As the country’s fellow taxpayers, it is important to keep a close eye on the annual changes in tax standards as well as on the income tax slabs under which each of us falls. It is with the help of these tax slabs that we can decide in essence how much tax we owe to the Indian Government and how much refund we are liable for.
Sometimes, however, the question arises as to whether one can pay income tax or not. This fact is due to the question that all income below the minimum exemption cap is effectively exempt from tax. The peripheral issue emerging in this regard is whether or not an income tax return should be filed by that person.
Okay, it is always considered a wise move to file one’s IT Return Filing on time, with precision, more or less than the taxable maximum! Consequently, the points mentioned below are sure to ensure that you are actually filing your tax returns, whether or not you fall under any of the slabs.
You must file income tax returns in any given outline for following reasons:
Your capital losses and gains will be adjusted: If stock or share market investment has been your top investment priority, then prompt income tax return filing will prove extremely beneficial to you. If your total annual income is below the minimum exemption limit, you may not be required to file an ITR, however your capital losses may be measured against your capital gains. Therefore, you can also guarantee that your losses (if any) will be carried forward for the next eight consecutive years, based on whether or not you have submitted your return for that particular financial year.
If you file income tax returns, your tax refunds will be easy to claim: once a certain type of tax is deducted, you can only claim a tax refund for that particular fiscal year if you file an income tax return. Therefore, if you are an NRI that pays TDS on its rent sum, or if TDS is deducted from your bank accounts ‘ fixed deposits, it is important that you file your returns to qualify for a refund.
Once the ITR filing of that year is complete, you will be required to claim your refund ITR Filing Online on the portal.
Loans can easily come to you if you have correctly filed your tax returns: apart from being just another important financial document, the income tax return often serves as proof of your wealth, as it reveals all the profits you received in a single year.
As a result, if you apply for a specific loan amount, NBFCs and other financial institutions actively seek this document. In fact, return filing while having a lower taxable income would prove beneficial in that respect.
You will be able to claim your tax deductions very easily: if you earn more than Rs.3 lakh (which is the standard exemption limit) and also request multiple exemptions to be your income down to that level, you will definitely be required to submit your ITR for that particular fiscal year. Even if you have no tax liability, submitting a tax return is still a mandate if you are looking for any future deductions.
Owning assets (foreign assets) will be much easier: the law requires anyone to file their income tax returns accurately if they have any foreign assets in their possession. This provision also includes any immovable property such as a bank account that you may possess. Failure to comply with this law may result in penalties such as a heavy penalty, and is also considered a serious economic offence.