Ask any commoner in India about Income Tax Return (ITR) and they will try to avoid any discussion, thinking it is something that only rich people do. But is it really that?
Before getting to that, we must know what an income tax return is. It is basically a form used to file the information regarding your income and tax to the Income Tax Department.
ITR is a basic exercise which everyone who gets paid a salary should file. You don't necessarily need to have a taxable amount of salary to file ITR. Even if you fall under the non-taxable category, filing income tax returns can be beneficial.
The first and foremost benefit of ITR is that you can use it as income proof to get a loan. Having filed an income tax return, you can fasten the process while applying for auto, personal, housing or other loans.
Bank officials usually ask for proof of income for the last three years when an applicant applies for the loan. So, if you miss the deadline to file ITR, it might become tough to make it through.
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Filing ITR can also help one carry forward the losses suffered in capital assets, business or any other profession by setting off them with the profit earned in the subsequent years.
The other important thing is if you own assets or investments outside India, you must file income tax return even if your salary falls under a non-taxable category.
You will also need to file the ITR if you want to claim back the amount deducted from your incomes through fixed deposit, recurring deposits, etc.
So, if you have not filed the income tax returns yet, you should. The last date to file the ITR for the period– April 01, 2020 to March 31, 2021– is December 31, 2021.