• HDFC
• 31 May 2019
• e-Tax

HDFC, Tester

An income tax return is a document which taxpayers submit to the Department of Income Tax showing how much money they made in the previous year and how much money they paid in taxes. The purpose is to show that the taxpayer met his legal obligations to pay the government.

 

It is a mandate globally that income tax return should be filed within the pre-determined due date failing which the assessee may invite penalties or show cause notice from Department of Income Tax for non filing of income tax return.

 

Importance or Benefits of filling tax return

 

• Responsible Citizen - Filing of income tax returns regularly is a sign that you are paying your taxes on time and adhering to the individual compliances and fulfilling the laws of the land.
• Mandatory – It is mandatory to file income tax returns in certain conditions – non filing of ITR, if fulfilling those conditions may lead to penalties or show cause notice from income tax return.
• Credit or Financial Worthiness – Financial institutions or banks evaluate your financial worthiness to provide credit line – all based on your income tax return filed. So if you wish to have a financial credit rating file your income tax return and on time
• To claim Tax Refund – if taxes paid in your PAN is more than the tax liability – to claim excess tax paid you would need to file tax return to claim the refund.
• To claim any losses during past years – You are allowed to claim losses to set off against your income if the returns are filed on time in previous years
• Visa Application – In many countries while issuing Visa they check your financial worthiness like banks does. Filing of income tax return on time and regularly increases the chances of getting the Visa of countries you wish to travel.
• Filing returns may prove useful in case of revised returns.
• Income tax return is essential for making any investments and goes to prove that you have a valid source of income to make such investment.