What is benefits of file Income Tax Return?

Filing an Income Tax Return (ITR) in India is crucial, even for individuals whose earnings are below the taxable limit, due to its multiple advantages:

Tax Exemption Limits:

• Individuals Below 60 Years: Annual income up to Rs 2.5 lakh is exempt from tax.
• Senior Citizens (60-80 Years): Exemption limit is Rs 3 lakh.
• Super Senior Citizens (Above 80 Years): Exemption limit is Rs 5 lakh.

Advantages of Filing an ITR

1. Enhanced Loan Eligibility:
   • Banks and financial institutions require ITRs to assess loan eligibility and determine the loan amount.
   • Typically, banks request ITRs for the past three years during loan processing for home, car, or personal loans, facilitating easier loan approvals.
2. Income Tax Refunds:
   • Filing an ITR allows taxpayers to claim refunds on excess Tax Deducted at Source (TDS) from savings schemes such as term deposits and dividend income.
   • If total income from various sources exceeds Rs 2.5 lakh, the deducted TDS can be reclaimed through the ITR.
3. Proof of Address and Income:
   • ITR documents serve as valid proof of address and income.
   • An IT Assessment Order can be used for purposes like applying for an Aadhaar card.
   • For employees, Form-16 provided by the employer acts as income proof.
   • For self-employed individuals and freelancers, the ITR filing document is recognized as a valid income proof.
4. Claiming Losses:
   • Filing ITR Within the prescribed timeframes allow taxpayers to carry forward losses related to capital gains, business and professional income as per income tax regulations
5. Visa Processing:
   • Many countries require ITR documents for visa applications to verify financial stability and tax compliance.
   • ITRs provide visa officers with a clear picture of an applicant’s financial status, making visa processing smoother and more efficient.

Filing an ITR ensures compliance with tax laws and provides several financial and practical benefits, aiding in personal financial management, loan procurement, and international travel arrangements.

Read More:- How do freelancers save tax?