7 Benefits Of Filing Income Tax Return On Time
Every resident in India is expected to file Income Tax Returns during an Assessment Year if they are earning income above the exemption limit provided by the Income Tax Slab for each financial or assessment year coming up. So, why it is mandatory or beneficiary for an assessee to file the ITR on time during the Assessment Year such that it works like a motivation factor.
The last day for filing Income tax returns for FY 2020-21 is 31st December 2021 for most of the individual taxpayers. Last date for income tax return filing for taxpayers whose accounts needs to be audited is 15th February 2022. In normal tax-filing years, prices tend to go up during the 30 days before the typical April deadline, and not just for federal returns. Fees to file state returns may rise as well when demand peaks.
If you file the return within the orifinal due date, you will be able to carry forward losses to subsequent years, which can be used to set off against the income of subsequent years. This means you can deduct certain losses from the relavent income which will help you reduce your tax liability of the future income. So, what are the benefits that an assessee or taxpayer would earn on filing the ITR on time or within the due date, has been discussed below.
1. Easy Loan Approval
When a customer applies with the Bank loan of a particular amount, one of the major mandated documents would be the ITR filed for the immediately preceding three years. So, the submission of this with the acknowledgment showing proper filing which is not eh due date will increase the chance of the customer being able to easily process the loan from the bank as this serves as a statement of proof.
2. Quick Application and Processing of VISA
In the case of an individual who is planning to travel abroad, during the time of their VISA application and processing the authorities of the immigration department of a particular country would be keen on checking the ITRs filed by the applicant. This is because it will give them the impression that the applicant is tax compliant and would help in increasing the ease and quickness in the processing of the application. So, filing this and keeping the same ready would again benefit you while traveling to countries like the UK, USA or Canada, and such other countries.
3. Claiming Tax Refund
Often, with respect to a payment received by an individual say in the form of salary, contractual payment or professional fee, or such other payment, there will be TDS cut from the same. And for claiming this TDS as a refund which might be in huge amounts the individual should file ITR which would then get adjusted with the tax payable and refund the balance amount if any after the same.
4. Income and Address Proof
An assessee is mandated to enter the name, address, and details of their income from various sources under the ITR. And due to this reason, it would also serve as proper proof for the same.
5. Carry Forwarding of Losses
For carry forwarding of losses incurred by an assessee during a year, it is mandatory that the ITR is filed on or before the stipulated due date. And this carry forwarded losses to the subsequent years can be used for setting off the same with the profits which might be earned in the upcoming years by the assessee.
6. Avoidance of Penalty
If the individual or taxpayer is earning income during a year that is above the exemption limit specified then, he shall be levied with a penalty by the tax officer which might be up to INR 5,000.
7. Serves as Proof of Income
Unlike a salaried person, those assessees who are self-employed or running businesses do not have any proof of income like salary certificates, bank statements or payslips to be shown for monthly crediting of a particular amount in the form of salary. So ITR being filed by such self-employed individuals would serve as the base for them to prove anywhere their steady income earning as ITR is considered to be a proven proof stating one earning.
Hence, we can now conclude that filing of ITR on time would be the most beneficial one for any assessee rather than not filing or filing the same after the applicable due date which would help in keeping any interest or penalty payments at bay along with all the other benefits you would earn.