Benefits of filing ITR (Income Tax Return) even if you are below taxable limit

ITR Receipt is an important document
Having an ITR receipt is important because it is more detailed than Form 16, entailing your income and taxation along with revenue from other sources.

Use as address proof
ITR receipt is sent to your registered address, which can serve as residential proof.

Helps the bank loan documentation process easier
Being a diligent income tax filer makes it easier for banks to assess your source of income when you apply for loans like an auto loan, home loan, personal loan, etc.
“Banks usually ask for copies of tax returns filed for previous 2-3 years at the time of applying for the loan to ascertain the income capacity of the individual. Hence, to apply for loans a tax return would be required to be filed”.

Avoid penalties or scrutiny from the tax department
From FY 2017-18, up to INR 10,000 would be levied for non-filing of ITR. This black mark will remain for years to come.

For a hassle-free visa application procedure
At times visa authorities ask for copies of past tax returns, hence to apply for a visa a tax return would be required to be filed. Embassies, especially those of US, UK, Canada, etc. when processing your foreign visa application, are particular about your tax-compliance.

To buy an insurance policy with a higher cover
If insurance companies have reasons (non-compliance) to believe that you are a tax-evader, they will not give you policies with more cover.

Refund
When employed, your employer will deduct TDS on your income. However, if you have made investments that are tax deductibles, it reduces your taxable income. So, the TDS deducted can be refunded, but only if you file your return. The same holds true for TDS deducted by any other sources.

Makes life easier for freelancers and independent professionals
Freelancer or self-employed people don’t have Form 16. This is the only document they have to show that he has filed the ITR. Without this, they can face funding issues and transactional problems.

Government tender
Experts say that if one plans to start their business and need to fill a government tender or two for the same, they will need to show their tax return receipts of the previous five years. This again is to show your financial status and whether you can support the payment obligation or not.
However, this is no strict rule. It may vary depending on the internal rules of the government department. Even the number of ITRs required can vary.

Credit Card Processing
Banks can reject your credit card application if you haven’t filed your ITR.

Compensate losses in the next financial year
Unless you file the ITR, you cannot recompense your expenses/losses in the previous financial year to the current. As per the income-tax provisions, if tax returns are not filed on time, unadjusted losses (with some exceptions) cannot be carried forward to future years. Hence, to ensure that the losses are carried forward for future adjustment, a tax return would be required to be filed.

Helps to avoid extra interest
If you don’t file ITR, the belated return could lead to extra interest at 1% per month for the remaining tax payable by you. For example, banks would deduct tax from interest on fixed deposits exceeding a certain threshold. To claim a refund of tax deducted by the bank (if any) on the interest income, a tax return would be required to be filed regardless of the taxable income.

This helpful article curated from the web.