Filing of Income Tax Return is recommended even if the assessee total income does not exceed the basic exemption limit as it is beneficial to such assessee in various aspects which shall be discussed in this article.
Filing Income Tax Returns
The Income Tax act,1961 and Income Tax rules require every person to file Income tax return whose total income exceeds the basic exemption limit as provided in the act within the specified due date. Filing Income Tax return is also considered as the social responsibility of every citizen of the country.
Benefits of Filing Income Tax Return
Income Tax Return Filing is associated with various benefits as it serves as the proof of Income. The following are the major benefits available to the person filing Income Tax Return.
Claiming Tax Refunds
Tax Refund shall be due to the assessee if the tax payable on taxable income of the assessee is less than tax deducted such as Tds, advance tax. Such a refund due from the Income Tax Department shall be claimed only by filing Income Tax Return.
Easy Processing of Loans
All major banks and Financial Institutions require the last 3 years Income Tax returns filed copies of the assessee to assess the income capability of the person. Therefore to obtain loans from banks and financial institutions the person is required to file the Income Tax Return.
For the purpose of Visa Processing
At the time of Visa application or visa interview, most of the embassies and consulates require to furnish the copies of Income Tax Returns for the past couple of years.
Carry forward the losses
To carry forward the losses incurred in the current year to subsequent years so as to set off the losses with the income of subsequent years, the assessee has to file income tax returns within the due date.
Buying a High Life Cover
It is important to file Income Tax returns for the person who wants to buy a life insurance cover of Rs.50 Lakh or more as the Life Insurance Companies are requiring to furnish the Filed Income Tax Return copies to verify the annual income of such person.
The Person planning to start or doing business and need to fill a government tender, he needs to furnish the Income Tax Return Copies of the previous year to the respective authority or department so that they can verify or assess the financial capacity of the person whether he can support the payment obligation or not.
Form-16 is provided to the salaried persons only, the Businessmen, small commission agents, partners in the firm will not get any form-16, which serves as the proof of Income of such persons. Hence, Income Tax Return Filing has become much necessary for such people whose income exceeds the basic exemption limit as provided in the Income Tax Act.
To Avoid Penalties and Interests
It is necessary to file the income Tax Returns within due date, in order to avoid the Interest levied under section 234A of the Income Tax act and penalty under section 234F of the Income Tax Act for late filing and non-filing of Income Tax Returns on the persons who are required to file but didn’t.
To Avoid Assessments and Scrutiny
In order to avoid the notices of assessments and scrutiny by the assessing officer, it is recommended to file the income tax return of the assessee whose total income exceeds the basic exemption limit.