5 Benefits of Filing Income Tax Returns
Smart Money February 10, 2023
Team LXME
After your income exceeds a certain level, income tax is imposed. Income tax return needs to be filed to pay these taxes. It is always a good idea to file a tax return. But why is this the case? Let’s look at some of the most important benefits of filing ITR!
1. Crucial document while applying for loans:
The benefit of filing income tax returns in India is that while applying for loans, the bank requires you to submit a few documents like Aadhar Cards, PAN Cards, Licenses, Photo Identification, etc. Income proof is an important document asked by banks especially ITR of the past 3 years. This is to determine if you will be able to repay the loan and to understand your current financial situation.
2. Helps with VISA Application:
Another benefit of filing an income tax return is that while planning your trip abroad many procedures are involved. Majority of the embassies require you to submit copies of various documents during your visa application process. out of which one the most mandatory document is your ITR for the past couple of years. This allows the embassy to know your financial situation. This allows your visa application process to be smooth.
3. Claim Excess TDS:
The government allows certain tax deductions in order to encourage people to pay taxes and to reduce burden on taxpayers. Taxes can be deducted or exempted from certain investments. TDS and tax rebates can also be claimed back. In order to claim these benefits, it is necessary to file ITR
4. Income and address proof:
ITR can be used as proof of income and address. Your Aadhar card can also be obtained, which aids in address verification. This also serves as actual income verification proof for self-employed or independent contractors because it provides a detailed breakdown of a person’s income and expenses for the entire fiscal year.
5. Claiming losses:
To claim specified losses, filing of ITR is mandatory. This will allow you to carry forward losses to the subsequent years.
Tax filing is a time-consuming process, but it is the only way to save your tax money. So avail the benefits of filing ITR and save money.
Similar blog you may also like to read – Old vs New Tax Regime
FAQs: Benefits of Filing Income Tax Return in India
What is the benefit of income tax?
Income tax helps fund government activities, public services, and infrastructure. It’s a crucial revenue source that supports national development and welfare programmes.
What is the benefit of filing an ITR?
Filing your ITR ensures compliance with tax laws, avoids penalties, and enables individuals to claim deductions and exemptions, reducing their taxable income and overall tax liability.
Why should you file income tax returns?
Filing an ITR is mandatory for individuals meeting specified income thresholds. It establishes financial transparency, facilitates loans, and allows for various tax benefits, including refunds and carrying forward losses.
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