Even if your annual income is less than 12.75 lakhs and you do not have to pay any tax, it is still wise to file an income tax return. This can be beneficial for you in many ways in the future.
Under the new tax regime, there is no need to pay any tax on income up to 12.75 lakhs. If your income is also less than this, then there is no tax liability. But if you are not filing ITR thinking this, then you are causing harm to yourself. Financial advisors believe that whether you come under the tax net or not, you must file an ITR. Not filing ITR can be a big mistake, because it has many such benefits which will be very useful for you in the future.
Benefits of filing ITR
Solid Income Proof
ITR is the strongest and government recognized proof of your income. When you apply for a loan (home loan, car loan, personal loan), the bank first asks you for ITR. Without this, it may be difficult to get a loan.
Easy TDS Refund
Many times it happens that TDS (Tax Deducted at Source) is deducted on your salary, interest received on bank fixed deposit (FD) or any other income. If your total income does not fall under the tax purview, then you will get this deducted TDS back only when you file ITR.
Essential for Visa
Embassies of many countries ask for ITR of the last 2-3 years along with the visa application. It tells about your financial condition. Visa can also be rejected if ITR is not available.
Helpful for Credit Card/Insurance
ITR also helps you in getting a credit card with a good credit limit or buying a big insurance policy. It acts as your income proof. Companies provide all facilities only after seeing your income.
Avoid Unnecessary Notices
Filing ITR regularly makes you a responsible citizen in the eyes of the Income Tax Department. This reduces the chances of any kind of investigation or notice in the future.
Basis for High-Value Transactions
If you buy a big property or make a big investment, then the Income Tax Department may ask you about the source of income. In such a situation, the ITR filed helps to justify your transaction.
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