Persons whose annual income exceeds the minimum Rs 2.5 lakh exemption cap must mandatorily file their income tax returns. Also if no tax obligation exists, an ITR must be filed if the gross income meets the amount above.
The ‘revenue tax return’ form is a document in which taxpayers report specifics of their taxable income, deductions, exemptions, and taxes. Filing income tax returns are required to assert tax deductions under Section 80C, 80D, etc. and other qualifying exemptions such as exemptions from long-term gains in the capital that would effectively reduce your taxable income to nil.
Not only does ITR ensure that you are tax compliant but it also provides the following advantages: As IT Return Filing is very important for all the job holders who are getting more salary.
1. ITR filing avoids fines
As from FY 2017-18, in compliance with Section 234F, the Department of Revenue Tax imposes a liability of Rs 10,000 on persons who do not file their returns on income tax. Timely filing of ITR avoids excessive fines. Even though the fine is Rs 1,000 if your annual income does not exceed Rs 5 lakh, it is your responsibility as a law-abiding citizen to file your tax returns.
2. Receipt of ITR is a very critical document
You must carefully protect ITR receipts because they are valuable evidence of your wages and tax payments. It’s far closer than Form 16. This includes your gross revenue and your income from other sources. Apart from paper filling there is also ITR Filing Online which is very easy to fill and get all the instructions and they are very easy to fill, they can make their ITR filling from home.
3. ITR receipt is a reliable document to manage bank loans without any hassle.
Many banks and NBFCs seek ITR receipts for high value loans, such as home loans and car loans, over the past three years. Lenders regard ITR as the most credible income support text. Therefore, you will report income tax returns annually if you intend to use home or car loans in the future.
As from FY 2017-18, in compliance with Section 234F, the Department of Revenue Tax imposes a liability of Rs 10,000 on persons who do not file their returns on income tax. Timely filing of ITR avoids excessive fines. Even though the fine is Rs 1,000 if your annual income does not exceed Rs 5 lakh, it is your responsibility as a law-abiding citizen to file your tax returns.
4. Processing of visas
Developed countries’ embassies like the United States , the United Kingdom, Canada and Australia are demanding ITR receipts for your visa application from the last few years. They are very special about your tax compliance and you are therefore requested to provide ITR receipts. This helps them to determine your salary and make sure you are able to afford your travel expenses. Generally IT return is very useful for few people who are willing to live abroad as these people use their ITR for their visas which is useful in affording their travel expenses.
Buy a lifetime cover
These days life insurance firms ask for ITR receipts if you want to buy a term policy of Rs 50 lakh or more insured amounts. Government tender: If you intend to start a company and have to apply for a government tender, you have to show your previous years’ tax returns. Often, this shows your financial position and whether you can or can not afford the payment duty.
5. Compensate losses in the next financial year
Until an ITR is filed, individuals can not carry losses from the current fiscal year to the next financial year. Under income tax law, persons are not permitted to incur losses and to pay for their profits in future years if the ITR is not filed in time. To order to claim the losses to future years, it is therefore necessary to file the income tax return in good time.
In several cases, filing ITR in due course helps while keeping you tax-compliant. For the financial year 2018-19 the e-filing season has started and its due date is 31 July 2019. Be a responsible citizen and early file your taxes to prevent last minute problems.
Avoid tax liability risk
If you do not file ITR, the late return will give rise to monthly extra interest on the remaining tax you pay. Penalties and assessments: If a person responsible for the file of tax returns fails to file
