It is important to file income tax returns to avoid the consequences of not filing ITR. If a person does not file an ITR, then he/she will be subjected to a penalty. Filing taxes is important as it helps in maintaining a record of all the financial transactions that have taken place during the year.
Filing ITR helps in maintaining a record of all the financial transactions that have taken place during the year and helps in calculating how much tax needs to be paid on each transaction filing taxes as soon as possible can help in reducing the amount of tax that needs to be paid overall. A person can file his/her income tax return in order to avoid any penalties.
It ensures that the government knows about your income and helps in identifying your tax liability. Income tax return filing is an important task for every individual who earns a salary or has any other source of income. Filing ITRs can help you save on taxes, avoid penalties, and ensure that you are eligible for benefits like deductions under Section 80C of the Income Tax Act. Section 44A of the Income Tax Act provides that the individual need not file an income tax return if their total income, including source, is less than Rs 2.5 lakh. An individual can file their return online or by using a paper form. The e-filing option has been made mandatory for all taxpayers from 1st July 2017 and can be availed at https://incometaxindiaefiling.gov.in.The exemption limit has been increased from Rs 2,50,000 to Rs 3 lakh for individuals in the revised Income Tax Act 2018 that is applicable from 1st July 2018.
Filing returns is an indication of responsibility. The nation has mandated that individuals with specified amounts of income each year are required to file tax returns by the prescribed deadline. Spouses are responsible for the information in the jointly filed tax returns, as well as any taxes due.
Correct filing of tax helped me to save a good sum of amount, which helped me to boost my business.Co-Founder of Brandd.it
Benefits of filing ITR?
It is best to regularly file your returns, as you never know when you might need to file for a retroactive loss adjustment. Do file an amended return if your filing status, income, deductions, credits, or tax obligations have changed. People who earn less than a specified amount of income are not required to file tax returns, as they owe no taxes.
- Even if your income is too little to require you to file taxes, it could still be a good idea to do so voluntarily. The latest three years’ worth of tax returns must be shown as proof when registering immovable property in the majority of states. It is simpler to record the transaction when returns are filed.
- It serves as a legal document in a variety of circumstances, including identification and income verification.
- Your income proof is one of the key documents requested for loans and credit cards. ITR for the previous three years was frequently requested by banks. This is done to determine if you will be able to repay them or not based on your history and present financial circumstances.
- There are several formalities to fulfil before travelling abroad. Your intentions to travel abroad may be interrupted if you fail to file your ITR. ITR forms are one of the paperwork that is needed to enter the countries you want to go to.
- The Income-tax Act of 1961 has provisions for carrying over losses from one year to the next under sections 70 and 71. This indicates that your loss may be carried over to the following evaluation year.