Does Everyone Have to File Their Income Tax Returns?

Every person who has a source of income through employment or business may have this question if he or she is eligible to file income tax returns or not. Before we discuss who is eligible to file income tax returns and who is excluded, let us see what filing income tax returns mean and why it is so important.

Filing of income tax returns (ITR) means making a statement of your income across various sources, tax liabilities, the paid taxes, and refunds (if any)that the government allows. Filing the income tax returns act as proof that your income is disclosed and legal. This will eventually help you get refunds, get loan applications and tenders approved, and funds for startups and more.

Who are all required to file income tax returns?

What are the benefits of filing income tax returns?

  1. Ease in claiming refund – Many individuals receive income where the tax is deducted at the source as TDS, and in that case, it is mandatory to file an income tax return.
  2. Process documents – The approval of any loan largely depends on the applicant’s income. Hence, almost all lenders ask for income tax return file proof documents to know whether the applicant is eligible to apply for a loan or not.
  3. Carry-forward losses – As per income tax laws, carry forward of losses to set off against capital gains is allowed only if the person has filed income tax returns.
  4. Act as an income proof in compensating cases – To arrive at the compensation of a loss, the person needs to establish his income proof in which the income tax return comes handy.

Makes you a law-abiding citizen – Other than these benefits, keeping the income tax department informed about your income and taxes makes you a law-abiding citizen.

Exit mobile version