Most of the Indian Citizens, whose income is not coming in the tax bracket thinks that why do they need to file Income Tax Return as there is no such requirement from the side of government. But what they don’t know is that Income Tax Return is not only required to file for paying taxes but the more important reason is that the Individuals whose income is not taxable or Taxable but Earned in Cash without any proper records is that whenever they need any credit from any Bank Such as Credit Card or Cash Credit, they will need Income Tax Return as proof by the respective Banking Company. For E.g. Banks do not offer you any type of credit unless they sees at least 2 years of Income Tax Return filed by Individual.
Other than the Loan facility or Credit Card Facility, Income Tax Return facilitates many more benefits even though you not pay any tax to government i.e. file a nil tax return.
Following are the benefits of Filing Income Tax Return for Individuals:-
- Tax Refunds: – Sometimes Individuals do not have knowledge about Tax already deducted on their That tax amount can be refunded back, only if Income Tax return in filed by Assessee. For example Interest received on Fixed Deposits are after deducting 10% Tax at source, to get the refund of that amount in Bank account, one must file Income Tax Return with the help of a professional.
- Visa Processing became Easy: – Whenever you wish to fly abroad and applying for Visa Application, there are 99% chances that Embassy & Consulates will require you to furnish copies of Income tax Return for past couple of years to check individual’s Credibility.
- Proof of Income for Kid’s Future: Income tax Return is not only required by the banks while applying for a loan as income proof but also will be required by Exam Authorities of your child as a proof of Income of Parent.
Also, If you are planning to write a will in the name of your Child/Spouse and want to leave a decent amount of money for them, then there is probability that Income Tax Department might ask them for the proof of income in future other then what they have filed in their ITR’s. So it is important to file ITR to give a secure future to your Child.
- Avoid Penalty and Department Notice: If your income is liable to tax but still no Income tax return is filed then it’s time to get alert regards the transactions done by your bank If there are transactions involving credit of more than Rs. 2.5 Lakhs or More in a Financial Year, then chances are high that you will get a Notice from Income Tax Department regarding filing your return and it might lead in paying a penalty of Not Less than Rs. 5000.
- Easy Bank Loan Approvals: If somebody who is thinking to get a car loan or home loan and not filing Income Tax Return then it will be not wrong to say that they have to use the cabs to go to offices and stay at a rental place, as no Banks will offer a loan whether it is car Loan or Home Loan unless a Return for past 2 years is provided to the bank by such
- Carry Forward of Losses: As an Individual if you are running a business and if no returns is filed by you then it’s time to start filing it as if in any year there is a loss occurred then it would not be possible to carry forward that loss unless and until an income tax return is
Other than above benefits, it is necessary to file the return of Income as nobody knows in this developing nation, that what facility given by any organization to individual will need income tax return. So to be future safe, it is necessary to file income tax return.