Why you should file your income tax return

<strong>Why you should file your income tax return</strong>

Every year paying your income tax bill is an obligation you have to fulfil. We know that paying taxes is the single most important thing for our well-being and life prospects. But did you know that you have the power to increase your productivity and live wealthier by filing your income taxes? So, here are some of the most important benefits of filing income tax return:

1. It Acts as a Legal Document

Filing your income tax return is like filing your life’s story with a judge. The Income Tax Return form is an official record of all the income you earned during the year, how much you paid in taxes, and how much was refunded to you.

2. Income Tax Return makes it easy to get loans

Income Tax Return is a mandatory document for getting loan, credit card and many other financial products. It is easy to get a loan when your income tax return is ready. You don’t need to wait for long time for this document and you can get it instantly. Banks usually check the refund status of the taxpayer and if he has filed his ITR for that year, then he would be eligible for getting a loan. This is because the banks know that their money will not be wasted in case their client doesn’t pay back on time or defaults on their loans.

3. ITR document is important in getting visa

It has been observed that most of the people want to apply for business visa or tourist visa but they don’t have ITR document with them. So they have to apply for ITR before applying for business or tourist visa because according to the rules, if you have not filed your ITR by the due date then no single foreigner will be allowed to visit India without prior permission from the government of India.

4. Avoid Penalty and Punishment

Every year, the government imposes penalties and fines on those who do not file income tax returns. These penalties can be as high as 25% of the total taxable income. If you have more than one employer, you may also be subject to additional penalties and interest on unpaid taxes. The good news is that if you do not want to pay these penalties, you can simply file your tax return without paying any penalty or interest. However, if you fail to file your return by the due date, then the income tax department will impose a late filing fee of 5% of your unpaid tax liability for each month or part thereof that your return is late.

5. Can help you Claim Deductions

If you earn taxable income, it is your duty to report it to the government. You can claim deductions such as medical expenses, education costs and other expenses that are deductible from your taxable income. This is especially helpful if you already pay professional fees tds. Filing an income tax return is the best way to claim these deductions because they can reduce your taxable income and result in lower taxes paid by you.