An income tax return is a form on which taxpayers declare their income, tax payable on their income, exemptions. And deductions for a certain fiscal year. Taxpayers must file ITR for a variety of reasons, the most important of which is to claim tax deductions.
A detailed tutorial on income tax returns and their importance is presented to explain the benefits of submitting ITR and to clear other misconceptions that a taxpayer may have. We’ll go over all you need to know about ITR benefits. Who needs to file one, and what happens if you don’t.
Is it required to file an ITR?
Not everyone is required to file an ITR. Based on a number of factors, taxpayers can determine whether or not they need to file an ITR. These elements are listed below:
- Income in excess of the exemption limit- The exemption ceiling for a regular taxpayer is 2.5 lakhs, 3 lakhs for seniors, and 5 lakhs for super seniors. Incomes in excess of this amount are deemed taxable.
- International travel expenses- If you spend more than $25,000 on overseas travel during the fiscal year, you should file an income tax return.
When is the ITR filing deadline?
To take advantage of the ITR benefits, it is best to file tax returns before the deadline. In most situations, the deadline for income tax returns filing is July 31st for non-audit cases and individuals. And September 31st for audit cases in a given fiscal year.
The advantages of submitting an ITR
The advantages of filing income tax returns differ depending on the taxpayer. In the following section, we have detailed the benefits of filing an ITR based on the type of taxpayer.
- Loans are processed quickly and efficiently – During a loan application, financial institutions may request. ITR receipts from the preceding year or years. As a result, if someone wants to get a mortgage or a car loan, they must file an ITR. S
- Getting a refund – By filing an ITR, anyone can request a tax refund from the Internal Revenue Service. This is especially useful to high-income salaried and self-employed individuals.
- Processing of visas is simple – Because this document serves as verification of an applicant’s income. The embassy will review the information to ensure that he or she is financially capable of covering trip expenses. Salaried employees and self-employed individuals can take advantage of this by completing an ITR.
- Health-care coverage – Health insurance premiums paid in a given fiscal year are eligible for a deduction of up to $50,000 from the IT Department. This is in accordance with Section 80D of the Internal Revenue Code. Senior citizens who have medical insurance can take advantage of this discount and receive treatment without delay.
- Compensation for losses – Any organization or business can lose money at any point during the fiscal year. Companies must file IT returns to compensate for the loss. This approach allows you to carry forward your tax losses into the next year. Assesses, on the other hand, must file an ITR before the due date in order to claim losses in the future.
- Deduction for interest – Filing an ITR also permits you to deduct interest when applying for a house loan. If an NRI owns a rented-out or vacant property in India. It becomes taxable, and the NRI must file tax returns for it. The advantage of filing an ITR in this situation is that the individual can deduct a typical 30% of home loan interest and property taxes.