There are several benefits of ITR filing for those who have tax liability, but you must be wondering why an individual should file Income Tax Return when their income is below the exempt limit? Here are the reasons why: –
Claiming Tax Refund
There are chances that, the TDS has been deducted on some investment made under the name of the individual, then the taxpayer is required to file Income Tax Return, in order to avail the tax refund.
Beneficial while applying for Loans
If you are planning to apply for loan, then the eligibility and the quantum of loan will depend on your income, which can be traced by your Income Tax Return. Income Tax Return provides the authorities a clear picture of the total income earned and total taxes paid against the income for the relevant Financial Year.
You can carry-forward losses
As per the Income Tax Rules, only those who have e-filed the Income Tax Return for the relevant assessment year are eligible to carry forward losses to set them off against capital gains. There are possibilities that you may have incurred losses for a year. In such a situation, you cannot shy-away from e-filing Income Tax Return, if you have an income below the exemption limit.
Moreover, it is always recommended for the citizens to file their Income Tax Return for the relevant Financial Year even when the individual has income below the exemption limit, as it the only proof of your Income in India.