What is ITR and Why is it Important?

What is ITR and Why is it Important?

“Taxes are what we pay for civilised society”

Income Tax Return (ITR) is actually a form that an individual needs to provide to the income tax department of India. This ITR consists of details of an individual’s revenue along with the taxes that needed to be paid amidst the year. Do you know that income tax plays a significant role in the development of a nation? We can say that it is a vital source of revenue to the government. These tax amounts were utilised to pay wages, for welfare schemes, defence, government projects and so on. All organisations need to pay the taxable amount to the government and the taxpayers should compulsorily file income tax returns with the exact tax amount. 

As per the Income Tax Act of 1961, when an individual is below the age of 69 years, then he should file the tax returns should file the tax returns when a chunk of their revenue is chargeable. Also when your taxable income surpasses Rs 5 lakh in the fiscal year or while you make it. Advance tax payment, so in this scenario you must file an Income Tax Return ( ITR). In case you have any prior due taxes that need to be paid while filing the tax returns.

Strong Motives to File an Income Tax Return

• ITR Simplifies Loan Processing – While applying for a loan it’s mandatory to submit the income proof by doing so only the lender would sanction the loan. Here you need to submit your ITR for the last 2 fiscal years.

• ITR Aids in Claiming Any Losses that are Carried Over- When you endured any losses below the heads such as capital gains or profits in your business or in your job, while you wish to carry forward those losses to the upcoming fiscal year, then you need to file the ITR. 

• ITR Assists to Claim TDS Refunds- When the actual tax payable amount is lesser than the TDS amount in that instance you need to file Income Tax Return (ITR) to claim the TDS refund. If you’re filling ITR in online, give the needed details such as bank account, IFSC code. The IT Department needs this essential information to provide the TDS refund. The TDS could adjust the total tax accountability during filing the ITR. When the TDS amount deducted is larger than the tax obligation, the taxpayer could claim the tax refund amount.

Also when the TDS amount which is deducted is less than the tax accountability, then the taxpayer should pay the balance tax amount. Also it’s possible to track the refund through checking the status column of the income tax return.

• ITR Devote for Building up the Nation- The tax amount paid is helping the nation to build up. Certainly the tax amount plays a vital role for the growth of cash flow to the government. For FV19, the Government collected over Rs 9.45 lakh crore tax amount. This tax amount is used by the government to build the groundwork or for certain other revolutionary activities in a nation.

• ITR Aids You with Credit Card & Visa Applications- When you arrange to visit America, you should submit the filed ITRs for the past 3 years. This goes as a part of the procedure in the application. These type of documents may create the procedure of visa application too trouble-free and also boosts the chances of approval. Also non-filing or filing ITR lately may endup in penalty and increase the interest rate too. 

Factors to Remember When Filing an ITR 

• Make sure to keep entire documents ready
• Choose the most relevant ITR form
• Provide in the form with the right personal information ( name, bank account)
• Try to file the ITR prior to the due date.
• Validate your income tax return. 

Why is ITR Filing Important? 

• It increases your creditworthiness
• Obtain loan approval more quickly 
• Avoid legal penalties
• You may maintain a pristine tax record
• It helps to reduce future tax liabilities.

Thus Income Tax Return shows how you have contributed to the public services and infrastructure. Whether you’re a person running a venture or a professional when you start to understand the noteworthiness of ITR, this will ensure tax compliance and also assist in the progression of a nation.

“Taxation is More Than Revenue. It is a Tool for Development”

FAQs

1. Whether it’s feasible to file ITR upon the due date?

Yes it’s possible to file the ITR upon the due date. But it’s belated tax filing and in such conditions one should pay penalty amounts around Rs 1000-10000.

2. What is the requirement to file income tax returns?

Income Tax remains the vital revenue for the government that is used to the development of a nation. These tax amounts are used to pay wages for the funding of government projects, defence and so on thus filing income tax returns seems crucial for the nation’s growth.

3. Whether it’s essential to file ITR?

Yes it’s essential to file ITR when your income comes under taxable income slab as mentioned by the Income Tax Act.

4. What would be the income limitation for ITR?

For a person under 60 years of age, the basic limit is Rs 2.5 lakh and for senior citizens aged 60-70 years. The primary income exemption limit would be Rs 3 lakh while for super senior citizens 80 and above, the fundamental income exemption limit is Rs 5 lakh.

5. Who is responsible for Income Tax Return?

All Indian citizens are responsible for Income tax return.