We understand that filling out IT returns takes time, especially if you are young and have just filed a few. However, the advantages outweigh the time spent submitting it. It is also the obligation of all country’s responsible citizens.
IT returns are mandatory for some taxpayers but optional for others, according to income tax legislation. It is critical that you file, regardless of whatever group you fall into. The Internal Revenue Service now allows you to file your tax return online, which takes only a few minutes in most cases.
This essay discusses five key reasons for filing income tax returns on a regular basis.
Who is required to file income tax returns?
Any taxpayer whose gross total income (GTI) surpasses the lowest income tax bracket for his or her age must file an ITR, according to IRS regulations. Assessees under 60 years old, between 60 and 80 years old, and over 80 years old have basic exemption limits of 2.5 lakh, 3 lakh, and 5 lakh, respectively.
Individuals who have a GTI below the basic exemption limit may be required to file an income tax return in certain circumstances. You must file an ITR if you fall into one of the following categories.
- If the total cost of your power for a single bill or the entire financial year exceeds 1 lakh.
- If you have a current account with a balance of one crore rupees in a bank or cooperative bank.
- If you are a regular resident with income from a foreign nation AND/OR assets in a foreign country AND/OR signing authority over any account outside the country.
- If you spent Rs. 2 lakh on yourself or others for a trip to another country.
Reasons for filing a tax return
Here are five compelling reasons to file your tax returns.
- It facilitates loan processing.
Let’s say you wish to apply for a mortgage or another type of loan (other than mortgage). A lender will usually want proof of income before authorizing a loan. You will be required to submit your income tax returns for the previous two or three fiscal years as part of the procedure.
- It aids in the recovery of any losses that have been carried forward.
You must file an income tax return if you have losses under the titles “Capital Gains” or “Profits and Gains from Business or Profession” that you intend to carry forward to the next fiscal year.
- You can use it to get TDS refunds.
You can claim a deduction for TDS if your employee deducts it at source or if you have a contractual arrangement that requires TDS (July 31 or as declared of the succeeding year). After calculating the TDS paid, the income tax department estimates your net tax liability. If you are not required to pay tax, you can file an ITR for a refund. Keep track of your refund by checking the status of your tax return.
- It helps to strengthen the nation.
Every tax you pay goes toward the advancement of your country. It is a significant source of revenue for the government. The government collected 9.45 lakh crore in direct taxes in fiscal year 2019. The money could be used by the government for infrastructure or other development projects.
- It can help you obtain a visa or a credit card.
If you are applying for a visa or a credit card for an international trip, the issuer will require proof of income. In most cases, you will be required to furnish tax returns from the prior three years. It will assist the opposite party in determining whether or not you are eligible for a visa or credit card.
Suggested Read: Income Tax Notice