In India, a person's tax liability must exceed the exemption level of Rs 2.5 Lakhs within a fiscal year before an income tax return (ITR) must be filed. If an individual's gross income is less than the exemption level, he or she is not required to submit a NIL tax return. Nonetheless, for a variety of reasons, it is suggested that you submit a tax return even if your tax return falls below the allowable level. If you made any money during the fiscal year, it is usually a good idea to submit a tax return. In this blog, you can have a look at some of the top 7 benefits of filing income tax returns on time.
7 Benefits of Filing Income Tax Return on Time:
1.Tax returns are legal documents
In legal terms, the Income Tax Return is critical. It is on file with the government, and it functions as a legal declaration in two ways.
- Identity Verification: The return you complete can be used as verification proof in a number of scenarios, such as when applying for something like an AADHAR card or other papers. It is also considered as proof of residency by the government.
- Income Documentation: As earlier mentioned, the ITR form contains a complete record of all your revenues and expenditures. This is how the tax you are required to file is computed. As a result, ITR may also be used as income evidence, as some agreements, such as the purchase of real estate, need proof of income.
The government provides you with various exemptions in order to reduce the burden on taxpayers and encourage more people to pay their taxes.
- These deductions and exclusions can be utilized in some trades to help reduce the amount of tax you pay.
- TDS and refunds are also reclaimable.
Note that in order to benefit from these tax advantages, you must file an income tax return. Exemptions cannot be claimed if an ITR has not been filed.
3.It is useful if you are planning a journey to another country
Certain requirements must be followed before traveling overseas. Your plans to travel abroad may be endangered if you do not file your ITR. One of the documents required by the nations you intend to visit is the ITR application.
This is because of the following reasons:
- Filing income tax returns improves your case and increases your chances of getting a visa.
- It gives the embassies details about the financial circumstances.
4.Avoid Penalties and Punishment
The Income Tax Act of 1961 determines the taxes that apply to you. As a result, you must pay taxes if your income exceeds the exemption amount. As a result, if you are required to pay taxes on your earnings but fail to file your income tax returns, you will be penalized.
A penalty or punishment can be assessed by the income tax officer. If you opt not to submit your returns, you may face additional punitive penalties. As a result, in order to avoid such fines and repercussions, you need to file an ITR.
5.Crucial Loan Application Document
Whenever you request a financial loan to buy something, the bank asks you to provide certain documentation.
- The Aadhar card
- PAN card
- A valid driver's license
- Picture identification, etc.
One important document demanded is documentation of income. Banks often requested ITR for the previous three years. This is performed to evaluate your previous and present financial condition, in addition to assessing whether or not you're going to be able to repay the loan. Not only may ITR be used to apply for borrowed funds, and yet it can also be used to obtain a credit card.
6.Losses can be transferred
Sections 70 and 71 of the Income-tax Act of 1961 provide provisions for carrying over losses from one year to the next. This implies you can defer your loss until the next evaluation year.
- Losses from residential properties can be carried into the following eight years or longer and deducted from house property income.
- Business losses can indeed be pushed forth and reimbursed with future business income.
You may carry forward as well as set down your expenses if you do not submit an income tax return. Submitting your tax return on time benefits both you and the country. The revenue you generate goes towards enabling the government to create infrastructure and improve other national amenities such as medical care and defense. The more individuals who file, the more money the government has to spend to provide us with a nice nation.
7.Benefits of a Scholarship
Several federal agencies see an ITR as a means of obtaining revenue documentation. For example, you can use an ITR to apply for specific institutions and/or college scholarships. The ITR is used to determine a prospective student's capacity to substantiate their revenue, and insurance carriers recognize it as valid paperwork.
Taxobooks provides complete tax services to both individuals and small and medium-sized enterprises. We comprehend the complexity and worry that come with submitting personal tax returns at Taxobooks Tax & Accounting. To allay your fears, we may provide you a variety of customized accounting services. We offer full income tax filing in Hyderabad to small and medium-sized businesses and individuals. We understand the complications and concerns that accompany filing personal tax returns. Just visit this page to discover further about our services, and if you're searching for Income Tax Filing services in Hyderabad, do contact us now.