Income tax must be paid by salaried people when their income increases beyond a certain limit. ITR Filing must be filed to enjoy several benefits every year. It is an official declaration of income that you earned in the previous years. Every individual, company HUF, partnership firm, LLP, and other types of companies must do Income tax filing every year.
It is the responsibility of every citizen to file returns to avoid penalties. An assessee will get different Benefits from Filing Income Tax returns on Time. In this blog, we will discuss the different advantages of filing income tax returns.
Different advantages of filing income tax returns on time
Income Tax return filing in India is an important step for every individual, company, and small firm. It comes with numerous steps such as:
1. Easy to claim deductions
Income tax return filing helps you to claim deductions. It also decreases the burden on taxpayers and helps to get exemptions. Apart from that, you can also get some tax exemptions and deductions on certain incomes. It will automatically reduce the tax burden on taxpayers.
Additionally, you can claim back TDS and rebates by filing income tax returns regularly. Claiming deductions is one of the major benefits of filing ITR returns every year.
2. Easy to get a loan
Starting a new business or buying a new home needs a bank loan. Income tax Return for an individual helps to apply for any type of .loan. If you file income tax returns every year, it is easy to get a business loan, home loan, education loan, or any other type of loan.
While applying for any type of loan, it is necessary to submit a copy of ITR returns to the bank or financial statements. Banks will check and verify every detail in your ITR statement and then process the loan. A person who does not submit an ITR statement will not easily get a loan for buying a home or starting a new venture.
3. Acts as an ID proof
One of the major Benefits of Filing ITR on Time is that you can use ITR returns as ID proof. It has great value and is recorded by the Indian government. You can use ITR returns in 2 ways such as:
· Income Proof
ITR statement includes the list of all the incomes and expenses. Income tax is calculated based on these incomes and expenses. You can show ITR returns while buying a new property for business or taking a loan for a foreign trip. ITR statement is a very useful document for self-employed professionals and businessmen.
· ID proof
ITR returns also act as ID proof. You can submit a photocopy of ITR returns while applying for a new document or ID card. It also acts as proof of address while applying for any type of document.
4. Saves taxpayers from interest
Taxpayers who do not file ITR returns every year have to pay heavy interest. But you can save yourself from paying interest by filing ITR for business every year. As per Sections 234A and 234B of the Income Tax Act, taxpayers can save interest by filing ITR returns every year from time to time.
If a taxpayer fails to file returns in any year, he will have to pay interest. There is no relief on penalty for late filing or no filing of ITR returns in any financial year. If a taxpayer pays a tax of less than 90% of his liability, he/she has to pay interest at the rate of 1% every month or part of the month till the tax payment date according to Section 234B.
5. Helps to gain a visa for an international tour
Timely filing of ITR for an individual on a due date or before the due date has one more benefit. You can easily get a visa by filing ITR returns regularly. While applying for a visa, the government checks ID proofs, income proofs, and other documents. ITR statement acts as both income proof and ID proof. Apart from that, you can also show ITR returns as address proof while applying for a visa.
Good history of taxpayers will help them to get visa approval instantly. Besides, ITR returns also show the financial position of taxpayers. It becomes easy for taxpayers to get a quick visa for an international business tour or private tour with family members.
Final words
We discussed all the benefits of Income Tax return filing every year. Taxpayers will also get several other benefits by filing ITR returns regularly. Filing ITR returns shows a good image of taxpayers. Besides, it also shows that taxpayer is financially stable.
Filing Income Tax returns for businesses from time to time is also beneficial for new businesses when applying for a business loan or personal loan.
