Being an Indian citizen and taxpayer of the country it is important to look for yearly changes in taxation norms. Due to the ongoing COVID-19 pandemic, the central government has announced Tax-related benefits and relief measures. The question is Are you covering these benefits by filing Income Tax returns on time?
1. EASY LOAN APPROVALS
Income tax returns apart from being an important financial document also act as proof of your income. It indicates all the earnings you have made in a single year. Many financial institutions including the NBFCs, seek this particular document, once you made a request for a loan amount.
ITR receipt will work as a wonder if you’re planning for a home loan, vehicle loan, personal loan, etc. In some cases, it can also benefit you with credit card proceedings. Generally, the last three years’ ITR receipt is asked for a hassle-free process.
2. QUICK VISA PROCESSING
This is the best benefit a working individual can get. Either you’re planning to take up a job or conduct a business conference outside India, copies of tax returns, filed in the past are requested by the immigration authorities.
Embassies of the United States, United Kingdom, and Canada are particularly concerned with your tax compliance while processing your foreign visa applications. However, this process is eased with the filing of income tax returns. So make sure to file this year’s income tax return to make a foreign visit next year.
3. CLAIM TAX REFUND
Filing an ITR can save your taxes on the income from savings instruments like term deposits and also on the dividend income. Individuals can claim refunds through ITR refunds as the above-mentioned instruments are liable for taxes.
You can only claim a tax refund if you are filing an ITR for that particular fiscal year.
4. CARRY FORWARD YOUR LOSSES
It is mandatory for an individual to claim specified losses from capital gains, professions, or business when filing a tax return. If your gross income is less than the exemption limit then filing an ITR might not be a requisite, however, your capital losses can be adjusted against your capital gains.
Additionally, you can ensure that your losses are carried forward for the next eight consecutive years, depending on whether or not you have filed your return for that particular fiscal year.
5. AVOID PENALTY
As per the government, you can file your IT returns before December 31 in case you have missed the original deadline of July 31, which was extended to August 31 this year.
But, beware a penalty of INR 5,000 comes with it. Not only this, if you miss December 31 deadline too then you will have to pay INR 10,000. However, if you have an income of less than INR 5 lakh, then a standard penalty of INR 1,000 is applicable.