Due date of filing Income tax return for FY 2018-19 is 31st August.
As per section 139(1) of Income Tax Act,1961, every person being a company or a firm; or being a person other than a company or a firm, if his total income is above the the maximum amount which is not chargeable to income-tax, he will have to furnish a return of his income.
Even though filing of ITR is not mandatory for some individuals, there are certain benefits that one can avail of provided the ITR has been filed. There are many benefits of filing income tax returns before the due date
Here are few of those:
1. Claiming TDS Refund:
There could be a possibility that there has been tax deducted at source (TDS) on some investment made in the name of the individual.
For instance, As an individual if you have invested in fixed deposits, the interest income is chargeable to TDS at the rate of 10% irrespective to the fact that the individual is liable to pay income tax or not.
Hence, for getting the refund of TDS deducted you have to file income tax return even if the income is below the taxable limit.
2. Easy loans approvals:
While applying for loans, the eligibility and amount of loan to be provided would depend on one’s income which can be established through filed ITRs.
As the banks ask for a copy of income tax returns for at least three consecutive years to sanction a loan.
So if you are planning to take a loan in the future, it can help you if you can file your I-T returns.
3. Carry forward of losses
Income tax rules allow carry-forward losses to set them off only to those who file ITR in the relevant assessment year.
If anyone has suffered losses in a year, then by filing income tax return he can carry forward that loss for next eight subsequent years (or as the case may be as per provisions) to set off the same by the future income. This can help reduce the burden of tax in future years.
4. VISA processing
If you are traveling overseas, foreign consulates ask you to furnish ITR receipts of the last couple of years at the time of the visa interview.
Some embassies may ask for ITR receipts of previous three years, while some others may ask for the most recent certificate.
5. Income proof in compensation cases
Although, the Motor Vehicles Act does not make it compulsory to provide the ITR while arriving at compensation in case of accidental death or disability, the claims tribunal agreed procedures approved by Delhi High Court mention the need for ITR in case of self-employed persons.
6. Buying a high life cover
These days life insurance companies asks for ITR receipts if you opt to buy a term policy with sum insured of Rs 50 lakh or more.
Another mandatory is if you plan to start a business and need to fill a government tender, you will need to show your tax returns of the previous years. This also wants to show proof of your financial status and whether you can support the payment obligation or not.