Filing of Income Tax Return (ITR) is mandatory for those people whose gross income is more than the limit fixed by the Income Tax Department. For those whose income is less than the prescribed limit, it is not necessary to file ITR. At present, ITR is required to be filed for those whose gross total income is Rs 2.5 lakh per annum. According to experts, filing ITR even on income less than Rs 2.5 lakh does not cause any loss but has many advantages.
If your income is not taxable and you file ITR, then it will become your proof of income. This makes it easy to take a loan from the bank. Many banks also ask for proof of return for two years for vehicle or home loans. In such a situation, filing returns is beneficial.
Refund will be done if more TDS is deducted
Sometimes tax at the source is deducted even if your income is not taxable. For example, if your total income is less than 2.5 lakhs but the income of Rs 1 lakh is being made on FD in the bank, then 10% tax should be deducted by the bank on this. In such a situation, your tax deducted by filing ITR gets refunded.
Help available in visa application
Proof of ITR in the application for visa reduces the chances of the application being rejected. It gives proof that one is a responsible citizen. Apart from this, many countries also demand ITR for visa.
In such a situation also, it is necessary to file ITR.
Even if your income is less than 2.5 lakhs, it is necessary to file ITR in some special situations. It is necessary to file ITR for having any assets outside the country, having deposits of more than Rs 1 crore in the current account, paying electricity bills of more than Rs 1 lakh in a year, and spending more than Rs 2 lakh on foreign travel.