Are you wondering why you should file an income tax return even if your total income is less than the exemption limit? A few days ago, I filed my income tax return even though my total income was under the exemption limit. Filing ITR for individuals has many advantages, especially in loan processing and proof of income. In this article, I will show you the benefits of filing an income tax return in India. I will also share my personal experience and why I filed when my taxable income was less than the exemption limit.
6 Benefits of Filing Income Tax Return
#1. Help to Get a Loan
Whenever you ask the bank to issue you a loan, your bank requires the last three years of ITR to process the loan and decide on an interest rate. ITR is a helpful document that helps you easily get a home, car, or any personal or business loan. You must show your income proof to get approval for the loan request. So, whether you come within the exemption limit or not, it's a good idea to file ITR yourself or hire CA.
#2. Proof of Income
It is one of the most important advantages of filing an income tax return. Being self-employed, you might not have a particular income for every month. Hence, whenever you approach the company for any project or work, you may be asked to give a highlight of your monthly income. It may be a topic of conflict; hence by having an ITR receipt, you can showcase your proof of income and get the best price for the project you work on. It is one of the major reasons I filed my ITR; even my annual income comes with an exemption limit.
#3. Fast Visa Approval
The Visa approval process requires lots of documents to provide to issuing authority. ITR is one of the documents that an individual provides. So, if you want to work in another country, the US, you must get Visa approval by providing ITR with other documents. Visa processing officials check your ITR to understand your financial condition and income level.
#4. Work as Address Proof
An income tax assessment order can be used as your address proof. If you need address proof for document creation, such as an Aadhaar card, you can consider your ITR assessment order. Many people use it and get accepted without any hassle.
#5. Claim TDS and Tax Return
Another advantage of filing ITR is individuals can claim TDS and tax returns. Generally, the company deducts TDS or tax at source when your gross income is above Rs 2,50,000. For freelancers, many companies deduct TDS when their annual invoice crosses Rs 30,000. Hence, if you do not file an income tax return and come within the exemption limit, you will not be able to claim your tax return. Hence, if applicable, you can also file your ITR and get a tax return benefit. I also filed my ITR and claimed tax return; however, it was a small amount but still worth claiming.
#6. Claim Losses, if any.
If you start a venture or startup and make any loss, you can claim your losses occurred in a financial year. However, filing ITR before the due date is compulsory to claim your specified losses. You can claim losses that come under capital gain, business or profession.
Conclusion
The Income Tax Department has made its official website easy to navigate and file the ideal return. I filed my ITR by myself and watched relevant videos on YouTube. I also belong to a commerce background and have worked with CAs. So, I have basic knowledge about filing ITR. However, if you do not know about the same, you can take the help of YouTube videos and hire CA. There are nominal charges for filing ITR for individuals, and it's a simple process.
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