Even if your income is below the basic taxable limit, there are many benefits of filing your Income Tax Return.
Filing of Income Tax Return is mandatory in the following cases:
- If the income of an individual exceeds Rupees Two Lakh Fifty Thousands.
- If an individual has spent Rupees Two Lakhs of foreign Travel for himself or any other person.
- If an individual has deposited Rupees One Crore or more in one or more current account.
- If an individual has paid electricity bill exceeding Rupees One Lakh in a single bill.
- If an individual’s gross total income exceeds the exemption limit, before claiming tax exemption on capital gains.
However, there are many other benefits pursuant to filing the tax return even if you earn below the taxable limit. Here we are taking a look at some of them:-
- Loan Application
Income Tax Return is required in the processing of all kind of loan whether for Two-wheeler, Four-Wheeler, Home Loan, Personal. Income Tax Return is the Key document of all the loan application. All major banks ask for a copy of ITR for atleast 3 years.
- Carry Forward Your Losses
Filing of Tax Return within the due date is mandatory to claim specified losses for an individual taxpayer, such as losses from capital gains, business, or profession, etc. “By opting to file tax returns, not only does it benefit the individual to claim the losses carried forward in future years, but it also serves as a document to track losses that can be claimed in the future.
- Claim Tax Refund
Certain passive income such as term deposit interest or dividend income suffers tax withholding in form of TDS which is reflected in assesses 26AS. For many individuals these could be exempt if it is below the threshold. Most of the individual taxpayers having only the abovementioned income would need to file the tax returns for claiming refund of taxes.
- Proof of Income
Self-employed taxpayers do not have any proof of income unlike salaried individuals who receive a salary certificate in Form 16. Therefore, the income tax return serves as a proof of income for these self-employed taxpayers with detailed break-down of income and expenses incurred by these individuals during any financial year. Besides, self-employed taxpayers can also furnish these documents before various forums as proof of income.
Please be aware that the last date to file your income tax return is 31st December 2021, do your compliances on time to get the tax benefits