Posted by Greetings from Classic Associates ! Tuticorin
Advantages of filing ITR:
- Loans
Documenting the ITR will help people, when they need to apply for a vehicle loan (2-wheeler or 4-wheeler), house loan, etc. All major banks can request a copy of their tax returns.
- Claim Tax Refund
If you have a discount due from the Income Tax Department, you should document an Income Tax Return to guarantee the discount.
- To carry forward losses
If you file a return within the due date, you will be able to carry forward losses for subsequent years, which may be used to offset against income for subsequent years.
A long-term capital loss in one year can be carried forward for eight consecutive years immediately succeeding the year in which the loss is incurred. Long-term capital loss can be adjusted only against a long-term capital gain in the year. But short-term capital loss can be adjusted against long- as well as short-term capital gains.
- Quick Visa processing
At the time of the visa application, most embassies & consulates ask you to have copies of your tax returns for the past few years.
This is especially true if you plan to travel to the US, UK, Canada or Europe, not so stringent for South East Asia or the Middle East.
“Producing ITR receipts show that one has some source of income in India thus, strengthening your case as someone who will not leave the country for good but will return,”
- Buying a high life cover
Buying a life cover of Rs 50 lakh or Rs 1 crore has become commonplace. However, these covers are available against your ITR documents to verify annual income. “Life insurance companies, especially LIC, ask for ITR receipts these days if you opt to buy a term policy with a sum insured of Rs 50 lakh.
The sum insured one can get with a term cover depends on many factors one of which is the income of the insured. If an insured does not have a very high salary, he doesn’t need a higher insurance cover.
- Government tender
Experts say that if one plans to start their business and need to fill a government tender or two for the same, they will need to show their tax return receipts of the previous five years. This again, is to show your financial status and whether you can support the payment obligation or not.
However, this is no strict rule. It may vary depending on the internal rules of the government department. Even the number of ITRs required can vary.
- Self-employed
Businessmen, consultants and partners of firms do not get Form 16. Hence, ITR receipts become an even more important document for them, provided their annual income exceeds the basic exemption limit of Rs 2.50 lakh.
For all sorts of financial transactions, ITR receipts will be the only proof of income and tax payment for the self-employed.
8. Income & Address Proof
Income Tax Return can be used as a proof of your Income and Address
9. Avoid Penalty
If you are required to file your Tax returns but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000.
Contact us at: www.classicassociate.com | support@classicassociate.com | 93444 17156
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