Even if the assessee’s total income does not exceed the basic exemption limit, filing an income tax return is still advised because it benefits the assessee in a number of ways that will be covered in this article.
Income Tax Returns Filing
Every person whose total income exceeds the basic exemption limit as defined in the act is required under the Income Tax Act of 1961 and the Income Tax Rules to file an income tax return by the deadline. Every person of the nation is expected to file an income tax return as part of their social obligation.
Advantages of filing a tax return
Financial Statement Filing has a number of advantages because it serves as income documentation. The main advantages for those who file income tax returns are listed below.
Getting a Tax Refund
If the tax due on the assessee’s taxable income is less than the tax deducted, such as TDS or advance tax, the assessee is entitled to a tax refund. Only by completing an income tax return is it possible to claim this refund that is owed to you by the income tax department.
Easy Loan Processing
To determine a person’s potential to earn an income, all major banks and financial institutions need copies of the assessee’s most recent three years of filed income tax returns. As a result, filing an income tax return is necessary for someone who wants to borrow money from banks and other financial institutions.
With a view to processing visas
Most embassies and consulates request copies of income tax returns for the previous two years when a visa applicant submits an application or during a visa interview.
Carry the losses forward
The assessee must file income tax returns by the deadline in order to carry over losses from the current year to future years so they can be offset against future income.
Purchasing High Life Coverage
If you wish to purchase a life insurance policy for Rs. 50 lakh or more, you need file income tax returns since life insurance companies need copies of your filed returns in order to verify your annual income.
The person who is considering starting a business or already operating one must provide copies of their income tax returns from the previous year to the relevant authority or department in order for them to verify or evaluate the person’s financial capacity and determine whether or not he can support the payment obligation.
Only salaried individuals are given a Form-16, which serves as their evidence of income. Businessmen, minor commission agents, and firm partners are not given a Form-16. Therefore, filing an income tax return has become crucial for those whose income exceeds. The basic exemption threshold set forth in the Income Tax Act.
To stay away from fines and interest
In order to avoid interest charges under section 234A of the Income Tax Act and penalties under section 234F of the Income Tax Act for late filing and non-filing of Income Tax Returns on persons who are obligated to file but did not. It is imperative that income tax returns be filed by the due date.
To evade evaluations and scrutiny
It is advised that any assessee whose total income exceeds the basic exemption level file their income tax return in order to avoid receiving notices of assessments and inspection by the assessing officer.