Benefits of Filing ITR- File your ITR to get these benefits

Even though filing of ITR is not mandatory for all individuals but if you file your Income Tax Return there are certain benefits that one can avail. In this article, we will tell you the benefits of filing ITR.

Who is required to file Income Tax Return (ITR)

Before knowing the benefits of filing ITR, it is necessary to know who is required to file Income Tax Return (ITR).

In the case of Individual, if your gross total income (before allowing any deduction under section 80C to 80U) exceeds Rs. 2,50,000 lakhs in FY 2019-20, (this limit is Rs. 3 Lakh for senior citizens and Rs. 5 Lakh in case of a super senior citizen) then you are mandatorily required to file your Income Tax Return.

Read Here- Complete list of persons who are required to file Income Tax returns.

Benefits of Filing ITR

Following are the benefits of filing ITR-

Filing of ITR avoids penalties

W.e.f. AY 2017-18, if you did not file your income tax return, then section 234F will impose a penalty, which can be levied up to Rs. 10,000. However, if your income is below Rs. 5,00,000 then will be Rs. 1,000, So it is required to file Income Tax Return to avoid penalties.

Helps to avoid extra interest

As per section 234A of the Income Tax Act, 1961, if you do not file your ITR, the belated return could lead to extra interest at 1% per month for the remaining tax payable by you.

Also Read- Interest and Penalty for late filing of ITR

ITR Receipts is Important Documents

ITR Receipt is the proof of your Income Tax filing and payment of your taxes. it is more detailed than form 16, It contains your total income, tax paid, refund amount, etc.

Claiming Refunds

One of the biggest benefits of Income Tax Return filing is claiming Income Tax Refund. In case, there are TDS deducted on your PAN No. and if your tax payable is less than the refund amount or no tax payable then all the tax deducted will be refunded to you. It is the main benefits of filing ITR

Visa Processing

Embassies of developed countries ask for the ITR receipts of past years, it may be of the last 3 years or 6 years. This will help them assess your income and ensure that you are able to take care of your expenses on your foreign trip.

Also Read- Standard Deduction For Salaried Individuals and Pensioners

Carry forward of losses

If you do not file your Income Tax Return, you can not carry forward losses of the current year to the next financial year. Hence it is important to file your Income Tax Return on time in order to claim the losses in future years.

Bank Loan Documentations

In the current scenario, if you going to take a bank loan, the banker will first ask about your Income-tax Return and on this basis, the bank will sanction the loan. Bank usually ask for copies of tax returns filed for the previous 2-3 years and ascertain the income capacity of the Individuals.

Hence to apply for loans a tax return would be required to file, it is the other and the main benefit of filing ITR.

Nation Building

Taxes is one of the primary sources of income for the government, the money collected is issued for the building infrastructure and other development activities. The government spends the collected money on defense, healthcare, infrastructure, education, and launching various schemes for the masses.

Frequently Asked Questions- FAQs

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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.

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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)