It is mandatory for one to file income tax returns in India, if he comes under any of the following conditions:

Individuals who fall within the respective tax slabs.
If it's a Company or Firm, irrespective of the profit or loss made in a financial year.
If a tax refund needs to be claimed.
If a loss under a head of income needs to be carried forward.
If being a resident of India, one has an asset or financial interest in any entity located outside India.
If being a resident of India, one is a signing authority in a foreign account.
If one receives income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not-for-profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
If one is applying for a loan or a visa.

Filing income tax returns is often seen as a cumbersome process by the majority of the people. That is the reason why many decide to skip filing returns.

As a responsible citizen, you need to make sure that you file your returns every year. This is a moral duty of every working Indian.

Income Tax Return holds immense legal value. It is recorded with the government. It acts as legal proof in two ways,

a. Identity Proof :-
The return that you fill can be used as identity proof in various scenarios such as while applying for an AADHAR card, or any other document. The government accepts it as a proof of address as well.

b. Income Proof
ITR form contains a detailed list of all your incomes and expenses. On this basis, the tax you have to file is calculated.

Thus, ITR can also be used as income proof as some transactions such as the purchase of property do require you to show proof of income.

To reduce the burden on the taxpayers and to encourage more people to pay their taxes, the government allows certain deductions to you.

a) These deductions and exemptions can be availed in some investments and thus help in reducing the tax you ultimately pay.
b) TDS and rebates can also be claimed back.
But to have access to these tax benefits, you are required to file an income tax return. If you have not filed ITR you cannot claim deductions as well.

In some cases, you have paid more taxes, as TDS was deducted from your income more than what you should pay. Or it could be your tax liability was NIL, but TDS was deducted for some reason. In such cases, you can claim a TDS refund. To do that, you need to file an IT return. This is one of the biggest benefits of filing income tax returns.

Somes embassies require you to furnish copies of your tax returns for the past 2 to 3 years at the time of the visa application process. These are mandatory documents. Hence it is better to file ITR on time.

If you plan to apply for a home loan in future it is a good idea to maintain a steady record of filing returns as the home loan company will most likely insist on it. In fact, you may even consider filing your spouse's returns if you want to apply for a loan as a co-borrower. Likewise, even credit card companies may insist on proof of return before issuing a card.

Financial institutions may insist on seeing your returns over the past few years before transacting with you. In fact, the government may make it mandatory for them to do so, thereby indirectly nudging individuals to file returns regularly even when it's voluntary.

If you file a return within the filing window, you can carry forward losses to subsequent years that can be used to set off against the income of subsequent years. It can deduct certain losses from the relevant income that help you reduce your tax liability of the future income. You cannot do it without filing your returns.

We are sure you won’t miss your ITR filing this year and the coming year - there are so many advantages to doing it.

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