citizen of India, it is our moral duty to timely file Income tax returns and pay taxes. By doing so, we contribute in nation building.
Apart from being moral duty, provisions of section 139(1) of the Income tax Act, 1961 makes it mandatory for every organization or person to file its return of Income, subject to some conditions.
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This article will help you to know the Benefits of filing ITR (Income Tax Return)
To know the benefits of filing ITR, one should know What is ‘ITR’?
‘ITR’ is a form in which a person, fill detail of his Income, Deductions, Exemptions, Tax payable, if any etc. This form is digitally submitted before Income tax department.
We often think that, a person is liable to file ITR, ONLY when there is tax liability, it’s not true.
A person is liable to file return of income, if his total income is more than maximum amount, which is not chargeable to tax. Liability of filing ‘ITR’ is irrespective of the fact that there is any tax liability or not.
For the financial year 2019 – 20 & 2020 – 21, Individuals whose annual income is in excess of Rs 2.5 lakh are liable to file income income tax returns.
To know more about Income tax slab rates for the FY 2019 – 20, please read our blog.
We have already discussed that filing of Income tax return is our moral duty and also compulsion of law. Filing of ITR also brings various benefit for an assessee.
Let’s discuss few benefits of filing Income tax as under:-
Claim of Income Tax refund
The first benefits of filing income tax return is to claim of Income Tax Refund. Mostly, aggregate TDS deducted is quite higher than actual tax payable which can be claimed as refund by filing ITR. So for claiming Income tax refunds, one need to file ITR is mandatory.
Carry forward of losses to next year
If in any finnacial, a person incurrs loss under one or more head of income, it can be set off from income of other heads. This is subject to certain conditions as per the provisions of Income tax Act.
However, if there remains loss which need to be carry forward to next year, one need to file income tax return on time. Only then remaining loss can be set off to next financial year. So, filing of income tax return is must in case of carry forward of losses to next year.
Income and Address Proof
Next benefits of filing income tax return is Income and Address Proof. Income tax return is a proof of income as well as it can be used as address proof.
ITR is an Essential Document
ITR is always an essential document as it contains detail of Income & Taxation for each individual year.
Easy Loan Processing
Next benefits of filing income tax return is Easy Loan Processing. ITR is considered as one of the main documantry proof of income. Filing an ITR helps individual as well as other organisations in easy processing and approval of Bank loans. If an individual / any organization requires any loan, major banks will ask them to submit ITR. So, if any person files ITR on time, it would help in easy proceesing of loan.
Easy Credit Card Processing
Next advantages of income tax is easy credit card processing. Filing ITR on time also helps in easy processing of credit card applications, as ITR is considered as one of the main income documentary proof.
Hassle Free Approval of Visa Application
The next benefits of income tax return is hassle free approval of visa application. Various embassies are very diligent about tax returns of individual applying for visa, at the time of processing visa application. The authorities ask for a copy of past tax returns with other documents. That is also a reason to file ITR in order to make such application process hassle free.
Avoid Penalty
Next advantages of income tax is to avoid penalty. Timely filing of ITR helps to avoid penalty which are levied by Income tax department due to late / non filing of tax returns. As of now Income tax department charges penalty of Rs 5,000/- to RS 10,000/- for late filing of Income tax return.
Excess Intrest Can be Avoided
Last benefits of income tax return is to avoid excess interest. To avoid payment of interest, it is always better to pay taxes on time and simultaneously file timely returns.
Now you are aware that there are many benefits of filing Income tax return and paying income tax. So, file CA Assisted Income tax return on time through Manthan Experts now and get the above-discussed benefit.
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Find out now which Income Tax Return Form is applicable for you!