{"id":111,"date":"2018-06-13T11:21:24","date_gmt":"2018-06-13T11:21:24","guid":{"rendered":"https:\/\/blogindifi.wordpress.com\/2018\/06\/13\/why-income-tax-return-filing-is-important\/"},"modified":"2024-05-28T10:51:03","modified_gmt":"2024-05-28T10:51:03","slug":"importance-of-income-tax-return-filing","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/","title":{"rendered":"Why Income Tax Return Filing Is Important"},"content":{"rendered":"<div class=\"wp-block-image size-medium wp-image-690\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/blog3.indifi.com\/wp-content\/uploads\/2018\/06\/Why-Income-Tax-Return-Filing-is-Important-450x300.jpg\" alt=\"Why Income Tax Return Filing is Important\" class=\"wp-image-690\" width=\"832\" height=\"555\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2018\/06\/Why-Income-Tax-Return-Filing-is-Important-450x300.jpg 450w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2018\/06\/Why-Income-Tax-Return-Filing-is-Important.jpg 660w\" sizes=\"(max-width: 832px) 100vw, 832px\" \/><figcaption class=\"wp-element-caption\"><em>Why Income Tax Return Filing is Important<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>Gearing up to file your income tax returns (ITR)? It\u2019s that time of the year again when people are scrambling to collect relevant documents to complete the tax filing process on time.<\/p>\n\n\n\n<p>While the online route has made the filing of tax returns a breeze, many taxpayers still find it a herculean task.<\/p>\n\n\n\n<p>In fact, some individuals believe tax-filing is voluntary and not even necessary.<\/p>\n\n\n\n<p>Tax-filing is infact, a legal obligation that must be fulfilled by every assessee who earns income above the basic exemption slab within a given financial year.<\/p>\n\n\n\n<p>Table Of Content<\/p>\n\n\n\n<ul>\n<li>Filing Returns Is a Sign that You Are Responsible<\/li>\n\n\n\n<li>Filing Returns Are Mandatory In Some\u00a0Cases<\/li>\n\n\n\n<li>Your loan or Card Company May Want To See Your\u00a0Return<\/li>\n\n\n\n<li>If You Want To Claim Adjustment Against Past\u00a0Losses<\/li>\n\n\n\n<li>Important for Visa Processing<\/li>\n<\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_67_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#Filing_ITR_Is_a_Sign_that_You_Are_Responsible\" title=\"Filing ITR Is a Sign that You Are Responsible\">Filing ITR Is a Sign that You Are Responsible<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#Filing_ITR_Are_Mandatory_In_Some_Cases\" title=\"Filing ITR Are Mandatory In Some\u00a0Cases\">Filing ITR Are Mandatory In Some\u00a0Cases<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#loan_Card_Company_May_See_ITR_For_Proof\" title=\"loan \/ Card Company May See ITR For Proof\">loan \/ Card Company May See ITR For Proof<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#If_You_Want_To_Claim_Adjustment_Against_Past_Losses\" title=\"If You Want To Claim Adjustment Against Past&nbsp;Losses\">If You Want To Claim Adjustment Against Past&nbsp;Losses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#Important_for_Visa_Processing\" title=\"Important for Visa Processing\">Important for Visa Processing<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#Important_Documents_for_Loan_Applications\" title=\"Important Documents for Loan Applications\">Important Documents for Loan Applications<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#Who_is_Obligated_To_File_Income_Tax_Returns\" title=\"Who is Obligated To File Income Tax Returns?\">Who is Obligated To File Income Tax Returns?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_ITR_Is_a_Sign_that_You_Are_Responsible\"><\/span>Filing ITR Is a Sign that You Are Responsible<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>What\u2019s more, you stand to benefit in numerous ways by contributing to the national income. Let us take a look at some of the reasons why the filing of tax returns is important.<\/p>\n\n\n\n<p>As a responsible citizen of the country, you must understand your tax obligations and comply with set rules in a timely and lawful manner. Filing returns add to your credibility and trustworthiness. In contrast, the consequences of not filing your return on time can be unfavorable. Here are few steps to <a href=\"https:\/\/www.indifi.com\/blog\/check-income-tax-2022-23-refund-status\/\">check income tax 2023 &#8211; 2024 refund status<\/a>.<\/p>\n\n\n\n<p>Tax evaders can come under scrutiny, receive notices and bear the brunt of hefty penalties. In the event of extreme cases, the IT department can also initiate criminal action.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_ITR_Are_Mandatory_In_Some_Cases\"><\/span>Filing ITR Are Mandatory In Some\u00a0Cases<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even if your gross income for the current year falls below the lowest tax bracket, filing returns voluntarily can be a big plus for speedy registration of immovable properties. Some states require submission of income tax return of the past three years even if it is a NIL. This enables smooth processing of the transaction.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"loan_Card_Company_May_See_ITR_For_Proof\"><\/span>loan \/ Card Company May See ITR For Proof<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Regular tax filing is recorded with the IT department and is standard proof of your income. This comes handy when applying for a credit card or loan (a housing, education or vehicle loan). Banks and other lending institutions need to ascertain your financial situation and ITR is a sound document to establish your creditworthiness.<\/p>\n\n\n\n<p>Hence, filing taxes leads to the easier procurement of funds and processing of credit card applications.<\/p>\n\n\n\n<p class=\"has-vivid-green-cyan-color has-text-color\">Also Read: Top 5 Strategies To Save Tax At The Last Minute<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"If_You_Want_To_Claim_Adjustment_Against_Past_Losses\"><\/span>If You Want To Claim Adjustment Against Past&nbsp;Losses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>By paying taxes within the prescribed period you can recompense losses (whether speculative\/non-speculative, short term\/long term) incurred in the previous year with future capital gains. However, if your ITR is not filed on time, you cannot carry forward unadjusted losses to the subsequent year or avail the set-off benefits provided by the tax authorities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_for_Visa_Processing\"><\/span>Important for Visa Processing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Want to travel abroad? Don\u2019t forget to file your tax returns on a regular basis. Financial stability is known to be a prerequisite for visa approval for certain countries.<\/p>\n\n\n\n<p>The consulates of countries like US, UK, Canada among others require copies of your tax returns for the past few years for processing your visa application.<\/p>\n\n\n\n<p class=\"has-vivid-green-cyan-color has-text-color\"><a href=\"https:\/\/www.indifi.com\">Apply For Business Loan Online<\/a><\/p>\n\n\n\n<p>Now that you understand the importance of filing income tax returns, get your act together as soon as possible. However, if you find the ITR filing process confusing and difficult to tackle, hire a professional to help you with it.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Documents_for_Loan_Applications\"><\/span>Important Documents for Loan Applications<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When you apply for a loan to buy something like a car, a new home, or for business purposes, the bank will ask for some documents. These include:<\/p>\n\n\n\n<ul>\n<li>Aadhar card<\/li>\n\n\n\n<li>PAN card<\/li>\n\n\n\n<li>Driver&#8217;s license<\/li>\n\n\n\n<li>Photo ID<\/li>\n<\/ul>\n\n\n\n<p>One key document is your proof of income. Banks usually ask for your Income Tax Returns (ITR) from the last three years. They do this to check your financial history and see if you can repay the loan.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.indifi.com\/msme-loans\"><img decoding=\"async\" loading=\"lazy\" width=\"500\" height=\"91\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-500x91.jpg\" alt=\"Loan for MSMES\" class=\"wp-image-5315\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-500x91.jpg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan.jpg 716w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/figure><\/div>\n\n\n<p>ITRs are also helpful when applying for a credit card. Credit card companies want to see your past income and tax returns before giving you a card.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_Obligated_To_File_Income_Tax_Returns\"><\/span>Who is Obligated To File Income Tax Returns?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In accordance with income tax regulations, any taxpayer whose gross total income (GTI) surpasses the minimum income tax threshold applicable to their age is required to file an Income Tax Return (ITR). The basic exemption limits are \u20b92.5 lakh, \u20b93 lakh, and \u20b95 lakh for individuals below 60 years, those between 60 and 80 years, and individuals aged 80 years and above, respectively.<\/p>\n\n\n\n<p>There are specific scenarios where individuals must file an income tax return, even if their GTI falls below the basic exemption limit. If you fall into any of the categories outlined below, it is mandatory for you to file an ITR.<\/p>\n\n\n\n<ol>\n<li>If your electricity bill exceeds \u20b91 lakh for a single bill or accumulates to \u20b91 lakh or more during the financial year.<\/li>\n\n\n\n<li>If you have deposited \u20b91 crore in your current accounts maintained with a bank or cooperative bank.<\/li>\n\n\n\n<li>If you are an ordinarily resident individual with income from foreign countries and\/or possess assets in foreign countries and\/or have signing authority for any account outside the country.<\/li>\n\n\n\n<li>If you have incurred expenses of \u20b92 lakh or more for yourself or others for travel to a foreign country.<\/li>\n\n\n\n<li>If your GTI exceeds the basic exemption limit before claiming a deduction on capital gains incurred under any of the following sections \u2013 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>1. Why is filing ITR important in India?<\/strong><\/p>\n\n\n\n<ul>\n<li>Filing ITR is mandatory as per Indian tax laws if your income exceeds the prescribed limits. It helps the government track and assess the income and tax liabilities of individuals and entities.<\/li>\n<\/ul>\n\n\n\n<p><strong>2. What are the consequences of not filing ITR in India?<\/strong><\/p>\n\n\n\n<ul>\n<li>Failure to file ITR may result in penalties and legal consequences. It can affect your financial credibility, limit access to financial services, and lead to legal actions by the Income Tax Department.<\/li>\n<\/ul>\n\n\n\n<p><strong>3. Can ITR filing impact my credit score in India?<\/strong><\/p>\n\n\n\n<ul>\n<li>While ITR filing itself does not directly impact your credit score, a consistent record of timely filings can positively influence your creditworthiness. Financial institutions often consider tax returns while assessing loan eligibility.<\/li>\n<\/ul>\n\n\n\n<p><strong>4. How does filing ITR contribute to financial transparency?<\/strong><\/p>\n\n\n\n<ul>\n<li>ITR filing provides a transparent record of your financial transactions, income, and tax payments. This transparency helps in establishing financial credibility and can be beneficial for various financial transactions and applications.<\/li>\n<\/ul>\n\n\n\n<p><strong>5. Are there any benefits to filing ITR even if my income is below the taxable limit?<\/strong><\/p>\n\n\n\n<ul>\n<li>Yes, filing ITR is advisable even if your income is below the taxable limit. It serves as proof of your income, which can be required for various financial transactions, visa applications, and loan approvals. It also helps in claiming refunds, if applicable.<\/li>\n<\/ul>\n\n\n\n<p><strong>6. Can filing ITR help in obtaining loans and credit cards in India?<\/strong><\/p>\n\n\n\n<ul>\n<li>Yes, many financial institutions require ITR documents as proof of income while processing loan or credit card applications. A consistent record of ITR filing can enhance your chances of approval.<\/li>\n<\/ul>\n\n\n\n<p><strong>7. How does filing ITR contribute to availing tax benefits and exemptions?<\/strong><\/p>\n\n\n\n<ul>\n<li>ITR filing is crucial for claiming tax benefits, deductions, and exemptions. Filing enables you to report your eligible investments, expenses, and income details, allowing you to avail of the benefits provided under the Income Tax Act.<\/li>\n<\/ul>\n\n\n\n<p><strong>8. Is it necessary to file ITR if taxes have already been deducted at source (TDS)?<\/strong><\/p>\n\n\n\n<ul>\n<li>Yes, even if TDS has been deducted from your income, filing ITR is still mandatory. It allows you to reconcile and claim any additional deductions, report other sources of income, and ensure accurate computation of your total tax liability.<\/li>\n<\/ul>\n\n\n\n<p><strong>9. How can ITR filing be beneficial for self-employed individuals and business owners?<\/strong><\/p>\n\n\n\n<ul>\n<li>For self-employed individuals and business owners, ITR filing is essential for documenting their business income, expenses, and profits. It plays a crucial role in securing loans, establishing financial stability, and complying with tax regulations.<\/li>\n<\/ul>\n\n\n\n<p><strong>10. Can ITR filing be done online, and what are the key steps involved?<\/strong><\/p>\n\n\n\n<ul>\n<li>Yes, ITR filing can be done online through the Income Tax Department&#8217;s e-filing portal. The process involves registering on the portal, selecting the appropriate ITR form, filling in the required details, and submitting the return electronically.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Gearing up to file your income tax returns (ITR)? It\u2019s that time of the year again when people are scrambling to collect relevant documents to complete the tax filing process on time. While the online route has made the filing of tax returns a breeze, many taxpayers still find it a herculean task. In fact, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":690,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[12,52,53,14],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/111"}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=111"}],"version-history":[{"count":15,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/111\/revisions"}],"predecessor-version":[{"id":9998,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/111\/revisions\/9998"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media\/690"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}