Benefits of Income Tax Return Filing

 Income Tax:

                        The term Income tax refers to a type of tax that is levied by Union Government of India on the income of its citizens. Income tax is the major source of revenue for Union Government. They are using these funds for public welfare in various manner.

Income Tax Return:

                       By law, income tax payers are legally obligated to file their income tax returns annually to determine their tax liability. Income Tax Return comprises the all  details of  assessee, their sources of income, deductions, exemptions, advance tax paid, Tax Deducted at Source etc. There are various types of income tax returns for various types of people based on their source(s) of income. Now a days income tax return should be filed only through online. Recently, Union Government had launched a new income tax portal named   https://www.incometax.gov.in/  

Filing of Income Tax Return is mandatory in following cases:

                                           1. The basic exemption for a normal tax payer is Rs. 2.5 lakhs, for senior citizen aged more than 60 age is Rs. 3 lakhs and for a senior citizen aged more than 80 age is Rs. 5 lakhs. When the taxable income is more than this limit, filing of return is mandatory.

                                           2. Person who is depositing more than Rs.1 crore in one or more than one bank in a financial year has to file income tax return compulsorily.

                                          3. A person who is paying more than Rs.1 lakh for Electricity bill within a year has to file income tax return.

 

                                          4. An ordinary resident who is owning assets outside India, and earned income from the same has to file return. 

                                          5. When an Individual spends more than Rs. 2 lakhs on foreign travel, has to file income tax return.

                                          Even assessees can file their income tax return on their own willing apart from above mandatory cases. The following are benefits of filing income tax return on time.

Benefits of Filing of Income Tax Return:

 1. Loans:

                   Now a days, banks ask its customer two or three years IT return acknowledgment while processing loan application. If you are planning for obtaining a loan in future, Income tax return is very needful for you. Besides, availing loan Income tax return is very useful while obtaining credit cards, insurance policy claims etc.

2. Serves as a proof of income:

                  Self employed people do not have any proof of income unlike salaried individual has income proof in Form No:16. Income tax return serves as a proof of income for self employed people with detailed breakdown of incomes and expenses incurred by them in a particular year.

3.Visa application:

                 When individuals apply for visa, immigrant authorities request their income tax return copies to ensure that the applicant has clean tax records. Especially certain embassies like US, UK, Canada are very particular about the past tax records of visa applicant.

4.Carry forward of losses:

                 Filing of tax returns before due date is mandatory to claim specified loss of individuals like loss from capital gains, business or profession etc. By opting to file income tax returns, an individual not only get benefit of carry forward of losses to future but also to maintain a track record of losses.

5.Claim tax refund:

                  When an assessee has TDS, more deductions than tax amounts, investments, etc it all can be claimed only when income tax return is filed. This is the very biggest benefit a common man can get easily.

6. Participating in Election:

                  When an individual like to participate in election, he has to file a nomination form with competent authority to validate their nomination in election. Along with that nomination form, he has to attach the income tax return for past years.

My view:

                 We are getting many concessional amenities from Union and State Governments. Tax is their major revenue to spend for us by many common welfare schemes. So paying tax is not an expenses, its an investment. If you are not in the limit of tax liability, or not willing to pay tax, its alright. But atleast use or avail the product or service of any one of the Public sector company of our country.