08/06/2018
Here are some benefits of filing ITR:
For Loan Purpose: Having filed the ITR will help individuals, when they have to apply for a vehicle loan (two-wheeler or four-wheeler) or Home Loan. All major banks can ask for a copy of tax returns.
To claim refund: If you have a refund due from the Income Tax Department, you will have to file returns, without which you will have to forgo the refund. Some taxpayers may be primarily investing through fixed deposit. On such Investments tax is deducted at source (TDS) at 10 per cent. If the individual's total taxable income is less than the threshold of Rs 2.50 lakh, they can file returns and claim a full refund.
To carry forward losses: If you do not file returns, you will not be able to carry forward capital losses (short-term or long-term), if any, in a financial year to be adjusted against capital gains made in the subsequent years. A long-term capital loss in one year can be carried forward for eight consecutive years immediately succeeding the year in which the loss is incurred. Long-term capital loss can be adjusted only against a long-term capital gain in the year. But short-term capital loss (STCL) can be adjusted against long- as well as short-term capital gains.
Visa processing: If you are traveling overseas, foreign consulates ask you to furnish ITR receipt of the last couple of years at the time of the visa interview. Some embassies may ask for ITR receipts of previous three years, while some others may ask for the most recent certificate. This is especially true if you plan to travel to the US, UK, Canada or Europe, not so stringent for South East Asia or Middle East. Producing ITR receipts show that one has some source of income in India thus, strengthening your case as someone who will not leave the country for good but will return. When traveling to foreign countries, whether on a business or leisure trip, experts suggest you always carry income-related proofs along --- salary slip, Form 16 and ITR receipts. Consulates specify these requirements in most cases.
Buying a high life cover: Buying life cover of Rs 50 lakh or Rs 1 crore has become commonplace. However, these covers are available against your ITR documents to verify annual income. Life insurance companies, especially LIC, ask for ITR receipts these days if you opt to buy a term policy with sum insured of Rs 50 lakh or more. The sum insured one can get with a term cover depends on many factors one of which is the income of the insured.
Government tender: If one plans to start their business and need to fill a government tender or two for the same, they will need to show their tax return receipts of the previous three to five years. This again, is to show your financial status and whether you can support the payment obligation or not. However, this is no strict rule. It may vary depending on the internal rules of the government department.
Self-employed: Businessmen, consultants and partners of firms do not get Form 16. Hence, ITR receipts become an even more important document for them, provided their annual income exceeds the basic exemption limit of Rs 2.50 lakh. For all sorts of financial transactions, ITR receipts will be the only proof of income and tax payment for the self-employed.
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All India Itr, Digital Marketing Manager at All India ITR (2017-present)
Answered Sep 1, 2017 · Author has 103 answers and 42.2k answer views
An individual taxpayer is required to furnish his or her return of income if the person’s gross taxable income of all heads before claiming exemptions is more than the basic exemption limit for the relevant assessment year. As per section 139 (1) of the I-T Act, it is essential to file Income tax return when the gross total income (before allowing any deductions under section 80C and 80U) exceeds the basic exemption limit i.e. Rs. 2,50,000 even if the taxes due is nil. The limit is Rs. 3,00,000 for senior citizens who are above the age of 60 years but less than 80 years and Rs. 5,00,000 for Super Senior Citizen who are above 80 years of age.
It is mandatory to file income tax return in India if the following situations are applicable;
A company or a firm must file ITR irrespective of whether they have loss or profit during the Financial year.
Any individual who wants to carry forward the loss under any head of income.
A person who wants to claim income tax refund.
Filing of return is mandatory for a Resident Individual who has any asset or financial interest in an entity which is located outside India. However, it is not applicable for Non-Resident Indians (NRI) and Resident or for Resident but Not Ordinary Resident in India (RNOR’s).
Any individual who is a resident and a signing authority in a foreign account.
Individuals with exempted Long-Term Capital Gains (LTCG) from the sale of equity shares or sale of a unit of business trust or sale of a unit of equity oriented mutual funds of more than Rs. 2,50,000 in a financial year. Since the financial year, 2016-17 it has become mandatory to file Income tax return even though these gains are exempted from tax.
An individual is required to file Income Tax Return (ITR) when he is a recipient of any income under the derivation of property which is held in trust for any charitable, religious, political purpose, a research organization, a non-profit university, educational or medical institution, news agency, trade union, hospital, infrastructure debt fund, any authority or body of trust.
At the time of applying for visa or loan, the concerned authority may ask for the proof of filing Income Tax Return (ITR).
Reference: Advantages of filing Income Tax Return (ITR) on Time
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