Here are some reasons why you should file your taxes every year.
You should file your income tax returns for a variety of reasons. We examine some of the reasons why it is critical to complete this task without fail.
Also Read: Income Tax Return Filing
You become a responsible citizen as a result of it.
Individuals who make a certain amount of money each year must file a tax return by a certain date, according to income tax legislation. You will be penalized if you do not comply. Even if it is not required, individuals who earn less than the stipulated maximum may file returns. Filing your taxes demonstrates your responsibility as a citizen.
Tax deductions are available to you.
To minimise one’s tax bill, the Income Tax Act allows a person to claim multiple deductions under various sections. However, in order to claim these deductions under various parts of the Income Tax Act, you must file your tax returns on time each year.
Tax refunds are available.
When Tax Taken at Source (TDS) is deducted from your earnings, you may be eligible for a refund from the Internal Revenue Service if the total taxes you are owed are less than the amount deducted. You can only get a refund if you file your tax taxes by the deadline. You can earn refunds on your excess tax payments if you file your income tax returns.
It might assist you in adjusting your capital gains and losses.
You will almost certainly experience capital gains and losses if you invest in equities. Capital losses can be offset against capital gains under the Income Tax Act. However, filing income tax returns is required for this. In addition, provided you file your Income Tax returns on time, you can carry any capital loss forward for the next eight financial years.
Take out a loan or use a credit card.
When you apply for a loan or a credit card, the bank will look into your financial situation. If you file your income tax returns on a regular basis, it proves that you have a steady income and have paid the proper taxes on it. Before accepting your home loan, auto loan, or credit card, financial companies will ask to view your IT returns for the previous several years. When purchasing higher-value term insurance, insurance companies may also need IT receipts. You can increase your creditworthiness for future loans by filing your income tax returns on time.
Aids in the processing of visas
When you’re considering an international trip, being on top of your IT returns filing will come in helpful. If you are not visiting someone who acts as your sponsor and are traveling overseas and applying for a Visa, the foreign embassy will want proof of your income. You will be required to provide income tax receipts for a specific time period.
Finally, whether you are in a tax band or not, whether your annual income is Rs. 4 lakh or Rs. 40 lakh, you must file an Income Tax Return each year. Being on the right side of the law, it goes without saying, makes a positive difference.
Suggested Read: Income Tax Planning