Five key benefits of filing your tax return before the due date

Many believe that filing the income tax return (ITR) is not important if the income is below the taxable threshold. However, the ITR functions as proof of income and cumulative taxes, like the TDS, charged to the person throughout the year. In India, ITR is mandatory to claim all deductions (under Chapter VI) and exemptions on long-term capital gains arising from the sale of a house, shares and other fixed assets. If the total income exceeds the exemption limits, the ITR must be filed.

However, there are many other benefits to producing the RTIs on time. Here are five of them.

Obtain bank loans

All major banks in the country ask for a copy of tax returns. The ITR gives banks a fair idea of ​​an individual’s source of income. It makes it easier for taxpayers to obtain home and auto loans.

Also Read: Explained: What is Form 26AS and Why is it Important to File an ITR

Fast visa processing

Most embassies and consulates ask for a passenger’s ITR for the past two years at the time of visa application. If the documentation is complete, it can help them process the request faster.

Loss carry forward

According to the provisions of the Income Tax Act, losses incurred in the previous year can be deducted from gains made in the current year if the ITR is filed on time. Unpaid expenses can also be carried forward to the following year.

Penalty avoided

If the ITR is not filed on time, the tax officer reserves the right to impose a penalty of up to Rs 5,000 on the individual. The tax that banks withhold on interest due on time deposits (FD) if it exceeds a certain amount can only be refunded if the individual deposits their ITR on time.

Eligible to be used as proof of address

The ITR can also be used as proof of address and income. It is convenient when applying for membership, etc.

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