Benefits to file Income Tax Return

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An Income Tax Return (ITR) is a form used by individuals to report their income and assets to the tax department in India. It serves as a self-declaration of earnings, assets, taxes paid, and refund claims. While ITRs are usually filed electronically, senior citizens have the option to file them manually as well.

Mandatory ITR Filing:

Individuals with income exceeding the basic exemption limit (such as 2.5 Lakhs/3 Lakhs/5 Lakhs) as per the applicable taxable limit.
Individuals with assets outside India and income from foreign sources.
Individuals paying more than Rs. 1 lakh in electricity bills in a financial year.
Assessees depositing over 1 crore in one or more bank accounts in a financial year.
Individuals spending more than 2 Lakhs on overseas travel during the fiscal year.
Business Turnover: If the turnover of a businessman exceeds Rs 60 lakh during the financial year.
Professional Receipts: If professional receipts (income from a profession) exceed Rs 10 lakh during the financial year.
TDS/TCS Payments: If someone has paid more than Rs 25,000 in Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) during the year. For senior citizens, this limit is Rs 50,000.
High Savings Bank Deposits: If someone has deposited Rs 50 lakh or more in one or more savings bank accounts during the year.

Category of Taxpayer	Due Date
Individual / HUF/ AOP/ BOI (Not required to be audited)	31st July
Businesses (Requiring Audit)	31st October
Businesses requiring transfer pricing reports (in case of international/ specified domestic transactions)	30th November
Revised Return, Belated Return	31st December

Benefits of Filing Income Tax Returns on Time in India:

Avoid Penalty: Filing ITRs on time helps individuals and businesses avoid significant fines and late fees u/s 234F, along with interest charges u/s 234A, B, C
Accidental Claim: Regularly filing ITRs provides proof of income for future accidental claims, as insurance companies require this information to calculate claim amounts.
Proof of Net Worth: ITR serves as the most credible proof of income or net worth, aiding in various purposes like loan applications, insurance coverage, and asset purchases.
Getting Refund: Filing ITRs ensures the possibility of receiving refunds for excess TDS (Tax Deducted at Source) deductions, offsetting tax liabilities and reclaiming deducted amounts.
Eligibility in Loan Applications: Regular ITR filing demonstrates consistent income and tax compliance, enhancing the chances of loan approvals and credit lines from financial institutions.
Carry Forward Losses: Filing tax returns before the due date allows taxpayers to carry forward specified losses from previous years, which can offset future gains.
Protection against Black Money: Timely ITR filing prevents savings from being considered black money, as undisclosed income is viewed as such by the tax department.
Startup Funding: Financial institutions may require previous years’ ITRs to assess business scalability and profitability before providing funding to startups.
Obtaining Government Tenders: Contractors seeking government tenders must file ITRs accurately and on time, as they may face consequences or rejection without proper tax returns.
Buying Insurance with High Cover: Life insurance companies often request ITR receipts for higher coverage policies, as the insured amount depends on the applicant’s income.
Contributing to Nation’s Growth: Filing tax returns contributes to a nation’s development by generating revenue for infrastructure projects and other national initiatives.
Credit Card Application: ITR serves as a primary document for credit card applications, particularly when other income proofs are insufficient, and it also affects the taxpayer’s credit history.
Visa Application: Many countries require ITRs as part of the visa application process, verifying the applicant’s financial situation and income to ensure they can cover expenses.

It is essential to file income tax returns not only for the associated benefits but also as a responsible citizen. Timely filing helps avoid penalties, access credit services, and support various financial transactions.