Filling of Income Tax Return is mandatory in following cases:
♣ The exemption limit for a normal taxpayer is ₹ 2.5 lakhs, ₹ 3 lakhs for senior citizens, and ₹ 5 lakhs for super senior citizens. Filling of ITR is mandatory, if taxable income exceeding the exemption limit.
♣ Individual owning assets outside India and accruing income from the same must file ITR.
♣ A person paying more than ₹1 lakh for electricity within the fiscal year has to file IT returns.
♣ Assesses depositing more than ₹1 crore in one or more bank accounts in a financial year should file ITR.
However, there are many benefits pursuant to filing the tax return even if you don’t fall under any mandatory provision.
1. Easy processing of loans: Banks ask for a three-year ITR while processing a loan for its customers. ITR will be a very helpful document for you if you are planning to buy a car or a house, or looking for a personal loan. Besides securing a loan, the income tax return helps in the processing of obtaining credit cards, insurance policies, etc
2. Application for VISA: Where individuals are planning to take up a job or conduct business visits outside India, the immigration authorities request for copies of tax returns filed in the past. The tax return filing ensures in smooth processing of VISA applications as immigration authorities then deem the individual as tax-compliant. It is seen that certain embassies that of the US, Canada, the UK, etc. are particular about the tax return records of the individual.
3. Serves as Proof of Income: Self-employed taxpayers do not have any proof of income unlike salaried individuals who receive a salary certificate in Form 16. Therefore, the income tax return serves as a proof of income for these self-employed taxpayers with detailed break-down of income and expenses incurred by these individuals during any financial year.
4. Claim tax refund: One of the biggest benefits of ITR filing is you get to claim a tax refund.. If you have made investments in tax saving instruments and have paid more income tax, you are liable for a tax refund.
5. Carry Forward of losses: Filing of tax return within the due date is mandatory to claim specified losses for an individual taxpayer, such as losses from capital gains, business, or profession, etc. “By opting to file tax returns, not only does it benefit the individual to claim the losses carried forward in future years, but it also serves as a document to track losses that can be claimed in the future.
6. Avoid Penalty: If you are required to file your returns but didn’t, then the tax officer deserve the right to impose a penalty of up to ₹ 5000.
Income Tax Return (ITR) filing due date for Assessment Year 2021-2022 is December 31st, 2021. As per the Income Tax rules, any individual having an annual income above Rs 2.5 lakh should file ITR.
Income Tax Return (ITR) filing due date for Assessment Year 2021-2022 is December 31st, 2021. As per the Income Tax rules, any individual having an annual income above Rs 2.5 lakh should file ITR. Income up to Rs 5 lakh is tax-free. Experts advise that even if you have no tax liability, you should file ITR on time for enjoying several benefits.
Due to technical glitches in the new tax filing portal, the government has extended the ITR due date. Following are five benefits that you can enjoy by filing ITR on time:
1. Save 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.
2. Avoid penalty up to Rs 10,000
There is a cost of filing delayed ITR! Filing of ITR after the due date may lead to a penalty up to Rs 10,000 as per the Income Tax rules.
3. 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.
4. Loan approval becomes easy
It is easier for ITR filers to get their loan requests approved by lenders. When you apply for a loan, the bank would ask you to provide a copy of your ITR statement as proof of income statement.
ITR report is a mandatory document for getting loan approval. Those who don’t file ITR may find it very difficult to get their loan request approved by any formal lender.
So, if you are planning to get a loan in near future, ensure that you are filing your returns on time.
5. Carry forward losses
As per the Income Tax rules, you can carry forward losses to subsequent years if filing ITR before the due date. This provision will help you in reducing your tax liability from any future income.
Apart from the above, taxpayers who file their ITR on time also get their Income Tax Refund faster than others.
|CS NAMRATA SINGH ( COMPANY SECRETARY, ICET LTD)|