Benefits of filing income tax return

According to the Income Tax Act,1961 filing of your income tax return (ITR) is mandatory. If someone’s income exceeds the maximum amount not chargeable to tax, one is required to file income tax return. Similarly, filing ITR is mandatory for ordinary residents having overseas assets or in case certain exempt income exceeding specified threshold, etc. However, in addition to the same being a requirement under the income tax laws, you also stand to benefit in the following ways from filing your income tax return, even if your income is not taxable.

Refund of TDS: In case tax has been deducted at source(TDS) by the person paying your remuneration, you may need to claim the same as a refund from the tax authorities depending upon your taxable income. In order to claim such refund of TDS, you would be required to file your income tax return.

Claiming additional deduction: If you are a salaried individual, your employer would have deducted TDS from your salary.

Carry forward losses: If you have incurred a loss from specified sources of income ( i.e. house property income, loss from business/profession), you can carry forward the same to subsequent 8 years for set off against other income from the same head of income. You would be eligible to claim such carry forward of losses and set off in subsequent years only if you have filed your return within the prescribed due dates.

Avoid Penalties: From FY2017-18, if you were required to and did not file a tax return you are required to pay a fee up to Rs 10,000 for non-filing of the tax return.

Avoid additional interest: If any taxes are payable (over and above the TDS and other payments made) by you, a belated return can invite additional interest at 1 per cent per month for the balance tax payable.

Easy Loan Processing: It is generally observed that various financial institutions/banks insist on tax return copies filed while processing applications for the housing loan, education or vehicle loan etc. Generally, income tax returns of the last three years are required for taking any big loan.

Processing Credit Card applications: Further banks/financial institutions may also consider copies of tax returns as evidence while processing credit card applications.

Proof of residence: If you have been filing your returns and a tax assessment order is passed for any year, the said assessment order can also be used as a proof of residence for applying for Aadhaar or passport.