ITR or the Income-tax return filling is not just a duty but is also a responsibility of every taxpayer. This process allows you to contribute in country’s development and also gives the opportunity to elevate the living standard. So, this blog post let every citizen know about the benefit of filling the Income-tax return.
1. Concept of Income Tax Return
The Income Tax Act 1961, make it compulsory for all the taxpayers to file the Income Tax return and for this several forms like Form 16 for the salaried, ITR 1, ITR 2, ITR 3, ITR 4, ITR5, ITR 6 and ITR& are in the provision. Under the Income Tax return, the assesse or the taxpayer has to declare his/her annual income and also has to show the investment made by him/her in the particular financial year.
2. Eligibility to File ITR:
Any person holding a valid credit, pays for foreign travel for him/herself or for any other individual, is a member of any club that has a membership fee of Rs. 25,000 or more, has his/her own vehicle or own a property anywhere in India is eligible to pay Income Tax as per the framed law.
3. Tax Slab in India
The annual income is classified under multiple slabs like no tax is applicable to the individual whose annual income is upto Rs. 2,50, 000 INR. Similarly, a person having an annual income between Rs. 2,50,001 and Rs. 5,00,000 is eligible to pay a tax of 5 percent. A person with an annual income between Rs. 5,00, 001 and Rs. 10,00,000 is eligible to pay 12,500 + 20% of total income exceeding 5,00,000. Following this, a person with an annual income of more than Rs. 10,00,000 is eligible to pay 1,12,500 + 30% of total income exceeding 10,00,000.
4. Benefits of Filing Income Tax:
- The first biggest advantage of filing ITR is the easy sanction of the home loan application. As per the guidelines and law framed by the Government of India, the banks ask for the proof of income tax filing that too of at least three years. For example, if you have applied for a home loan this year, then the banks require the copy of ITR filing for the FY 2015-16, FY 2016-17 and FY 2017-18. This is an important thing to know if you are planning to apply for a home loan.
- The second big advantage of filing ITR is to claim TDS refund. The terminology TDS means Tax Deduction at Source and allows a person to reclaim the deducted amount. For example, if investment is in FD [Fixed Deposit] and an interest of 10% is earned while not having the idea of whether he/she is eligible to pay tax. In this scenario, you can claim for refund of this amount by filing the Income Tax return.
- The next benefit is to carry forward loss. A taxpayer can ease the burden of taxpaying for the next five years by producing the proof of loss incurred in the year. The loss can be shown by filing ITR and the same can be carried forward to eight consecutive years.
- Another benefit of filing ITR is easy VISA Processing. During the VISA interview process, the foreign consulate can ask for ITR receipts of a couple of years by you in case of foreign travel. The consulates of different countries demand ITR receipts for different tenures.
- Life Insurance & Income proof are the two main advantages of filing ITR. Today, the insurance providers ask you to produce ITR receipt in case of opening a term policy of or above Rs. 50 lakhs. Similarly, the salaried professional gets Form 16 from the company that proves their annual income. However, the businessman or the self-employed people can only prove their annual income by ITR receipts and thus the filing of Income Tax is beneficial for all the people.