Income Tax Return (ITR) filing is an annual practice that is mandatory for citizens earning over and above INR 2,50000/- per year. The government of India has rolled out various tax slabs that mention the percentage of tax that a person is liable to pay depending upon the income they earn annually.
Apart from the percentage of citizens that fall under the umbrella of filing tax returns, it is also important to understand that people who are below taxable brackets should also file ITR. It is because filing ITR has multiple benefits devoid of the fact whether you earn more or less than the prescribed amount.
This article talks about several benefits of filing ITR and why you should be doing it annually:-
Self Explanatory Document About Your Income
An ITR serves as a detailed document enlisting all possible sources of your income in the past and present. This gives complete assurance about your credibility to the parties from whom you seek financial help.
Easy Loan Processing
In contemporary times, practically if you plan to invest money in building a home, buying a vehicle, or any big-budget investment, a loan is the first option that comes in handy. ITR is a pivotal financial credibility document that saves you from the toil of getting trapped in the long documentation process to get the loan approved by the banks.
Insurance Policy can be Procured
A timely and responsible tax-payer gets to buy an insurance policy that offers big cover. An ITR is a proof that a person is not a tax-evader and maintains transparency in financial dealings.
Hassle-free VISA Processing
Tax compliance is a crucial subject in foreign nations. And when you decide to switch countries, embassies are stringent about your current financial history too. If you submit the ITR filled in the past, the chances of your VISA getting approved are high.
Fetches Credit Card Effortlessly
An ITR is a panacea to prove your financial standing. If you wish to apply for a credit card and while applying for it, you submit ITRs, there is a guarantee that your credit card application won’t face rejection.
Save You From Paying Extra Tax
A lot of people invest their extra savings in the form of Bank fixed Deposits (FDs), or Mutual Funds, and other possible sources of investment. However, after a certain threshold, the profit earned on these sources of investment is taxable. Therefore, one can completely avoid paying taxes if they have filed ITR in the past and for the current financial year.
*Disclaimer - The information provided above is only for information purposes to spread financial knowledge and enhance literacy among our readers. It shouldn’t be taken as financial advice by anyone.