Reasons For Filing Income Tax Returns
Income tax is the tax to be paid to the government by an individual or an organization when the annual income exceeds a specific limit. Everyone must file their income tax returns, which include their earnings and expenditure for the current financial year. Many people do not understand the importance of filing income tax returns when their annual income is quite less. They also consider it as a burdensome and unnecessary activity to be done. But tax return filing is a social responsibility of every Indian citizen. It is a legal way for the government to know about your expenditure and transactions every year. There are several other reasons for filing income tax returns.
How To File Income Tax Returns?
Income tax returns can be filed online or offline based on your comfort. You must file your tax returns before the last date to avoid paying fines. You have to be ready with the documents necessary for submitting the tax returns. This includes respective forms, salary slips, and other related documents. You must provide the details of your investments along with interest. Be ready with the TDS certificate, which would help to know about the income deducted at the source. Make sure that you sign the document digitally.
You must download Form 26AS from the TRACE website. This form contains information about the tax deductions made in the current financial year. Check if the amount mentioned in the TDS certificate and Form 26AS is the same. If there is a mismatch, then rectify the errors in form 26 AS.
You must calculate the total income, which is taxable by adding up the income under various heads.
Benefits of Filing Income Tax Returns
The following are some of the reasons that influence people to file their income tax returns regularly.
Proves Your Social Responsibility: Filing income tax returns is clear proof that you are a socially responsible citizen. It means that you are ready to pay tax for your income. It is a good practice for filing returns even when you’re not eligible for paying tax. It is a moral and social duty of every citizen of our country.
It Creates A Record: When filing income tax returns, you generate a legal record about your earnings, expenditure, and investments. It helps the government to understand your financial transaction based on your income. It helps to calculate the right tax amount for the individual.
Quick Loan Approval: When applying for a home loan banks or financial agencies check your previous year’s income tax filing records. Income tax returns would be valid proof to know about your income and financial status. Thus for quick loan approval and credit card, processing income tax filing is essential.
Visa Processing Is Easy: Applying for a visa, and its approval is not that easy, and it involves various formalities. Submitting your income tax returns of the past couple of years can speed up your visa processing. You must file ITR for visa approval in most of the embassies.
It’s An Address Proof: The income tax returns can be used as a valid address proof. Thus when you do not possess a valid address proof, you can use the ITR forms as an address proof.
Avoid Penalty: When filing the income tax returns without fail, you can escape from the penalty imposed by the income tax department.
Carry Forward Your Loss: When filing income tax returns before the last date, it is possible to carry forward your losses to the next financial year.
Claim Adjustment For Past Loss: People who have filed their income tax returns can claim adjustment for the loss experienced in their business.
Useful For Revised Returns: When you wish to file revised returns, you must have submitted the income tax returns earlier.
Check Out – here about some more benefits of income tax return filings. Although filing income tax returns is a voluntary activity, it is essential for individuals and corporate to file it without fail. This would add significant value to the organization. An individual can remain stress-free when they have submitted their income tax returns every year without fail.
The above offers the reasons why people should file income tax returns for sure.