Why Filing Tax Return Is the Best Thing You Can Do
Have you ever felt that filing your income tax return is a hassle?
Many a times we think that we have extremely low, or in fact almost zero tax liability, and thus it is alright if we just skip filing our income tax returns. Also, some of us are too busy or too lazy to file their returns for years, and only consider doing it when it becomes mandatory due to some changed or serious situations.
But, financial analytics says that it is very important for you to file your returns on time, irrespective of your tax liabilities.
Here are a few advantages of doing so…
It serves as a proof of your cumulative earnings over the past years
It might so happen that your per annum income is pretty low in terms of tax, but over a good number of years you have managed to accumulate a hefty sum. Do to this accumulated amount; you might end up under tax scrutiny.
If you have not maintained proper tax records over the years, it might become a complicated procedure to prove your source of earnings. On the other hand, your tax return records would be a strong legal proof in such scenarios.
It simplifies VISA processing
If you have plans to travel abroad, a legal proof of your earnings is a mandatory document required. If you are a salaried employee, you might sneak out as your employer’s certificate would also serve the purpose, but, if you are your own boss, then there’s no other alternative for you, and the ITR proofs are extremely crucial for you in terms of getting a permit to travel overseas.
It is the only proof of earnings for businessmen
In continuation with the above pointer, irrespective of whether you are travelling abroad or not, if you are a businessman, then the ITR is the only legal and acceptable proof of income that you can have. So no matter what the purpose is, if you don’t have your ITR files, by no means can you prove your incomes before any authority.
Your capital losses can be carried forward
This is an extremely beneficial thing for you. If you have suffered any capital losses at any point of time, the laws of income tax allow you carry your losses forward for upto 8 years consecutively, and balance it against your future profits and incomes.
But, guess what? Your losses for a specific year will not be allowed to be carried forward, until and unless you have filed your income tax returns for that year before its due date. Thus, even if it is a loss filing a return is very important.
You can easily get loans
If a need for any sort of bank loan comes in future, whether it’s a home loan or car loan – your ITR records for the previous two to three years would be asked for as mandatory documents. Thus, it is important for a smooth and hassle-free sanction of your required loan.