BENEFITS OF FILING INCOME TAX RETURN

Every tax payer is required to file voluntary returns within the specified time limit as per Section 139 of the income tax act. There are various benefits of filing an income tax return some of which are noted below for your information.

Ø  Easy Processing of Loans – Filing income tax returns creates a financial background by creating a financial credibility of the assessee which in turn is very helpful for easy processing of loans from the banks.

Ø  Foreign Travel – Visa procurement for foreign travel needs proof of income tax returns.

Ø  Carry forward of losses – Some losses such as Speculation Loss, Business Loss, Capital Loss, Loss from activity of owning & maintaining race horses can be carried forward only on filing the income tax returns before the due date.

Ø  Tax Refund – In order to claim refund of any excess tax paid it is essential to first file the returns.

Ø  Passport Application – Income tax returns can serve as proof for Non ECR (Non Emigration Check Required) while applying for passport. The applicant needs to produce a copy of proof of assessment of income tax returns & actual payment of income tax for last one year or income tax statement that is stamped by the income tax authorities.

Ø  Insurance Claim – In case of accidental death, during court trial insurance company needs proof of income to arrive at accidental claim. If any return is missing this could lower the claim amount because court takes ITR as the only evidence. The formula for claim is by multiplying the yearly income by the expected life of the deceased.

Ø  Government Tenders – For obtaining government tenders, registration on panels, etc. income tax returns are checked by the tender scrutiny committee and five to seven ITRs are considered to see whether the applicant (contractor) has done the work of that much amount earlier or not. So, to enlarge your business horizon and obtaining more tenders from the government or private bodies one need to file the regular returns every year.

Ø  High Life Risk Cover – Buying a high life cover of Rs. 50 lakhs or One crore are available only against your income tax returns which are needed to verify your annual income.

Ø  Undisclosed Foreign Income & Assets – Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 has come into existence wherein any foreign income or assets, which has not been included in your income tax returns, needs to be disclosed & tax has to be paid on the same.

Ø  Address Proof – In many cases income tax returns are also accepted as your proof of address.