Benefits of Filing of ITR

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With the advancement of technology BJP Government took a step towards DIGITAL INDIA in which everything will be done on a click of mouse. The CBDT considering this move made it compulsory to file the Income Tax Returns (ITR) also known as Annual Returns online. The process is known as E-filing of returns.

  • What is ITR?

After the end of Financial Year the tax payers are given a time span according to the case to declare their total holdings and the profits/ gains earned by them during the Previous Year if audit of the records is not compulsory a period of 4 months is given  and a period of 6 months if auditing is compulsory that statement is called as Income Tax Return and it is filed online in www.icometaxindiaefiling.gov.in.

  • Advantages of Filing of ITR.
  1. Easy and Speedy Sanction of Loans:-The ITR serves as a proof of income earned by an individual during the relevant Assessment Years. It helps to determine credit worthiness of the individual which helps in fast and convenient sanction of loans.
  2. Carry Forward Of Losses: – If you fail to file ITR you can’t carry forward the losses incurred and also deductions will not be claimed of such losses in next AY’s. Capital losses are one such example whose losses can’t be carry forwarded.
  3. At the time of Visa Processing For Immigration: – In order to obtain VISA you need to furnish the returns at the time of interview. It will serve as an evidence of your intention of returning back showing the stable sources of income you have.
  4. Government Tenders: – If an individual wants to file a government tender he require ITR of 5 previous years. This will show the financial status and how far you could fulfil your obligations.
  5. For accidental Claims In Third Party Insurance:- Life is uncertain and during accidental death an individual’s legal heirs are required to present the ITR of past 3 years which is required to determine the amount of claims. Missing returns may result in lower claims.
  6. For Start Ups Funding: – ITR are used in statistical analysis. They not only show profitability but also the scalability and cost parameters.
  7. To trade in stocks, obtain credit cards you need to furnish 3 years ITR. Also deductions and refund of excess payments could be demanded only if you file an ITR.
  • Some Limitations of Not Filing ITR.
  1. You have to pay interest if you file the ITR at a later date u/s 234A of Income Tax Act.
  2. You could be liable for heavy penalties and chances of prosecution and notices will be more if you fail to disclose your income correctly.
  • Different Forms of ITR.
ITR Description
ITR 1 (SAHAJ) For Individuals having Income from salary and Interest
ITR 2 For Individuals & HUFs not having Income from Business or Profession
ITR 2A For Individuals and HUFs not having income from Business or Profession and Capital gains and who do not hold foreign assets
ITR 3 For Individuals/ HUFs being partners in firms and not carrying out business or profession under any proprietorship.
ITR 4 For Individuals and HUFs having income from a proprietary business or profession.
ITR 4S (SUGAM) For Individuals/HUFs having income from Presumptive business.
ITR 5 For persons other than

Individual

HUF

Company and

Person filing ITR-7

ITR 6 For Companies other than Companies claiming exemption under Section 11
ITR 7 For persons including companies required to furnish return under section 139(4A) or Section 139(4B) or Section 139(4C) or Section 139(4D) or Section 139(4E).

Some Common Tips

  • Use your personal E-mail as it will help in easy communication from the department leading to timely response of the notices served if any.
  • Check Form 26AS for checking TDS Status.
  • Disclose all incomes to claim exemption and deductions.
  • File the return as soon as possible to avoid last minute rush.

So, every responsible individual should file the ITR on timely basis to avoid interest, penalty, prosecution, scrutiny from the department.

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