Are you getting ready to submit your income tax returns (ITR)? It’s that time of year again. When people are scurrying to gather necessary documents in order to file their taxes on time.
Also Read: Income Tax Return Filing
While the internet has made tax returns easier to file, many taxpayers still find it a monumental undertaking.
In fact, some people believe that filing taxes is optional and even unnecessary.
In reality, tax filing is a legal requirement for any assessee who earns more than the basic exemption threshold in a given fiscal year.
- Filing taxes demonstrates that you are accountable.
Furthermore, contributing to the national income will benefit you in a variety of ways. Let’s look at some of the reasons why submitting tax returns is so crucial.
You must understand your tax obligations and follow the rules in a timely and lawful manner as a responsible citizen of the country. Filing returns enhances your credibility and reliability. On the other hand, not filing your return on time can have negative implications.
- Return filing is required in various situations.
Even if your current year’s gross income is below the lowest tax level. Filing reports voluntarily can help speed up the registration of immovable property. Even though it is a NIL, several states demand the submission of a three-year income tax return. This allows for smooth transaction processing.
- Your loan or credit card provider may request a copy of your tax return.
The IT department receives tax returns, which serve as standard proof of income. When applying for a credit card or a loan, this comes in handy (a housing, education or vehicle loan). Banks and other lending organizations need to know about your financial condition, and the ITR is a reliable document for doing so.
As a result, submitting taxes makes obtaining funds and processing credit card applications easier.
- If you want to make a claim for compensation for past losses
You can recoup losses (whether speculative or non-speculative, short term or long term) from the previous year by paying taxes within the allowed time frame. If you don’t file your ITR on time. You won’t be able to carry forward unadjusted losses to the next year or take advantage of the IRS’s set-off benefits.
Suggested Read: Income Tax Planning