Any individual who is earning an amount, exceeding the basic exemption limit has to file ITR. Despite, there are majority of millennials who consider income tax return filing as a daunting process but they forget about the benefits they receive after filing returns.As per the Income Tax Department, it has initiated the mechanism of e-filing for the purpose of creating a tax system that makes the taxpayer’s life easy. Hence, it is always advisable to file tax return even when the taxable income falls below the basic exemption threshold.
Here’s a look at top advantages of filing ITR on time:
Hassle-free loan Approval- The foremost advantage of Income Tax Return filing is if you apply for home loans or other loans, it will be easily approved. There are some major banks who require a copy of return before granting you a loan, hence ITR filing prove to be very helpful. Eventually, as the income tax return is no more a tedious task, thus it allows you to keep a steady report of filing ITRs which may take a few minutes and will help you in making your life easier. Furthermore, there are other importance as well like it’s a poof of your income, and individuals can use it for getting a loan in order to their income.
Carry forward of losses– If losses incurred by an individual both short term and long term, speculative and non-speculative, capital or any other type o losses, that are not recorded in the tax return, cannot be carried forward against the capital gains made in subsequent years. So, if you do not file your income tax return then you might not be eligible for an exemption against your tax liability in subsequent years.
To claim a Refund- An individual can claim the refund of the excess tax paid during a financial year while filing his income tax returns during the year This usually happens when the advance tax, self-assessment tax paid or TDS deducted of the taxpayer is higher than the total tax liability of a taxpayer. As per the income tax act, a person is required to file the return in the relevant assessment year by July 31 to claim the refund.
Avoid Penalties- If you file the income tax return, make sure that you file your ITR before the due date to avoid any legal charges by the income tax department. In case you do not file your income tax return then you will be penalized up to Rs 10,000. besides interest, for not filing ITR online on time.
Income & Address Proof- Income Tax Return can be used as proof of your income and address.
Quick visa processing- Many embassies and consultants require you to furnish copies of your tax returns for the past couple of year at the time of the visa application.
Avoiding additional interest rates: If a person has not filed income tax return, then a belated return could incur additional interest at 1% per month for the balance tax payable.
Number of Taxpayers in previous year-
As per government records, around 68 million income tax returns were filed during FY 2017-18, compared to 54 million filed during FY 2016-17. The number is expected to rise further this year.