Benefits of ITR Filing

As an Indian citizen, any earner whose salary surpasses a certain threshold must pay an income tax return every year to the Income Tax Department of India. It is a document in which taxpayers disclose information about their income, tax payable amount, and tax deductions received on their income. Though the primary purpose of filing income tax returns is to claim tax exemptions and deductions, there are a lot more benefits to paying ITR. Continue reading to learn more about the benefits of filing an ITR. 

What Are The Benefits of ITR Filing? 

Here are the reasons why you should e-file an income tax return every year. 

• Hassle-free Loan Process: 

While processing loans to individuals, financial institutions ask for the ITR receipts of the previous years from them. They consider these receipts proof of a regular income source. Salaried and self-employed individuals can simply borrow loans by submitting ITR receipts as proof of income. Therefore, every individual must file an ITR to ensure the smooth processing of loans. 

• Seamless Processing of Visa: 

Many foreign nations, like the USA, Australia, Canada, France, and others, demand income tax filing in order to determine whether you have the financial means to pay for the trip's costs and cover your lodging.

Without providing income tax receipts as evidence of financial capability, obtaining a visa is practically difficult. Your chances of getting a visa are increased, which is one of the key advantages of filing income tax returns. 

• Compensation For Loss: 

Losses can happen to any firm or business at any point within a certain fiscal year. Businesses must submit IT returns in order to make up for the loss and carry over their tax losses to the subsequent year. However, in order to claim the losses going forward, taxpayers must submit their ITR prior to the deadline.

• Claim Deductions: 

The government permits various deductions in order to lighten the burden on taxpayers and to motivate more individuals to pay their taxes. Therefore, through certain investments, such as life insurance policies and rebates on TDS, one can claim tax deductions after filing income tax returns. 

• Protect From Penalties: 

You could incur penalties if you file your taxes late or not at all. For instance, you may be required to pay a fine of up to Rs. 10,000 as interest for prolonging the ITR filing if you file your tax returns after the specified due date.

According to Section 234B of the Act, a taxpayer becomes responsible for interest at the rate of 1% per month until the day they complete the tax filing if they have not paid their tax on time or have paid less than 90% of their tax liability.

Conclusion 

It is the responsibility of individuals to pay income tax returns every year if their income falls under the income tax slab. In order to promote the growth and development of the nation, every citizen of the country must file income tax returns. You can either pay it online through the official website of the Income Tax Department of India or offline, depending on your convenience.

Also read: All About Gratuity