Benefits of filing ITR even when income is below exemption limit

Introduction:

In India, filing Income Tax Returns (ITR) is a mandatory process for individuals and organizations with taxable income above a certain limit. However, many people tend to ignore the importance of ITR even when their income falls below the tax exemption limit. In this article, we will discuss the various benefits of filing ITR, even when income is below the exemption limit.

1. Improving Credit Score:

Filing ITR regularly is an important factor that contributes to your credit score. A good credit score opens doors for easy approval of loans and other financial products. Filing ITR even when the income is below the exemption limit establishes a good credit history, which can be useful in the future when you apply for a loan.

2. Proof of Income:

Filing ITR serves as a proof of your income and can be used as a document in various financial transactions. Whether you are applying for a loan, buying a house, or investing in insurance, ITR can serve as a reliable proof of income.

3. Availing Tax Benefits:

ITR can help you avail tax benefits and deductions under different sections of the Income Tax Act. Even if your income is below the exemption limit, you can still claim deductions for expenses such as medical expenses, education expenses, and so on.

4. Future Tax Planning:

Filing ITR regularly helps you keep track of your income and expenses, which can be useful for future tax planning. This will help you make informed decisions on investments and other financial transactions.

5. Ease of Refund:

In case of a tax refund, filing ITR is mandatory to claim the refund. If you have filed ITR, you will be able to claim any refund due to you without any hassle.

Key Points

• Filing ITR regularly establishes a good credit history, which can be useful in the future when you apply for a loan.
• ITR serves as a proof of income and can be used as a document in various financial transactions.
• Filing ITR can help you avail tax benefits and deductions under different sections of the Income Tax Act.
• Filing ITR regularly helps you keep track of your income and expenses, which can be useful for future tax planning.
• In case of a tax refund, filing ITR is mandatory to claim the refund.

Moreover, filing ITR is a simple and straightforward process, especially with the advent of online tax filing platforms. The process has been made much more convenient, and you can easily file your ITR online within a few minutes. With online platforms, you can access your ITR from anywhere and anytime, making it easier for you to keep track of your financial history.

In addition, filing ITR can also help you avoid any potential legal issues in the future. If you have not filed ITR, you could face legal consequences, such as fines and penalties, in case of any discrepancies in your income and expenses. By filing ITR, you can be assured that your financial records are accurate and up-to-date, avoiding any legal issues.

In conclusion, filing ITR, even when your income is below the exemption limit, has numerous benefits. It helps you maintain a good credit score, serves as a proof of income, helps you avail tax benefits and deductions, and makes tax refunds easier to claim. It also helps you plan your finances better and avoid any legal issues. So, make sure to file your ITR on time and take advantage of the numerous benefits that come with it.

Conclusion:

In conclusion, filing ITR is not just about paying taxes but also about maintaining a good financial history. Even if your income is below the tax exemption limit, it is advisable to file ITR to avail the benefits mentioned above. Filing ITR regularly can help you stay on top of your finances and plan your future accordingly. So, make sure to file ITR on time and reap the benefits of a good financial history.