Benefits of Filing ITR Even If Your Income is Below Taxable Limit

As an individual falling into the above non-taxable income bracket, you may not see the relevance of filing your tax return since you are in the exempt category. Moreover, if you have any other investments then your income slab rate might increase, resulting in a higher income bracket and taxes being due. Conversely, you may also lose out on a tax refund owed to you by not fling your taxes. Additionally, even if you belong to the exempt category (before 80c deductions), filing your tax return can have a beneficial impact in more than one aspect of your life, that you never probably considered.
Top 5 Benefits of Filing Income Tax Return
A filed tax return is an important and valuable document that can help you in the following situations:
Advantages of e-filing of Income Tax Return
Visa Processing – Whether your plans are in the immediate future or not, if you are planning on traveling abroad, you will realize that visa processing requires that you submit your tax returns for the past few years, to the relevant country’s embassy/consulate, including the UK, Europe, Canada and USA.
Loan Processing – Regardless of the type of loan, most banks will ask you to furnish your tax returns for the past few years to understand your financial situation. Having your tax returns on hand can speed up your loan processing time.
Carry Losses Forward – As per income tax laws you can carry forward losses (capital loss, business loss, etc.) to offset any future income, for up to eight years consecutively. So, even if you have fall into the taxable income bracket you can carry forward and adjust your losses against your future taxable income by filing your tax return in time.
Refund – When employed, your employer will deduct TDS on your income. However, if you have made investments that are tax deductibles, it reduces your taxable income. So, the TDS deducted can be refunded, but only If you file your taxes. The same holds true for TDS deducted by any other sources.
Avoid Penalties – While, you may not immediately receive a notice from the tax department for failing to file taxes, you may eventually receive one. If it turns out you failed to file your returns though you were required to file it, then you might be penalized up to Rs 5,000-10,000 and might face interest payment under section 234A.
So, while in the past you may have avoided filing taxes, this brief lesson in the virtual tax classroom, has hopefully enlightened you on the many benefits of filing your tax return.