Those whose salary is not taxable should also file income tax. There are many advantages to filing income tax. Now it is even easier to fill it.
For people filing income tax returns for the first time, filing income tax returns seems a complicated process. but it’s not like that. The government has been continuously making taxpayer friendly efforts to make the process of filing returns easier. Despite this, many taxpayers still do not file their income tax returns thinking that their income is not taxable or that they will not come in the eyes of the Income Tax Department.
Who Should File Your Return
If your taxable income is more than 2.5 lakh rupees and you are under 60 years of age, then it is mandatory for you to file your income tax return. It is also mandatory for people above 60 and 80 years with taxable income of Rs 3 lakh and Rs 5 lakh. If you are an Indian resident and have your property abroad, you will also have to file your return.
This year’s Union Budget has made it mandatory to file returns under various other circumstances such as depositing more than 1 crore rupees in a current account in a financial year, or his personal expenses on a trip abroad. Exceeding one lakh rupees, or using electricity of more than 1 crore rupees in a year.
Even if a person’s taxable income is less than Rs 5 lakh, they will still have to file returns under the circumstances mentioned above. But, remember that these changes in the income tax law will be applicable from the next financial year ie from 1 April 2020.
If your salary is not taxable after the required deductions, you should still file your return. Let us see what is the benefit of filing your income tax return:
Helps in getting a loan
Your income tax return statement is a record of your income and tax paid in the previous financial year. When giving a home loan or a car loan, banks ask you for the last few financial years’ ITR to confirm the income you have stated and to ascertain your ability to repay the loan. So even if your income is not taxable, you should still file your income tax return if you want to take a loan in future.
carry forward your losses. Filing an ITR gives you the opportunity to mention your losses in a financial year, helping you to pursue the loss in the next financial year or claim a discount on the loss. You cannot claim an exemption without filing your return. In the future, if you want to claim for short or long term capital loss or rebate for speculative or non-speculative loss, file your return on time.
You can demand a tax refund.
It is also possible that you have paid extra tax on any of your income. The Income Tax Department allows you to ask for a refund on the tax paid by you, but you can claim it only by filing your return.
Visa Processing Helps
Many countries like the US, UK, Canada or European countries ask for your ITR to process your visa application. As is the case with a loan, the ITR statement here also helps the embassy confirm your income and employment to ensure that you will take care of your own expenses during the trip. So if you are thinking of going abroad for a trip very soon, then definitely file your return so that visa processing is easy.
It helps to get a high value life cover. To
buy a life cover of Rs 50 lakh or more, you have to show your ITR. If you need high term coverage then it works like an income proof for you.
Apart from the above, filing income tax returns benefits those who do not get Form 16. It acts as an income proof for self-employed people, entrepreneurs and partner companies.
(Adil Shetty, CEO, Bank Bazaar)
(Disclaimer: This article is written for informational purposes only. It should not be considered as investment related, financial or other advice. You must take the help of a financial advisor before taking any decision.)