ITR Filling – 8 benefits, even your income is below taxable limit?

Are you filling out your ITR return? Yes/No. There are 8 benefits if you file the I.T. returns even if your income is below the taxable limit.

Many people will not return at all for years. As their income is below the taxable limit.

In addition, I have seen people tend to run to the C.A. for filling returns when there is an urgency.

But there are 8 benefits to filing an I.T. return even if your income is below the taxable limit.

itr filling has 8 benefits even your income is below taxable limit.
ITR filing has 8 benefits, even your income is below the taxable limit.

What is an Income Tax Return (ITR)? Is it necessary to file it?

An income tax return is a form where the taxpayer discloses details of his/her income and claims applicable deductions, exemptions, and taxes that are payable on the taxable income.

As a responsible citizen of India, every person who has an income should file an income tax return, because in this way we are actually declaring all sources of income, whether non-taxable or taxable.

According to the Income Tax Department’s rules, everyone has to file an income tax return if one’s gross total income (before allowing deductions under Section 80C to 80U) exceeds Rs. 250,000 in a financial year.

One can also file it even if their income is below the taxable limit or zero (in which case it’s called NIL or zero return). Filing a Nil return will act as proof of accumulated funds in your bank accounts or other investments of you.

There are some benefits of ITR filing even if you do not have taxable income…

 1) ITR filling benefit is a proof of earnings over the years…

You are having low income, and you are not filing as your income is below the taxable limit.

But with that low income also, you can accumulate some good corpus over a few years with your investments in various asset classes like real estate, stocks, Mutual funds, gold, etc.

In the future, a situation may arise that the Income Tax Department may ask you the source of income for the wealth accumulated.

It will be a lengthy and difficult process for you to provide all the income details for all those earlier years.

I.T.R filling will help you as income proof in such situations.

2) ITR filling will be useful for Visa Processing…

If you are planning to go abroad immediately or in the future, then for visa processing, the immigration department may ask for your I.T. return documents.

If you are salaried, then the employer certificate will work as income proof. But for the self-employed and businessperson, filling out the I.T. return is a good thing to do.

3) ITR can be used as income proof…

For salaried employees, a salary certificate will be used as income proof. When it comes to self-employed I.T. returns, they will be useful as income proof.

4) ITR filling will help you in carrying forwarding your capital losses…

If you got any losses in your investments like real estate, stocks, mutual funds, etc., then those losses can be carried forward for 8 consecutive years, and your profit or income will be set off against these earlier years capital losses.

To keep a record of those losses, ITR filling will help you.

You can set off capital losses of the earlier financial year in the present year only when you file your ITR filling done before the due date.

5) ITR filling will help those who have very small earnings…

There may be some people who will get the following income…

  1. Interest from Bank/Company Fixed Deposit
  2. Dividends.
  3. Family pension received by legal heirs.
  4. Tax-free income like tax-free bonds, agricultural income.

These people may think that they do not need to file any I.T. returns as their income is below the taxable limit. But in the above cases, Tds will be deducted.

By filling out the I.T. return, they can show it as proof of their income.

6) ITR filling will help you in claiming a tax refund…

If you have paid an excess tax, that can be claimed back with the tax refund provision by filling out the I.T. return.

Sometimes, Your Employer may deduct high tax from your salary without analyzing your tax savings under 80 C, H.R.A., etc.

Then by filling out the I.T. return, you can claim the tax refund.

ITR filling

7) ITR filling will help you get loans easily…

If you plan to go buy or construct a house, then you may need a housing loan.

In such cases, banks will ask you for income proof. As I.T. return is useful as income proof.

Banks will give loans based on your IT returns.

These banks may ask for the last 2 or 3 years I.T. return for giving you any kind of loan.

8) You will get more life insurance coverage from the life insurance companies if you file ITR…

We all know life insurance is required for income earners in the family to protect dependents from the financial loss when an income earner dies suddenly.

But forgiving higher insurance coverage, life insurance companies will ask for IT returns. As there is a law that according to income only they have to give life insurance.

In such a case, I.T. return will help you.

Conclusion on ITR filling benefits…

I hope you understood I.T. return filling benefits, and you will start filling them this year and gain the above 8 benefits.

Read an article about Apgli/Tsgli—Why it should be modified by governments? Click here to read.

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Also, read the article about the new NPS taxation rules for 2019. Click here to read.

Read the article about the time value of money—how it will help you in taking the right decisions.

Also read about Hiding Tax—Why it is tough now?…

And read about Paying zero tax on your white income—How?…

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And read about DTAA rules. All you need to know…

 

 

 

 

 

 

 

 

 

 

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