Benefits of Filing Income Tax Returns

Income Tax Return or ITR is a form that contains information about the person’s income and taxes to be paid during the year. It is an annual online mandatory activity that every Indian citizen should file if their gross annual income is more than the basic exemption limit. In fact, keeping aside the mandatory nature of filing ITR, it can be beneficial in various ways including you can claim a tax refund, apply for a VISA and so on. The ITR contains information pertaining to the financial year. The new financial year starts on 1st April and ends on 31st March of the next year. 

If you are still wondering whether you should file your ITR or not, keep reading even if you are not required to mandatorily file it! The best financial consulting firms in Dwarka such as RBG consultants suggest some major benefits of filing income tax returns on time. Read on and thank us later for it. 

1. Easy loan approval

Having filed the ITR will help individual taxpayers when they have to apply for a vehicle loan, house loan etc. All major banks can ask to show a copy of ITR receipts. Additionally, these receipts come in handy in case your application for a loan is rejected. A copy of tax returns acts as a proof of income statement and is treated as a mandatory document for the loan approval process. 

2. To claim a tax refund

In case you have a refund due from the Income-tax department, you will have to file returns mandatorily to claim the refund. 

3. To carry forward your losses

If you do not file returns on time, you will not be able to carry forward your losses - capital short-term or long-term losses if any, in a financial year to the subsequent years. This means that certain losses from the income can be deducted which will eventually help you reduce your tax liability of the future income. 

4. Quick visa processing

If you are traveling to foreign countries, experts from RBG consultants always suggest that you carry income-related proof like ITR receipt, FORM 16. Consulates ask you these requirements in most cases especially at the time of visa interview. Most embassies & consultants may require you to show copies of your visa for the previous 3 years. This is especially true if you plan your trip to the US, UK, Canada or Europe.  

5. Self-employed

If you are self-employed, ITR receipts will be your only proof of income for all sorts of financial transactions as businessmen and partners of firms do not get Form 16. Hence, ITR receipt is an important document for all self-employed individuals. 

6. Government tender

Financial Experts at RBG Consultant say that if one plans to start their own business and needs to fill a government tender for the same, they will need to show their tax return receipts. This is required to show that you have a sound financial status. 

However, please note that there is no strict rule regarding the same and it may vary depending on the internal rules of the government department!

Considering all the above benefits of filing income tax returns, it should definitely not be taken for granted. In case you’re not filing it on time, which is by July 31st of every year, you are required to pay interest. Make sure you file it before the assessment year to reap the above benefits and to avoid penalties. You may get in touch with RBG Consultant, one of the best accounting firms in Dwarka for any general queries related to income tax returns or other value-added services!