Income tax return(ITR) filing season has started. For Individual taxpayer return filing, the due date is 31st July, coming near. Therefore, it is very necessary for us to know why we need to file income tax returns. Many people hesitate in filing the return because they don’t know the advantages of filing ITR. Many also have a wrong belief that if their income is less than taxable limit or there is loss in the business, therefore, they don’t need to file the return.
Actually, We need to file the ITR on time: cause the benefits are many!
- To get a loan or to raise finance or to avail credit card facility Income tax return is required by the bankers and financiers to confirm your income and check creditworthiness.
- Income tax return serves as proof of your income. And regular filing of ITR authenticates( Validates) your income and thereby wealth. Which helps if any query or notice comes from the Income tax department.
- Many times Income tax return acknowledgment can be used as address proof also.
- Even if there is a loss in one year, its return is required to be filed in time. Because if you file the return of loss in time within due dates, you can carry it forward and adjust it in future years when there is profit. So even return of loss also required to be filed in time.
- While applying for visa also the visa processing authority may ask for your past few years Income tax returns to verify the compliances.
- Certain insurance policy like, policies which cover loss of income due to the accident. To take such insurance policy also ITR is required.
- For professionals, businessmen who don’t have salary income, ITR is the only proof to prove their earnings.
- If your income is more than the taxable limit ( 2.5 Lakh in case of Individual less than 60yrs.)and if you don’t file the income tax return on time than you may have to pay interest @1% per month for the tax payable if any while ITR filing. Further, If you don’t file ITR on time within due dates, a penalty up to Rs.10000 is also applicable. However, if the total income doesn’t exceed 5 Lakh and then penalty up to Rs.1000 will be applicable.
Generally, belated ITR within 1 year from the end of the relevant assessment year (or before assessment completes whichever is earlier). That is for the financial year 2018-19, the relevant assessment year is 2019-20. And the belated return of FY 2018-19 can be filled up to 31st March 2020.