The Top 5 Reasons to File Your Income Tax Return

Over the previous decade, the Indian Income Tax Department has advanced significantly.

You no longer need to fill out a paper form and take it all the way to Aayakar Bhavan to file your income tax return. This entire procedure can be completed online.

In India, we have a bad attitude toward income tax, and we frequently refer to it as a "tax burden." This money is ours to retain if we have worked hard for it.

Our expectations are high, though, when it comes to providing basic services, creating infrastructure, and boosting power and water supplies. It doesn't occur to most people that all of this spending is directly proportional to the taxes we pay.

Another widespread misconception is that because we are below the taxable threshold, we do not need to file our returns. Even if you are under the legal limit, submitting your taxes will benefit you in the long term.

• To be a responsible citizen

If your Gross Total Income exceeds the basic exemption limit, you must file an income tax return. The basic exemption level is Rs. 2.5 lakhs, while it is Rs. 3 lakhs for senior persons.

If you file your return after the due date, you will be charged a late fee, according to the new modifications from last year.

• To get your TDS refund and carry your losses forward

Are you a professional or a freelancer who works for a business? TDS is almost certainly going to be deducted before they pay you. If the TDS exceeds your tax liability, you may be eligible for a refund. However, you can only do this if you file your tax return.

Aside from that, if you have any short- or long-term capital losses from past years, you can carry them forward to the following year as long as you file your return.

• To get a loan or a line of credit

Banks require your Income Tax Returns from the previous few years as proof of income when you apply for a loan. It's a crucial document that proves your earning potential and, as a result, your ability to repay the loan. This is true for all types of loans, including home loans, vehicle loans, and credit cards.

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• To travel internationally

Your tax returns are one of the most reliable sources of information about your earnings.

It reassures them that you've been earning consistently in your home country. As a result, you are most likely not interested in settling in their country. It also demonstrates that you have the financial means to cover your travel expenses.

• To examine your financial situation

Nobody enjoys reviewing their bank statements on a monthly basis. It's a tedious task.

Filing your tax return forces you to review your earnings, expenses, and investments at least once a year. It offers you an indication of where you stand financially and how you compare to the prior year. Then you can think about your objectives and see what else you can do to achieve them.

Suggested Read: Income Tax Planning