Mumbai: Every company or a firm; or being a person other than a company or a firm will have to furnish a return of his income if his total income is above the maximum amount which is not chargeable to income tax.
Taxpayers can get multiple benefits by filing income tax returns before the deadline.
Easy loans approvals
To approve a loan most banks require a copy of income tax returns for the last three years. So your I-T returns could help you if you are planning to apply for a bank loan.
To claim TDS refunds
Irrespective to the fact that the individual is liable to pay income tax or not; if a person has invested in fixed deposits the interest income is chargeable at 10 per cent as Tax Deducted at Source (TDS). You will get a refund of TDS deducted if your income is below the taxable limit if you file an income tax return.
Carry forward of losses
If case individual has endured losses in a year, by filing income tax return they can carry forward that loss for the next eight years to set off the same against any the future income. This would help decrease the tax burden in years to come.
In case you are travelling abroad, at the time of the visa interview foreign consulates ask you to furnish ITR receipts for previous couple of years.
While some countries ask for the most recent income tax return, others can ask for income tax return for last three years.
Buying a high life life insurance cover
If you want to buy a term policy with a sum insured of Rs 50 lakh or more, life insurance companies ask for ITR receipts. If you plan to launch a business and require to bid for a government tender, you will need to submit your tax returns of the previous years. This is required as a proof of your financial condition and whether you can meet the payment obligation or not.
While salaried employees get Form 16 as income proof, businessmen, consultants and partners in companies do not get Form 16. Therefore, ITR receipts become an even more important document for them, in case their annual income exceeds the basic exemption limit of Rs 2.50 lakh. ITR receipts are the only proof of income and tax payment for all of the financial transactions for the self-employed.
Avoid interest on tax liability
If you don’t file ITR on time, the late filing of return could lead to extra interest on a monthly basis for the income tax payable by you. Penalties and assessments: If any person having tax liability does not file returns within the deadline, then in addition to the assessment findings, he is liable to pay the penalty of up to Rs 10,000 for not filing the return within the deadline.
To avoid penal actions and to get above-mentioned benefits, ensure that you file your income tax return on or before the August 31, 2019 deadline which was extended from July 31, 2019.