Introduction
Many peoples in India, think that they have no need to file income tax return, because their incomes are below the taxable limit prescribed under Income Tax Act or some of them are not filing due to lack of knowledge i.e. how it is filed etc.
In India, every person wants to take loan for purchase of a new vehicles, for purchase a new house, for visit to travel abroad, for higher education etc. to fulfil the requirements they have to file income tax return even their income is below the taxable limit.
Filing of income tax return doesn’t only make you a responsible citizen but it also ensures smooth governance. It is the duty of every person to file income tax return for declaration of their annual incomes whether it is taxable or not.
There are lot of benefits to file Income Tax return even your income is not taxable-
1. Loan from banks and financial institutions- If you have applied for any loan to any banks or financial institutions, you have to require income tax return for the last three years. For example- You are interested to buy a new house, you have an urgent need of loan to purchase the said house. You have to applied for loan to any banks or financial institutions, they asked for your salary slips, form 16/Form 16A, Income Tax Returns etc., on the basis of following information they process your loan further.
2. Getting a Visa- If you are interested to travel abroad for job opportunities or visit out of India, you have to require Income tax returns, bank statements etc. for processing your visa application.
3. TDS refund- If your income is below taxable limit, but TDS is deducted on your income. You want to refund your TDS amount, which can be possible after filing of your return. So, you have to file your Income tax return while you have lower income.
4.
Carry forward of losses- If you have any losses under any head of Income i.e. loss from house property, losses from capital gain, losses from speculative business, deprecation losses, business losses. You have to file your income tax return on or before the due date. If you are not filing your income tax return, the losses cannot be carry forward to next years. It’s not the reason to say that your income is below the taxable limit.
5. Purchase a high cover life policy- If you are buying a high cover life policy says to Rs. 50.00 lakh or Rs. 1.00 Crore, you have to provide your income proof i.e. copy of ITR, which is self-explanatory proof to show your annual income.
6. Avoidance of penalty u/s 234F- If you have any income which has escaped in your mind or have to remind after the due date, you have to pay penalty u/s 234F for Rs. 5,000 or 10,000 as the case may be. So, avoidance of penalty u/s 234F, you have to file your income tax return because if once a year the return is filed before the due date you can revised your return for escaped income if any.
7. Credit Card- If you want credit card of any bank, the bank requires the income tax returns, otherwise your application for credit card is not further processed.
8. Registration of Immovable Property- Some states require income tax returns for last 3 years for registration if immovable property. Also, a legal sanction to income whether taxable or not helps you pad up subsequently to account for the wealth or the property owned.
9. Use as Income proof- Your income tax returns can be used as income proof in absence of form 16, or Salary slips. If your income is below taxable limit you cannot receive form 16 from your company so in that case income tax returns can be used as proof of income and helps to assess your net worth.
10. Apply for Govt. Tenders- If you are applying for government tenders, you copy of Pan along with copy of Income tax returns should be submitted with application form when tender of high value is being awarded.