Income Tax Return Filing: 7 reasons you should complete your income tax return filing on time
File ITR even if you have nil income or your gross total income is below the taxable limit. The benefits of income tax return filing on time are multiple.
It is mandatory to file income tax returns if your total income exceeds Rs. 2,50,000/-. This limit is Rs. 3,00,000/- for senior citizens (more than 60 years old. It is Rs 5,00,000/- for super-senior citizens (more than 80 years old). Consider these limits before applying deductions under sections 80C to 80U. But, you can file your returns even if your income is less than the exemption limit.
Income tax return filing has quite a few advantages. Let’s explore these benefits –
These are seven reasons to complete your income tax returns filings on time.
1) Income tax refund
TDS deduced during the year? File income tax returns to claim a refund. During the year your employer or clients might have deducted tax at source. If you want to claim an income tax refund, income tax return filing becomes mandatory.
2 ) Carry forward of losses
Losses for a year cannot be carried forward unless a return has been filed before the due date. Even if it’s a loss return, do file your returns before the due date. One can carry forward and claim the losses in the next year, only if one has filed income tax returns.
3) Avoid penalties
If returns are not filed before the due date, then pay a minimum penalty of Rs. 1,000/-. Rs. 5,000/- penalty if total income is greater than Rs. 5,00,000/-. Rs. 10,000/- penalty if returns filed after 31st December.
4) Processing of a loans, credit facilities and visa.
Financial institutions ask for your income tax returns to process loans. Besides Banks, NBFCs also need this as part of their internal documentation. It is also mandatory to submit income tax returns for the processing of any visa. Also, some credit card companies demand proof of tax returns before issuing a card.
5) Legal sanction to your income
Filling an income tax return gives a legal sanction to your income. Hence it advisable to file returns even if you are not liable to pay taxes for the year.
6) Financial documentation and backing
Records created with the IT department on filing of income returns are also useful. Most agencies with whom you may need to interact with usually view and use these.
7) Avoid show cause notice for non filing of returns
Timely Income tax return filing helps in avoiding show-cause notice from IT department.
Be a responsible citizen, file your income tax returns on time.
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