10 benefits of filing income tax return

As per the provisions of Income Tax Act, 1961, filing of income tax is compulsory under certain circumstances. Also, filing of ITR is required for ordinary residents holding overseas assets.

Even if any person's income is not taxable, still that person can avail following benefits after filing income tax returns.

1) Residence Proof: A tax assessment order can be used as a proof of residence for applying for Aadhaar or passport.

2) Hassle free loan processing: Generally, income tax returns of last three years are required if a person intends to take any housing loan, education or vehicle loan from the bank.

3) Processing credit card applications: Copies of tax returns are also required as proof for processing credit card applications.

4) Recording of high-value transactions: High-value transactions such as purchase of property, buying a car, investing in mutual funds, etc., are reported to the income tax department. So, by filing income tax returns, one can report these transactions & substantiate the same as per one's income.

5) Refund of TDS: If TDS is deducted from one's income, then the filing of income tax return is required to claim TDS.

6) Carry forward of losses: If a person has incurred a loss from sale of capital assets, house property income, loss from business/ profession, then carry forward of the same to subsequent 8 years, for set off against other income can be done if that person has filed income tax return within the prescribed due dates.

7) Visa processing: Filing of income tax return is a mandatory requirement for the processing of visa.

8) Claiming additional deductions: If a salaried person has filed income tax return, then he can claim additional deductions which are not considered by his employer while deducting TDS.

9) Avoiding additional interest rates: If a person has not filed income tax return, then a belated return could incur additional interest at 1% per month for the balance tax payable.

10) Avoid penalties: From FY 2017-18 Rs 10,000 would be charged for non-filing of income tax return. Also in addition to taxes and interest, there could be prescribed penalties ranging from 50 to 200% in certain cases.