Benefits of Filing Income Tax Return on time

ITR Overview

ITR is a form of taxation in which you have to disclose all the income details and pay tax on your income. One must file ITR every year. The income of an individual or business determines the tax liability. If the income of individuals or companies increases by a certain limit, they must file Income Tax Return in India.

Income Tax return filing in India is necessary for every individual, company, business, and large company. The Indian government has also exempted some sections of individuals who do not have to file an income tax return. However, it is more beneficial to file tax returns to gain several benefits in the future.  This blog lists the various benefits of ITR filing in a business or company.

When to file an income tax return?

The date of ITR filing varies according to the type of individuals and companies.

1. 31st July if there is no tax audit done

2. 30th September if tax audit is done

There are several forms to file ITR such as ITR1, ITR2, ITR3, ITR4, ITR5, ITR6, and ITR7. You can either pay income tax returns online or offline.

Benefits of ITR on Time

Filing Income Tax returns is the most significant step after the incorporation of the company. It is also necessary for salaried individuals and businessmen to file ITR every year. There are various benefits of Income Tax Return Filing such as:

1. No hassles

In the case of non-filing of ITR, you will get the notice and calls from the IT department. After filing tax returns, you will not get a repeated notice from the IT department. You can run your business smoothly without the hassles of late tax payments or fines due to non-payment of tax.

2. Tax refund

Every company or individual who files an income tax return is eligible for a tax refund. Many salaried individuals and businessmen with a high yearly income will get a tax refund. In this way, you can also increase your savings by filing income tax returns.

3. Easy process Loan approval

Filing income tax returns every year will help in getting loans easily. Whether you want a loan for buying a new home or starting a new business, ITR filing helps a lot. It is simple to apply for a loan by submitting a copy of the income statement.

You will need to submit an ITR report while applying for any kind of loan. Without ITR, you may not get a loan easily. So, it is necessary to file ITR every year to get any loan quickly.

4. Acts as an address proof

ITR filing receipt will be considered as address proof while submitting documents for loans. It will also act as address proof when you want to apply for new credit cards. There are many cases in which you have to submit your income proof. ITR receipt will become income proof in many cases.

5. Quick visa process

Are you planning to settle abroad in the future? Then you must file ITR every year. An income tax return receipt will be of much help when you want to apply for a new visa. Even many visa consultants and embassies will ask for a copy of the ITR receipt and some other documents. Individuals who file returns every year will get the visa within a year or so.

6. Saves you from paying interest

According to Sections 234A and 234B, individuals who do not file income tax returns yearly have to pay interest. ITR Filing for Individual and Businesses in India will save your interest on payments. Besides, timely filing of ITR will also help to maintain your reputation in the market.

7. Helps in carrying forward your losses

Timely filing of ITR will help to carry forward all your yearly losses of businesses. These losses will be adjusted against the income in the coming years. It means some losses will be deducted from your future income. Apart from that, the tax liability will also be reduced in the future.

Documents required for filing the Income-tax return 

ITR for Business and profession

For businessmen and professionals, the following documents must be submitted for ITR filing.

Ø Balance sheet

Ø Profit and loss statement

Ø Cash register

Ø Statement of a bank account with passbook

Ø Any other documents that show total expenses incurred in the business

Ø You must submit an audit report if your business turnover is more than INR 25 lakhs in the profession and INR 1 crore in any business.

Ø Other documents for maintaining books of accounts of business and profession.

ITR from residential property

You have to also file ITR on income earned from any residential property. You have to submit the following documents to file ITR from the residential property such as:

Ø Details of tenant such as name, PAN card, and address proof

Ø Bank statement showing rent received throughout the year

Ø Housing loan repayment certificate for deduction of interest.

Ø TDS certificate on rent received

Tax on income from salary

If you are a salaried individual, submit the following documents while filing ITR such as:

·        Salary certificate in Form 16 received from the employer. This certificate includes DA, basic salary, HRA, other allowances, and perquisites.

·        If you are a pensioner, submit a pension certificate or a bank statement.

Tax on income from capital gains

You have to submit the following documents to file ITR on income from capital gains such as:

·        Stock trading statement with purchase and sales details

·        Mutual fund statement, debt funds, SIPs, purchase, and sale of equity funds.

·        Capital gain details and purchase and sale prices in case of sale of house property or office property.

Final words 

ITR filing is one of the most beneficial steps for individuals, businesses, and professionals. It builds goodwill for your company or business and helps to apply for loans whenever you want to expand your business activities throughout the country.

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