Chartered Accountants Mumbai

Benefits of filing income tax returns before the due date

There are many benefits of filing income tax returns before the due date.

Easy loans approvals
Majority of banks ask for a copy of income tax returns for at least three consecutive years to sanction a loan. So if you are planning to take a loan in the future, it can help you if you can furnish your I-T returns.

To claim TDS refunds
As an individual if someone has invested in fixed deposits the interest income is chargeable to TDS at the rate of 10% irrespective to the fact that the individual is liable to pay income tax or not. By filing income tax return you will get refund of TDS deducted if the income is below the taxable limit.

Carry forward of losses
If anyone has suffered losses in a year, then by filing income tax return he can carry forward that loss for next eight subsequent years to set off the same by the future income. This can help reduce the burden of tax in future years.

VISA processing
If you are traveling overseas, foreign consulates ask you to furnish ITR receipts of the last couple of years at the time of the visa interview. Some embassies may ask for ITR receipts of previous three years, while some others may ask for the most recent certificate.

Buying a high life insurance cover
These days life insurance companies asks for ITR receipts if you opt to buy a term policy with sum insured of Rs 50 lakh or more. Government tender: If you plan to start a business and need to fill a government tender, you will need to show your tax returns of the previous years. This, again, is to show proof of your financial status and whether you can support the payment obligation or not.

Self employed
Salaried persons get Form 16 as their income proof but businessmen, consultants and partners of firms do not get Form 16. Hence, ITR receipts become an even more important document for them, provided their annual income exceeds the basic exemption limit of Rs 2.50 lakh. For all sorts of financial transactions, ITR receipts will be the only proof of income and tax payment for the self-employed.

Avoid interest on tax liability
If you don’t file ITR, the belated return could lead to extra interest on monthly basis for the remaining tax payable by you. Penalties and assessments: If any person liable to file tax returns does not file returns within the due date, then he is liable to pay penalty of up to Rs 10,000 for not filing the return within the due date in addition to the assessment findings.

If you don’t file ITR, the belated return could lead to extra interest on monthly basis for the remaining tax payable by you. Penalties and assessments: If any person liable to file tax returns does not file returns within the due date, then he is liable to pay penalty of up to Rs 10,000 for not filing the return within the due date in addition to the assessment findings.

So make sure to file your income tax return on or before due date , i.e., August 31, 2019 (extended from July 31, 2019) to avoid penalties and to take the above mentioned benefits.