Article
Why do we file Income Tax Returns?
Many people think that, filing Income Tax Return is a tedious task and avoid filing it without giving second thoughts to it. Well, we would like to tell you that it is not a very healthy practice and there are several benefits that you can reap by filing Income Tax Return, in the end of every Financial Year.
E-Filing Income Tax Return is an annual practice, that is considered as a moral and social duty of a responsible citizen of this country. It is the basis for the government to determine the amount and means of expenditure of the citizens and provides a platform for the assesse to claim tax refund, if they are eligible for any.
Here are the major reasons of filing Income Tax Return:
1. It is a sign, that you are a responsible citizen of this Country.
As per the Income Tax Act, it is mandatory for any citizen having a taxable income to file the Income Tax Return for the relevant Financial Year. The return should be filed by the taxpayer on or before the assigned due date. The tax as calculated must be paid by the individual. Failure to pay tax will invite penalties from the Income Tax Department. The assesses who earn less than the prescribed level of income, can file returns voluntarily.
2. Filing Income Tax Return is Mandatory in certain situations.
Even if a taxpayer is not liable to pay Income Tax, it is recommended that they file Income Tax Return, it is considered as a good practice and it benefits the assesses in the long run. For Example: In many states, registration of immovable property requires the details of tax return of last three years. Filing returns makes it easier to register the transaction.
3. It is helpful in applying for Loans
If you plan to apply for a home loan in future, it is a good idea to maintain a steady record of Income Tax Returns, as the Financial Institution from where you are taking Home Loan will most likely insist on it. In fact, you may even consider filing your spouse’s returns if you want to apply for a loan as a co-borrower. Apart from this, even credit card companies may insist on proof of return before issuing a card. Financial institutions may insist on seeing your Income Tax Returns over the past few years before making any transaction with you.
