Income Tax Return: If your income falls below the tax exemption limit, then by law you are not required to file ITR, but by doing so you lose out on many benefits. That’s why tax experts advise everyone to file ITR.
Income Tax Return: The last date for filing Income Tax Return for the financial year 2020-21 is 31 December 2021. If you have not filed your income tax return yet, then fill it soon. Any person who is below 60 years of age, and who earns Rs 2.5 lakh annually, is exempted from income tax. Any person whose total income exceeds the tax exemption limit, he has to file income tax return.
Everyone knows that the tax exemption limit for senior citizens above 60 years and below 80 years is Rs 3 lakh, while for super senior citizens i.e. above 80 years this limit is Rs 5 lakh. Even if your salary is less than the income tax limit, you should still file income tax return, as it has many benefits.
1. Loan eligibility is decided
If you are going to take a loan, then the bank checks your eligibility, which is based on the income. How much loan the bank will give you depends on how much income you have filed in your income tax return. Actually, ITR is one such document that all banks use for easy processing of loans.
Usually banks demand 3 ITRs from their customers during loan processing. Therefore, if you want to buy a house by taking a home loan, or want to take a car loan or take a personal loan, then ITR must be filed as it makes it easier to get the loan.
2. Required for Tax Refund
If you file ITR, you can save tax on interest earned on savings schemes like term deposits. Tax can also be saved on dividend income. You can claim tax through ITR refund, if the total income from multiple sources of income exceeds Rs 2.5 lakh, then you can claim the deducted TDS again.
3. Valid document for address, income proof
Income Tax Assessment Order can be used as a valid address proof. It can also be used to make Aadhar card. Form-16 is issued to the employees by the company. Which is his income proof. Even for self-employed or free-lancers, the ITR filing document acts as a valid income proof.
4. Can claim loss
A taxpayer is required to file income tax return within a stipulated date to claim any loss. This loss can be in the form of capital gains, business or profession. Income tax rules allow those who file ITR in the relevant assessment year to carry forward the loss against capital gains.
5. Documents also required for visa processing
If you are going somewhere abroad, then most countries demand ITR. This shows that the person is a tax compliant citizen. This gives the visa processing officers a clear idea of your current financial situation and income. This makes it easier for you to get a visa.
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