26/07/2022
Why should you file your Income Tax Returns on time?
Benefits of filing income tax returns.
1. Easy Loan Approval - Filing the ITR will help individuals, when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), House Loan etc. All major banks can ask for a copy of tax returns as a proof of income statement. This is a mandatory document for the loan approval.
2. Claim Tax Refund - There can be instances when tax has been deducted (TDS) from your income even when your total taxable income is less than the basic exemption limit and you have nil tax liability for that year. In such a case, you will have to claim TDS refund for which you will have to file an Income Tax Return mandatorily.
3. Quick Visa Processing - Most embassies & consultants require you to furnish copies of your tax returns for the past couple of years at the time of the visa application. These are amongst mandatorily required documents and hence it is always advisable to timely file your ITR.
4. Carry Forward Your Losses - If you file the return within the or on the due date, you will be able to carry forward losses to subsequent years, which can be used to set off against the income of subsequent years. This means you can deduct certain losses from the relevant income which will help you reduce your tax liability of the future income. This is not possible without filing of the income tax return.
5. Avoid Interest - Not filing ITR on time may lead to interest on the tax payable. However, as per the provisions under Sections 234A and 234B, you can save interest applicable on the payable tax by filing ITR on time. There is no relief on penalty for late filing of ITR. Taxpayers are required to pay interest for delay in ITR fling. As per the Income Tax rule, if a taxpayer has not paid advance tax or paid less than 90% of his/her liability then he/she would have to pay interest under Section 234B at the rate of 1% per month or part of the month till the date of payment of tax.
6. Avoid Penalty - If you are required to file your tax returns according to the income tax act, but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000.
7. Avoid Notice from the Income Tax department - The Income Tax department may send a notice if not filing ITR before the due date. And that may become an unwanted headache for you. Hence, it is always better to file ITR on time.
8. Income & Address Proof- Income Tax Return can be used as proof of your Income and Address.
