Introduction
Since they have little to no tax liability, many investors decide not to file their income tax returns. Certain investors, on the other hand, only file their previous tax returns with a certified public Chartered Accountant (CA) in the event of an emergency and the necessity to file their final years' ITR. These investors do not file returns for several years.
Who Desires To Submit An Income Tax Return (ITR) and What Is It?
A taxpayer can report their income, claim any applicable exemptions and deductions, and pay taxes on their taxable income by filing an income tax return. Everyone with an income in India should file an ITR as a responsible citizen since doing so enables us to declare all of our income, whether it is taxable or not. Everyone whose gross total income in a financial year exceeds Rs. 5,00,000 (before section 80C to 80U Deductions) is required by the Income Tax Department to file an income tax return. (Tax slabs were changed according to the financial year budget system)
Now as per the financial budget of 2025, the total annual income of any Indian Citizen is less or equal to 12 Lakhs, they don't pay tax to the government.
Even if one's income is nil (in which case it's referred to as a NIL return) or less than the taxable limit, one can still file it. Proof of the money you have accumulated in your bank accounts or other investments can be provided by filing a zero return. ITR is a form wherein you enter details regarding the income you have earned in the past financial year (1st April- 31st March). Most people consider the process of filing income tax returns to be hard.
Who Is The ITR Filler?
The Income Tax Department's specific needs age, and other considerations all play a role in determining whether or not an Indian taxpayer must file an Income Tax Return (ITR). The following is a general list of people and organizations who normally need to file an ITR:
- Individuals: Residents in the following three groups are required to file an ITR: In general, you must file an ITR if you are a resident individual (below 60) and your total income for the financial year exceeds the basic exemption ceiling, which is presently ₹5 lakh. (Tax slabs were changed from time to time )
- Senior Citizens: The base exemption threshold rises to ₹5 lakh(approx) if you are a resident who is 60 years of age or older but under 80. You must file an ITR if your income is more than this cap.
- Super Senior Citizens: The baseline exemption threshold is raised to ₹6 lakh if you are a resident who is 80 years of age or older. You must file an ITR if your income exceeds this limit.
- Companies: Regardless of revenue or profit/loss, all Indian Businesses must submit an ITR on an annual basis.
- Partnership firms and Limited Liability Partnerships (LLPs): Regardless of their revenue or profit/loss, partnership firms and LLPs must file an ITR.
Top Benefits Of Filing an ITR
- Identity Verification: Your completed return can be used as identification in several situations, including when applying for an Aadhar Card or any other kind of paperwork. It is also recognized by the government as proof of address.
- Proof of Income: As previously mentioned, the ITR form provides a comprehensive account of all of your income and expenses. This is used to calculate the tax you must file. ITR can also serve as proof of income because certain transactions, such as the acquisition of real estate, do require it.
5. File For National Development: ITR helps the nation develop by giving the government useful information about the revenue and tax liabilities of people and companies. The money raised from ITR filings is put toward a range of national development and public welfare programs.
a) By utilizing these exemptions and deductions for certain assets, you can lower the total amount of tax you pay in the end.
b) It is also possible to Claim Back TDS and Refunds.
c) But you must file an income tax return to be eligible for these tax benefits. You are also not eligible to claim deductions if you haven't filed your ITR.
8. Avoid Penalties And Punishment: The Income Tax Act of 1961 regulates the taxes that apply to you. Thus, if you meet the exemption limit, you must pay taxes. Therefore, you face penalties if you are liable to pay income taxes but neglect to file your income tax returns.
A penalty of up to Rs 5000 Rs may be assessed by the income tax officer. Failing to file returns may also result in other severe penalties. To avoid these fines and penalties, you need to file an ITR.
9. Visa Application Processing: It is necessary to provide proof of income if you are traveling abroad or have travel plans later. Employer certificates are valid if you are salaried; otherwise, you must provide information about your income if you work for yourself. Hence, the ITR return will serve as evidence of income earned.
Conclusion
It is not only necessary to file income tax returns (ITRs) for compliance; many benefits can improve your financial situation. The advantages of submitting an income tax return are indisputable, ranging from obtaining opportunities and showing financial credibility to collecting refunds and carrying forward losses. By paying your taxes and keeping up-to-date financial records, you not only support the growth of the country but also give yourself important evidence of your income, loan eligibility, and the confidence to handle a variety of financial activities. Thus, cultivate the practice of filing your ITR with diligence, getting expert advice when necessary, and reap the numerous advantages of conscientious tax compliance.
- Necessity of Filing ITR
- Top Benefits Of Filling Income Tax Return
- Benefits Of Filling An Income Tax Return
- Income Tax Return
- How ITR Helps Us.