August 24, 2021
There are many benefits of filing tax returns. Though, filing tax returns in not mandatory for everyone. A person has to file Income Tax Returns (ITR) if he has a gross total income exceeding the tax exemption limit. Still, one should file tax returns to avail many benefits even if his income is exempted from tax.
Here are four benefits that one can avail by filing tax returns on time.
Use ITR as address proof: Do you know that the Income Tax Assessment Order can be used as an address proof! Yes, it is one of the officially approved address proofs by the government authorities and can be used to open bank accounts, etc.
ITR helps in getting bank loans: Whenever you apply for a loan from banks, they will ask for a copy of three-years ITR. Yes, it is one of the mandatory items in their list. Banks want to access your payback capacity. And they get the idea of your income from the ITR that you file.
ITR is mandatory to get Visa approval: There are many consulates who ask for ITR before granting visa to their respective countries. If you are applying for a US Visa, they might ask for a copy of three-years of your ITR.
Document that proves you earn: Yes, many times you can be asked to provide documents supporting your incomes. Your landlord may ask for it before signing the rent agreement, your future in-laws may ask for it to authenticate your claim of income, etc. In all these situations your ITR comes very handy.
Claim income tax refund: And finally, you can claim the excess TDS if you have filed your ITR on time. Companies deduct a certain portion of your salary as tax and submit that to the Income Tx department. It is called tax deducted at source. Companies evaluate your investments, and on the basis of that they calculate the rate of TDS. In case your have invested more than the assessment, your taxable income would decrease. This means you become entitled for return of excess tax cut as TDS. And you can claim that refund only when you have filed your ITR on time.
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