Reasons why you should file income tax returns on time

A person must submit an Income Tax Return (ITR) form to the Indian Income Tax Department. It includes details on the individual’s earnings and the yearly taxes owed. The information included in an ITR must be specific to a budget year, defined as one that begins on April 1 and ends on March 31 of the following year.

What can be the sources of income to file an ITR ?

Income can be from different sources :

• Income derived from capital gain
• Income derived from business or employment
• Income from Salary

Who needs to file an ITR ?

ITR filing is not compulsory for everyone. Depending Several on factors, taxpayers can choose not to file an ITR. Here are these components one must know when making the  decision :

• A person whose income is taxed the corresponding taxable limit’s exemption threshold of 2.5, 3 or 5 lakhs.
• An ITR must be filed by anyone with income from assets located outside of India.
• An individual must submit an income tax return each fiscal year if their annual electricity bill totals more than Rs. 1 lakh.
• An individual must submit a tax return each fiscal year if their annual electricity bill sums up more than Rs. 1 lakh.
• Assessees must submit an ITR if they deposit more than Rs. 1 crore in one or even more bank deposits within a fiscal year.
• International travel costs: You must submit an income tax return if you spent more than $2,000 on travelling abroad during the fiscal year.
• However, as was already said, there are numerous advantages to reporting income tax returns on time; for this reason, whether or not you are a taxpayer, you must file your ITR.

Tops benefits of filing an ITR

1. Avoid Punishment or Penalty

• According to the Income Tax Rules, failing to submit an ITR by the deadline may result in a 10,000 fine and other penalties. Interest on the tax due following Section 234A of the Tax Act of 1961 may also result from a delay in filing an ITR.

2. Loan approval is rapid

• Having a spotless record of filing income tax returns makes it simpler to get loans approved from lenders. Banks demand a draft of the ITR report from borrowers who apply for loans as verification of their income.
• Tax returns must be submitted to officially approve a loan. It may be difficult for people who don’t pay income taxes to have loans approved by institutional lenders.

3. Forward-looking Losses

• If an ITR is filed before the deadline, the income tax regulations permit carrying over losses to the following fiscal year. This enables taxpayers to pay less tax on their future income.

4. Credit Card Request

• Regardless of the type of profession they are involved in, practically everyone wants a credit card as a financial tool. If there are issues with other income evidence, one of the key documents that one must provide is an income tax return.
• The Credit Information Bureau (India) Ltd (CIBIL) score used to assess a taxpayer’s credit history is another important factor that is determined by ITR.

5. Application for Visa

• The majority of countries want an ITR record as one of the essential documents before providing a visa to a candidate. This provides information about your current financial condition and income to the people handling your visa. The embassy will examine the applicant’s financial situation and certify that they can afford the costs.

Want more information?

If you are looking for more information on tax and financial management, then you can contact the experts of Inside Tax. We are known for providing the best tips for tax saving, financial planning, and ITR filing services in Delhi NCR. So contact us anytime!