Every individual whose annual income exceeds the basic exemption limit of Rs 2.5 lakh/annually must file their income tax returns (ITR). Even if your tax liability is zero, this is compulsory to file your income tax return.
Those who are not familiar with ITR, it’s a form in which taxpayers state information of their income, deductions, exemptions & taxes payable on their taxable income.
Filing an ITR is compulsory in order to claim tax deductions under Section 80C, 80D, etc. and other eligible exemptions such as long-term capital gains exemptions, which may drag your taxable income to 0.
With effect from financial year (2017-18), the Department of Income Tax charges a penalty of Rs. 10,000 u/s 234F on those who don’t file their income tax return. Filing ITR on time saves you from unnecessary penalties.
However, the penalty has been kept at Rs. 1,000 if an individual’s annual income doesn’t exceed Rs 5 lakh, as a law-abiding citizen, it becomes your duty to file your income tax returns.
You must conserve your ITR receipts carefully since they’re very significant proof of your income and of your tax payments. It’s much more elaborated than Form 16. It includes your details like total income and income from other sources.
ITR receipts also play an important role in banks and NBFCs since they ask you for your ITR receipts of the past 3 years when you apply for high amount of loans such as home loans or car loans.
Moneylenders take into consideration of ITR receipts since this stand out as the most authentic documents related to the income of an individual. Therefore, you should constantly file your income tax return if you’re planning to get home or car loans potentially.
Embassies of developed countries such as USA, UK, Canada, and Australia often ask for the ITR receipts of the last years to proceed with your visa application.
They’re very certain about your tax submission and thereby, they ask you to show your past ITR receipts. This aids them to evaluate your income and get assured that you can look out for your expenses on your travel to that particular nation.
An individual can’t take forward losses of the present financial year to the forthcoming financial year until an ITR is filed.
According to the income tax law, one can’t carry over his/her losses and trigger them against the income of potential years if the ITR does not get filed within the due date. Therefore, it’s vital to file your income tax return on time in the interest of claiming the losses in future.
Filing ITR on time is advantageous in several ways while keeping you tax-pliant. Be an accountable citizen and let the proficient of Careful Counting do your income tax return filing in Delhi on time to save you from the issues at the last minute.
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