Income Tax Return: There are only a few months remaining to submit income tax returns, with the deadline set for July 31, 2025. Even if your income does not exceed the taxable threshold, filing your income tax return can offer numerous advantages.
Advantages of filing income tax return
Filing an income tax return is not merely a tax obligation; it serves as a crucial financial document. This document can be utilized for various purposes, including securing loans, making investments, or applying for visas.
Many individuals refrain from filing income tax returns simply because their current earnings do not surpass the taxable limit. However, this is a misstep, as any taxpayer, regardless of their income level, is eligible to file an Income Tax Return (ITR) and can reap significant benefits from doing so.
Tax Deducted at Source (TDS) is withheld from the earnings of many individuals. By filing an ITR, you can reclaim this TDS. TDS is typically deducted from sources such as interest, commissions, salaries, or fees. If you neglect to file your income tax return, the TDS amount will remain with the government. Thus, filing an ITR is essential.
Submitting your income tax return can mitigate financial losses. Individuals may experience financial setbacks in various ways, such as losses in the stock market, business downturns, or property depreciation. However, these losses can be offset by filing an ITR, which allows you to report this year’s losses and adjust them against next year’s profits. It is crucial to file your income tax return to take advantage of this benefit.
Often, proof of income is required when applying for a loan from a bank or financial institution. The ITR can serve as valid proof of income. Without this documentation, your loan application may be denied. Providing income proof enhances the lender’s confidence in the borrower and allows the bank to assess the applicant’s ability to repay the loan.
If you are considering an international trip in the future, it is advisable to file your ITR. Many countries, including the United States, those in Europe, Canada, and Australia, may require proof of income as part of the visa application process.