ITR Filing: Check 6 important benefits of filing your Income Tax Return

Filing income tax returns is not only a legal obligation but also a civic responsibility. It shows your commitment to the development and well-being of your nation by contributing your fair share to its growth. ITR Filing: Check 6 important benefits of filing your Income Tax Return.

By fulfilling this duty, you actively participate in the functioning of the government and in providing essential services to the citizens. According to the Income Tax Department, filing income tax returns is your duty and earns you the dignity of consciously contributing to the development of the nation.

Apart from this, your income tax returns validate your creditworthiness before financial institutions and enable you to access many financial benefits like bank credits etc.

Know the key benefits of filing ITR:

Claiming Tax Refunds: If you have paid more taxes than required through TDS (Tax Deducted at Source) or advance tax payments, filing a return allows you to claim a refund. This is especially beneficial if you have investments or expenses that qualify for deductions or exemptions.

Creditworthiness Assessment: Filing income tax returns helps establish your financial reliability and creditworthiness. When you apply for loans or credit facilities, lenders review your tax returns to assess your repayment capacity and risk profile.

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Getting government benefits: Some government welfare schemes and subsidies require proof of income, which can be provided through income tax returns. By filing returns, you will be eligible for various social security benefits, subsidies and entitlements provided by the government.

Legal Compliance: Filing of income tax returns is mandatory for individuals whose income exceeds the threshold prescribed by the Income Tax Department. By complying with this requirement, you will avoid fines and legal consequences.

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Claiming Deductions and Exemptions: Allows you to claim deductions and exemptions available under the Income Tax Act, such as for investments in tax-saving instruments (eg, Provident Fund, ELSS), payment of insurance premiums, donations to charitable institutions, and for housing loans and educationAssociated costs.

Financial Planning: Filing income tax returns provides a comprehensive record of your financial transactions, income sources and tax liabilities. This information is valuable for financial planning, budgeting and decision making regarding investments, savings and expenses.