5 Reasons to File Your Income Tax Returns

Many people appear to believe that submitting tax returns is optional, and hence reject it as unneeded and burdensome. As we will see, this is not a very healthy tax-filing mindset. Filing tax returns is a yearly action that every responsible citizen of the country is expected to do. It serves as a foundation for the government to determine the quantity and means of expenditure of citizens. As well as a platform for assesses to request refunds and other types of relief as needed.

Also Read: Income Tax Return Filing

1. Filing returns demonstrates that you are accountable.

Individuals who make a certain amount of annual income are required by the government to file a tax return by a certain date. Individuals are responsible for paying the computed tax. The Income Tax Department will impose fines if you do not pay your taxes.

Those with incomes below the stipulated threshold can file returns voluntarily.

Filing returns demonstrates that you are accountable. Not only that, but it also makes it easier for people and enterprises to engage in subsequent transactions because their earnings are recorded by the tax department, with any applicable tax paid.

2. In some circumstances, filing returns is required.

Even if your income does not qualify you for mandatory filing. It is still a good practise to file returns voluntarily. In most states, registering immovable property requires submitting three years’ worth of tax returns as verification.

3. Your loan or credit card provider may request a copy of your tax return.

If you want to apply for a home loan in the future, keep a consistent record of filing returns because the home loan firm will almost certainly require it. In fact, if you wish to qualify for a loan as a co-borrower, you might consider filing your spouse’s returns. Credit card providers, too, may require proof of return before providing a card.

Financial organizations may request your returns for the past several years before transacting with you. In fact, the government may make it essential for them to do so, encouraging people to submit returns on a regular basis even if it is optional.

4. If you want to seek compensation for past losses, you must file a return.

Whether or not you earn the required level of income to submit returns, there are numerous benefits to filing returns on time.

Numerous losses sustained by an individual or a corporation. Both speculative and non-speculative, short and long term capital losses. As a result, it’s best to submit returns on a frequent basis because you never know when you might need to make a claim for prior losses.

5. In the event of updated returns, filing returns may be beneficial.

If the assessee hasn’t filed the original return, he won’t be able to file an amended return later, even if he desperately needs to. The Income Tax Act imposes a Rs 5,000 penalty for failure to file returns. While filing returns is a purely voluntary activity. People who do not do so may face legal consequences in the future.