5 Advantages of Filing an ITR

5 Advantages of Filing an ITR

  • Obtaining a refund of taxes

Tax withholding applies to some types of passive income, such as interest from term deposits and dividends. Many individuals may be exempt if their income is below the threshold. "The vast majority of individual taxpayers with merely the aforementioned income would be required to file tax returns in order to receive a tax refund." Even for salaried taxpayers who have had additional taxes withheld, filing returns is essential to receive a refund.

  • Documents are processed

The income tax return is a necessary document for many applications to be processed. When completing an application for a home or auto loan, bankers, for example, require copies of tax returns filed to verify an individual's sources of income. It is easier to process tax returns if they are filed on time, rather than having to explain why returns for specific years were not filed. Aside from assisting in the processing of credit cards, insurance policies, and other financial transactions, the income tax return also assists in the processing of credit cards, insurance policies, and other financial transactions.

  • VISA application form

When people seek to work or travel outside of India, the immigration officials ask for copies of previous tax returns. The submission of tax returns helps that VISA applications are processed quickly because immigration officials consider the individual to be tax-compliant.

  • Making a loss claim

To claim specified losses for an individual taxpayer, such as losses from capital gains, business, or profession, etc., filing a tax return by the due date is required. Filing tax returns benefits the individual not only in terms of claiming losses carried over in future years, but it also serves as a record of losses that can be claimed in the future.

  • Serves as Proof of Income

Self-employed taxpayers, unlike salaried taxpayers, do not receive a Form 16 salary certificate as proof of income. As a result, for these self-employed taxpayers, the income tax return serves as proof of income, offering a detailed analysis of their earnings and expenses for any given fiscal year. Self-employed taxpayers can also utilize these records to prove their income in a variety of situations.


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