If you go around the web at the present day, you will find only two topics in which most of the Indians are taking an interest. Indians are reading, posting, commenting and sharing mostly these two topics only. The first is the FIFA World Cup 2018 and the second is ITR 2018.
The income tax return (ITR) has become one of the widely discussed topics of the present day as the due date for declaring returns is growing near. Having left with only three more weeks in hands to get prepared with all your documents to claim for income tax return, most of the people are found busy nowadays either to have a research online or discussing with some of their friends or colleagues. While most of the people are busy with the ITR, some are simply just relaxed as their income is not taxable.
This is a very widespread misconception of Indians that, if their salaries fall below the taxable bracket they shouldn’t be filing ITR (Income Tax Returns). However, that is not true. Filing ITR is very important even if your income is not taxable. Here is the income tax slab of FY 2018-19 for Indians on the annual Income.
Tax rates for individuals below 60 years of age:
|Taxable income||Tax Rate|
|INR 0 to INR 2,50,000||Nil|
|INR 2,50,000 to INR 5,00,000||5%|
|INR 5,00,000 to INR 10,00,000||20%|
|Above INR 10,00,000||30%|
So all those Indians whose annual income is INR 0 to INR 2,50,000, they neglect the income tax filing for returns as their income is tax-free and there is nothing to get in return. Though ITR is not compulsory but is it is very important to file a return in income tax as it works as our income proof also. If you file an ITR you will not be in need to give any income proof while applying for any government subsidy. Along with that, there are many other benefits which you can avail by filing income tax returns.
Here are the Benefits of Filing ITR
1) Claiming Tax Refund- Even if your income is below 2.5 lakhs, you may have paid taxes on it. One can initiate an online filing of income tax return to get a refund on tax paid. One can get a refund on taxes paid via TDS, or self-assessment, in the relevant financial year. Ignoring filing ITR can possibly let the refund go. So it is better to file ITR so that no chances of refunding are missed by us.
2) Getting A Visa– While processing for a visa, an ITR is demanded by many countries. If you are planning to go abroad for a job upgradation or your kids are about to go to overseas for pursuing higher education, you may need to furnish your income tax returns documents. Some of the embassies and consulates ask for Income tax returns for a couple of years for a visa application.
3) Ease At Applying For A Loan– Your net income and your loan eligibility is closely connected. To become assured on the income of a loan applicant, most of the financial institutes ask for at least last two years of ITR files. If you are a self-employed person and applied for a personal loan then furnishing ITR becomes mandatory. When you file a return despite being out of the tax slab increases you loan approval chances as compared to the ones who haven’t yet filed for the same.
4) Carrying Forward Capital Losses– If your income is below tax slab and still you are investing in equity market have been buying or selling shares, filing an income tax return may be beneficial for you. Though as mentioned above that filing ITR is not compulsory but the income tax act helps you to carry forward losses for eight consecutive years, and offset it against future gains and income. An ITR filing helps you to carry forward the incurred losses if you file it every year without a break.
5) ITR Is Mandatory If You Own Foreign Assets– If you own any foreign asset while residing in India, it becomes compulsory for any Indian to file an ITR irrespective of his/her income. Whether it may be a movable or non-movable foreign asset, declaring all of them is necessary. Failing to do so can lead a person to face fines and penalties. Moreover, this is considered an economic offence.
Filing an Income tax return doesn’t only help you in income tax exemption, it indeed helps you in many different ways. While being a responsible citizen we are to pay taxes, to get a return on paid tax is our right. Every citizen must make the balance between paying and receiving back the tax. So get ready to file a return even if your income is below the minimum income to file tax return in India.