Benefits of Itr Filing

BENEFITS OF ITR FILING
In terms of direct tax revenue, India is setting new records. As of January 10, 2024, the tax
collection increased 19.41% year over year (Y-o-Y) to Rs.14.70 lakh. The sum has exceeded the
total budget forecasts for FY 2023–2024's 80% tax collection target. Income taxation is
important to a nation's development. It is the government's primary source of funding. Salary
payments, welfare programs, government initiatives, defense, etc. are all covered by this sum.
Taxpayers must file Income Tax Returns (ITR) with the appropriate tax amount in order to
guarantee that each taxable entity pays its share of the government's obligations. In this blog, we
will discuss all of the advantages of filing an ITR, including who needs to file one and what
happens if they don't. Alright, let's get started right now!
What is Income Tax Return?

Income Tax Return or ITR is a form which is used to show an individual’s gross taxable income
for the given financial year i.e starting from 1 st April and ending on 31st March of the next year.
It is supposed to be submitted to the Income tax department to formally declare their income,
deduction claimed, exemptions and taxes paid. As per the rules od Income Tax Act, 1961, a
citizen under the age of 60 years must file Income tax returns if a part of their income is taxable
i.e exceeds Rs.5 Lakhs in a financial year.
Is it compulsory to file ITR?

If your income exceeds the basic exemption limit, you are required to file income tax returns
under Indian tax legislation. The income tax rate is predetermined for taxpayers. A delay in
completing taxes not only results in late filing costs, but it also reduces your chances of obtaining
a loan or a visa for trip.
Benefits of ITR Filing

Important document for Loan Approvals and Credit Card Applications:
When you apply for a loan, whether to buy a car, a home, or for business purposes, financial
institutions demand a collection of documentation to complete your request. Frequently
requested papers include Aadhar Card PAN Card, Driver's licence., Photo ID, among other
things. Proof of income is a frequently requested document by banks and financial organisations.
They often require your Income Tax Returns (ITR) for the last three years. This will assess your
financial history and present circumstances to establish your loan repayment capabilities.
Furthermore, the importance of ITR goes beyond loan applications. When applying for a credit
card, credit card providers take into account your financial situation.
Acts as Proof :
Income Tax Return has enormous legal significance. The return you fill out can be used as
identity verification in a variety of situations, including when applying for an AADHAR card or
any other document. The government also accepts it as proof of address. As previously stated,
the ITR form includes a thorough breakdown of all your income and expenses. The tax you must
file is estimated based on this information. Thus, ITR can also be used as income evidence, as
some transactions, like as the purchase of a home, require you to present proof of income. This is
especially useful for self-employed individuals who do not receive Form 16.
Easy Visa Processing:

When arranging a trip abroad, it is critical to follow certain procedural requirements, including
completing your Income Tax Returns. A regular record of filing income tax returns will
considerably strengthen your visa application. It indicates financial responsibility and adherence
to legal requirements, which are positive aspects in the visa acceptance process.
The ITR provides a complete summary of your financial condition, allowing embassies to see
clearly how stable your economy is. This transparency is critical because it allows the authorities
to assess your ability to fund your trip and ensure that you do not pose a financial risk while in
their country.
Health Insurance:
Section 80D of the IT Act allows taxpayers to claim a tax deduction of up to INR 25,000 per
fiscal year on health insurance premiums paid. Senior citizens are eligible for higher deduction
limits. One of the most significant advantages of the ITR is that it allows taxpayers to deduct
medical insurance costs.
Reimburse for Losses:
If you incur a loss on dwelling property, you can carry it forward for the next eight assessment
years. During these years, it can be offset against income from residential property, lowering
your taxable income. Similarly, if you lose money in your business, you can carry it forward and
deduct it from future business income. This provision helps to balance out revenue swings over
multiple years. The Income-tax Act of 1961 has provisions for carrying over losses from one
year to the next in sections 70 and 71. You can therefore carry over your loss to the following
evaluation year.
Avoid penalties and legal consequences. By Filing ITR
The Income Tax Act of 1961 requires you to pay taxes if your income exceeds the exemption
limit. Failing to file your Income Tax Returns (ITR), although being entitled to pay taxes, can
have serious consequences. Failure to file an ITR may result in a monetary penalty of up to
₹5000 imposed by the Income Tax Officer. This penalty is used as a financial deterrence to
ensure tax compliance.
Protecting against black money
In recent years, the government has taken a number of initiatives to combat black money and
reduce money outflows from India. With this purpose in mind, the government required
taxpayers to disclose foreign assets in their annual income tax filings for fiscal year 2011-12.
Furthermore, even if you do not hold foreign assets and file your income tax return on time, the
IT department will never consider your savings black money, because any income not reported
to the department is deemed black money.
Startup Ventures Funding:
When starting a new company or expanding an existing one, you may need finance from outside
sources such as venture capitalists or seed investors. These investors may ask for the specifics of
your ITR in order to assess the company's financial stability and profitability. They could also
cross-check the data in the audited report against your ITR forms.
FAQS
1. Why is it important to file income tax return?Filing income tax return is important to fulfill
legal obligations and avoid penalties from tax authorities.
2. What are the benefits of e-filing income tax return?
E-filing income tax return offers convenience, speed, and accuracy in processing tax returns.
3. Do we get money back in income tax return?
Depending on various factors, taxpayers may receive refunds in their income tax return.
4. What is the use of tax returns?
Tax returns serve to report income, claim deductions and credits, and calculate tax liabilities
accurately.

Benefits of Itr Filing

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BENEFITS OF ITR FILING

What is Income Tax Return?

Is it compulsory to file ITR?

Benefits of ITR Filing

Easy Visa Processing:

Avoid penalties and legal consequences. By Filing ITR

Protecting against black money

Startup Ventures Funding:

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