Skip to main content

 

Benefits of Income Tax Return (ITR) Filing

    Income Tax Return (ITR) filing is a form in which you declare your income details, taxes payable on other income, deductions & exemptions for a particular financial year. As per the tax laws, individuals with taxable income or income above the basic exemption limit have to mandatorily file an ITR every year before the due date. Under Section 234F of the IT Act, not filing ITR before the due date can attract a penalty of up to INR 5,000 and result in other severe consequences.

    Filing an ITR helps you to claim for tax deductions, thus reducing your tax outgo & growing your savings. But apart from this, there are additional income tax return filing benefits. Take a look-

     

    Benefits of ITR

    1. Easy Loan Approval

    The income stability of the borrowers is critical for the lenders. This is why borrowers must submit an ITR of at least three consecutive years when applying for loan products such as Home Loans, Car Loans, and Personal Loans.

     

    2. Income Proof

    Another top advantage of filing ITR is its ability to work as income proof. As detailed information about your annual income and the taxes you've paid is available on the ITR, it is one of the most-widely accepted income proofs. So, if you're required to submit an income proof somewhere, file the ITR and submit the receipt as your proof. 

     

    3. Quick Visa Processing

    The income and tax status of the applicant are vital for international embassies. So, if you're planning to visit a foreign country and are about to apply for a Visa, you'll mostly be asked to submit your ITR so that the embassy can easily analyse your income and tax status.

     

    4. Claim Tax Refund

    Another biggest benefit of income tax return filing is claiming tax refunds. You can file tax returns to claim your refund if you've paid a higher income tax than your actual tax liability. After verification, the tax department will deposit the refund amount directly into your bank account.

     

    5. Compensate for Losses

    Any business can incur a loss in a specific financial year. As a business owner, you can compensate for the loss by filing an ITR. By following the ITR process, one can carry forward the losses to the next year. However, this compensation for losses is only possible if ITR is filed before the due date.

     

    6. Presumptive Taxation Scheme

    A Presumptive Taxation Scheme is one of the benefits of filing ITR. As per the Income Tax Act, self-employed individuals and professionals are required to maintain regular books of account and get the accounts audited. Small taxpayers can get relief from this tedious work by opting for the Presumptive Taxation Scheme, under which self-employed individuals can declare income at a prescribed rate at the time of ITR filing.

     

    7. Avoid Penalties

    As mentioned in the beginning, late ITR filing could result in penalties. When you file the tax returns every year before the due date, you can protect yourself against such penalties and other severe consequences.

     

    8. Medical Insurance

    Under Section 80D of the IT Act, taxpayers can claim a tax deduction of up to INR 25,000 in a financial year on premiums paid towards a Health Insurance plan. Higher deduction limits are available for senior citizens. One of the leading benefits of ITR is allowing taxpayers to claim medical insurance deductions.

     

    Key Takeaways:

    • Now that you know what is the benefit of income tax return file, don't forget to file your tax returns on time
    • Even if your annual income is below the basic exemption limit, you can still file ITR to experience a host of benefits
    • Apart from knowing ITR benefits and filing tax returns, it is also crucial for taxpayers to make tax-saving investments
    • AU Small Finance Bank offers access to various tax-saving investments such as AU 5-Year Tax Saving Fixed Deposit, Life Insurance & others, thus allowing customers to reduce their tax burdens and grow their savings
     
    Disclaimer
    “This blog has been prepared to provide the readers with general information and basic understanding. The Income tax definitions and rules keep on changing, so it is suggested that the readers cross-check all the facts and contents of the material. Before taking any decisions, please consult your tax advisors.”

Comments

Post a Comment

Popular posts from this blog

The due date for Income Tax return filing for Firms and HUF for FY 2021-22 is 31st July, 2022.

 Income Tax Department has notified 7 various forms up till now i.e. Form ITR 1 to ITR 7 for filing Income Tax Return for different types of income and different types of entities. It is important that every taxpayer should file his/her Income Tax Return on or before the specified due date. In this article, we have mentioned all the Important ITR Filing Due dates for individual, companies, LLPs and Firms, and HUFs for the FY 2021-22 (AY 2022-23).  Income Tax Return or ITR as we may call it is a form where all the taxpayers has to declare their taxable incomes from all the sources. Not only this but the taxpayer shall also have to mention all the eligible deductions and tax payments if any, in the IT Return Form. Filing of this form with the Income Tax Department is call ITR Filing or Income Tax Return filing. Irrespective of the Accounting Year adopted by a taxpayer, he/she needs to file an Income Tax Return for a particular Financial Year (i.e. April to March). Due dates for ...
Post a Comment
Read more
  Finance minister Nirmala Sitharaman has rejigged income tax slabs under the new tax regime and also raised the standard deduction under the new tax regime to Rs 75,000 from Rs 50,000, bringing cheer to salaried tax-payers as well as the pensioners. The deduction, however, will remain unchanged at Rs 50,000 under the old tax regime. For family pensioners, the deduction will go up from Rs 15,000 to Rs 25,000 under the new regime. This move will benefit four crore salaried individuals and pensioners, she said during her  Budget 2024  speech. As a result, a salaried individual in the new tax regime stands to save Rs 17,500 in income tax," she said, adding that the government will have to forego revenue of Rs 29,000 crore in direct taxes.
Post a Comment
Read more
  I. Increase in limit of remuneration to working partners of a firm allowed as deduction With effect from Assessment Year 2010-11, Sub-clause (v) of clause (b) of section 40 of the Income Tax Act, 1961 ("the Act") prescribed a limit on allowable deduction to working partners of a partnership firm subject to the conditions prescribed therein. Over the past few years, certain domestic companies, individuals, Hindu undivided families, resident co-operative societies, new manufacturing co-operative societies are subjected to a lower rate of tax by virtue of provisions contained in sections like 115BA, 115BAA, 115BAC, 115BAD and 115BAE. In pre-budget memorandums and expectations from Union Budget 2024, the taxpayers desired that similar benefit be extended to partnership firms. Although the budget proposals do not propose any such relief to the firms directly, it proposes to increase the limit of allowable deductions from the firm's income in respect of remuneration payable t...
Post a Comment
Read more