Are you in any doubt about whether you should file your income tax return in India or not? Then you are at the right place. We will tell you the major benefits of filing income tax returns in India below in this article. It will help you to then decide how you can avail the income tax return filing benefits.
Many people assume that if the income is less than the basic exemption amount to file an Income tax return. All this misconception and confusion about not filing an ITR is worthless. We will help you to know the Income tax return filing benefits So that you can file an ITR without any fear and enjoy all the benefits of filing an income tax return in India.
We will help you to know the Benefits of Income Tax Return below. Let’s start.
What is Income Tax Return?
An income Tax return is a form, a person submits to the Income Tax Department of India. It has information on the Person’s income and expenses of the year and the taxes to be paid.
According to the tax law of India, it is necessary to file an ITR when your income is more than the fundamental exclusion limit. For taxpayers, the income tax rate is predetermined. If you don’t file your ITR on time, you’ll have to pay late filing fees and have less chance of getting a loan or a travel visa.
Eligibility of Filing an Income Tax Return in India
According to the Income tax return, People or businesses with certain income amounts are supposed to pay income tax. Paying an income tax can help the individual to avail of many benefits of ITR. The age and the income amount eligible for filing an ITR are mentioned below-
l People up to the age of 59 who have a total income of Rs. 2.5 lakh can file the Income Tax return.
l A senior citizen who is between the age of 60-79 can increase the limit up to Rs. 3 lakhs.
l A super senior citizen who is in the age group above 80 can have a limit of up to Rs. 5 Lakh.
Know the Top 10 Benefits of Filing Income Tax Return in India
There are many benefits of filing income tax returns in India. Let’s look at the benefits of ITR which can help you to decide to go for return tax in India.
1. Easy to Get a Loan
Many times taking a loan is a very hectic process. One of the benefits of filing an Income tax return in India is that it will make the Loan process easy and hassle-free. ITR works as proof of your income statement which helps the Bank to give easy approval for a Loan of 2-wheeler, 4-wheeler, or a home loan. It is one of the basic benefits of filing an income tax return in India.
The benefits of an income tax return are that it can be helpful not only when applying for bank loans but also when applying for a credit card. Before issuing you a credit card, credit card companies also request your previous salary and ITR.
2. Claim Tax Refund
Sometimes when your total income is below the basic exemption limit, tax can get deducted from your income. In such cases, filing an ITR can help you to claim a refund.
3. Valid Address Proof
One of the benefits of filing an income tax return is that it works as valid address proof. You can also avail Aadhar card using it. Aadhar cards, licenses, passports, and other documents are required to have address proof. Sometimes when they don’t work in the form of identification then your Income Tax Return can be used.
4. Proof of Income
Proof of income is a very important thing for a working individual. Form 16 is given as proof of income to the employee. When you have the Income tax return, it serves as the actual income proof for the verification purpose. ITR works as a person’s income and expenses for an entire year. The benefits of ITR help a person to show proof of income wherever needed.
5. To Take High Coverage Insurance
People buy high coverage Insurance policies for like Rs. 50000. To buy such policies you need to show your yearly income. The benefit of filing an income tax return in India is that you can show your ITR. It has all the records and expenses. So it becomes easy to take high-coverage Insurance.
6. Funding for New Businesses
If you want to start a new business or expand an existing one, you might need money from sources like investors or venture capitalists. These investors may inquire about your ITR to assess the profitability and financial stability of the company. Using your ITR forms, they verify the data in the audited report.
The individual’s income is used to determine the coverage amount, and providing the ITR enables insurance companies to determine a person’s higher income level. This is one of the best benefits of filing income tax returns in India for making startups and businesses.
7. Keep Sway from Penalty
Indiantax Act 1961 governs the Income tax returns in India. When you come under the eligibility of paying taxes. Then you must pay the taxes and avail benefits of an income tax return. When you fail to do so then tax officers keep you away by penalty of Rs. 5000 or else you will have to fine a large amount.
8. Carry Losses
You can carry forward your losses to subsequent years by filing your ITR within the original due date. Your tax bill gets lesser by deducting these losses from the income of subsequent years. The benefits of ITR would not be available without an income tax return.
9. Quick Visa Processing
The majority of consultants and embassies require copies of your most recent tax returns when you apply for a visa. These documents are one of the requirements that are necessary to apply for a quick visa. As a result, it’s best to submit your ITR as soon as possible. Getting a Visa can take time, but getting quick visa processing is one of the benefits of filing income tax returns in India for people to go abroad.
10. Benefits for Scholarships
Various authorities (government and private) consider an ITR to be a source of income documentation. Getting a Scholarship can be very helpful to students and it becomes easy when you have an ITR.
For example, you can claim specific university and institute scholarships by submitting an ITR. Insurance companies also accept the ITR as acceptable documentation because it helps to establish the prospective student’s ability to prove their income.
From the above article, we have seen many benefits of filing income tax returns in India. We can conclude that having an ITR eases the financial documentation processes like getting a Loan, getting scholarships, etc. So, now you can file an ITR and avail all the income tax return benefits. Income tax return filing benefits will help you to overcome financial hurdles as it will keep all the records of your expenses throughout the Year.
Benefits of Filing Income Tax Return in India FAQs
How can I maximize the ITR Refund?
Ans. You can get the benefit of ITR by maximizing the ITR refund. You will have to claim the deduction or exemption for it.
How can get the benefits of an income tax return?
Ans. You can avail all the benefits of filing an income tax return in India by applying for ITR. It will help you to record all the expenses and to avail all the benefits of your income tax return.
What are the benefits of filing an income tax return in India?
Ans. There are many income tax return benefits that you can avail of. You can get a loan easily from the bank, You can claim a tax refund, You can also use ITR as your income proof or address proof, and many more. You can easily file an ITR and avail all the income tax return filing benefits.
Who verifies the ITR?
Ans. ITR is verified by the Tax Law of India. It verifies that the information given in the ITR is true and also verifies the return to the person.
How ITR helps in carrying Losses?
Ans. Carrying Losses is one of the benefits of income tax return. Filing an ITR on the original due date carries forward your losses to subsequent years. Your tax bill gets less by deducting these losses.