Is your income not taxable? Still file ITR, there will be many benefits, is your income not taxable? Still file ITR, there will be many benefits
There are many benefits of filing ITR
- If the income of a person below 60 years of age is Rs 2.5 lakh per annum, then they are out of the tax net.
- The tax exemption limit for people from 60 years to 80 years is Rs 3 lakh.
- The tax exemption limit for individuals above 80 years of age is Rs 5 lakh.
The last date for filing income tax returns for the financial year 2020-21 or assessment year (AY) 2021-22 is September 30, 2021. Individuals below 60 years of age earn up to Rs 2.5 lakh per year. They are exempt from income tax. A person is required to file Income Return (ITR) whose total income exceeds the tax exemption limit. For above 60 years but below 80 years (senior citizens), this exemption limit is Rs 3 lakh and for persons above 80 years of age (super senior citizens) the exemption limit is Rs 5 lakh. As per law, you are not required to file ITR even if your income is less than the tax exemption limit, but you are advised to file your Income Tax Return (ITR) as it has many benefits.
be eligible for loan
If you are applying for a loan, banks check eligibility which depends on one’s income. They also decide the loan amount based on the income which can be availed by filing income tax return. ITR documents are accepted by various institutions for easy loan processing. Generally, banks ask for ITR for three years while processing loans for their customers. If you are planning to buy a car or house or looking for a personal loan, then ITR will prove to be a very helpful document for you.
Address and income proof
Income Tax Assessment Order can be used as a valid address proof. It can also be used for Aadhar card. Generally, employers issue Form 16 to their employees and it serves as a proof of income of an individual. ITR filing document acts as authentic income proof for self-employed people or freelancers. It gives a detailed account of the income and expenditure of a person during the financial year.
Most of the countries ask for ITR among the documents to issue a visa to an individual. It helps if a person is a tax-compliant citizen of the country. It also gives visa processing officers an insight into your current financial situation and income levels. So, file your ITR even if your income is below the taxable bracket as it can ease your visa processing, approval.
If a person files ITR, they can save tax on income from instruments like term deposits. Tax can also be saved on dividend income. One can claim tax outgo through ITR refund as these instruments are liable to tax. If the total gross income from various sources exceeds Rs 2.5 lakh, one can claim tax refund and get the amount deducted at source back. This is applicable if you have invested in such a way that your net income is less than Rs 2.5 lakh in a year.
For an individual taxpayer to claim the specified loss, it is mandatory to file the income tax return within the due date. This loss can be in the form of capital gains, business or profession. Income tax rules allow carry-forward loss to be set off against capital gains only to those who file ITR in the relevant assessment year.
It may be noted that some persons having income below the taxable category may still be compelled to file income tax return in certain cases specified in the law:-
a person holding any asset (including a financial interest in any entity) located outside India; or a person having the right to sign any account located outside India; or the person is a beneficiary of any property (including a financial interest in any entity) located outside India.
A person has deposited an amount exceeding Rs 1 crore in a financial year in any current account of any bank or co-operative bank.
A person has spent more than Rs 2 lakh on foreign travel in a financial year.
A person has spent Rs 1 lakh or more in electricity in a financial year.
Income tax return may be required to be filed while availing any tax treaty relief, claiming refund of excess withheld taxes or applying for personal loan etc.
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